December 4, 2019
A Look Ahead – 2020 Legal Trends for Law Firms to Watch
The legal services market in the U.S. continues to boom, and is expected to reach $68 billion in 2020. Technology, global expansion, and new legal models are some of the biggest forces driving this growth, and next year will be pivotal in determining who is ready to adapt and prosper, and who will stagnate and suffer the consequences. Let’s take a look at four of the top trends.
Legal Trend #1: Tech Becomes Mission-Critical
As technology continues to be a major disruptor of the legal industry [Read Document Review: 4 Trends Causing a Seismic Shift], skills related to the application of legal tech will only increase in demand. Leaders and executives in every industry are quickly realizing the necessity of digital transformation: Research from McKinsey shows that data-driven organizations are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to be profitable than those that don’t prioritize digital information.
As a result, seventy-two percent of law firms predict that their use of cloud-based tech solutions will increase in 2020. Automating low-value tasks, such as creating templates, backing up documents, and onboarding clients, allows legal pros to focus on high-value, billable tasks that ultimately increase productivity for teams and lower costs for clients. Digital transformation isn’t something that has an end date, but rather an ongoing journey to increase efficiencies and improve client experiences. That requires employees who are willing and able to not only learn how to use those tools but optimize them.
Legal Trend #2: Preparing for Generational Change
Baby Boomers (the generation born between 1946 and 1964) are retiring at a rate of around 10,000 a day. By 2030, the entire Baby Boomer population will be over age 65, which means that the next decade will see an increase in Boomers’ demand for elder law services, such as retirement planning and estate planning. Currently, forty-one percent of Baby Boomers have no will and forty-five percent have nothing saved for retirement.
Perhaps more importantly, Baby Boomers make up forty percent of law firm partners and handle twenty-five percent of all firm matters. While it makes sense to let employees who have a positive impact on the organization continue to work, there are some downsides to not planning for a “changing of the guard.” For example, failure to smoothly transfer books of business or a lack of grooming younger attorneys to take up the mantle as part of succession planning can come back to hurt firms in the long run.
Twenty percent of Boomers are willing to work past age 65. Many of these older professionals prefer to “semi-retire”, working part-time, remotely or on a temporary basis to maintain their skills as well as their social interactions. By the same token, a temporary, tech-savvy hire can help train veteran employees on the latest software and tech tools to ease onboarding and provide a smooth transition during key periods of their digital transformation. Firms that need to train new recruits or want to take advantage of the experience older professionals offer might consider working with a staffing company that can leverage their connections to help find veteran legal professionals who want to continue working on a temporary or part-time basis.
Legal Trend #3: The Global Legal Market Soars
In 2021, the global legal services market is projected to exceed one trillion U.S dollars, up from 849 billion U.S. dollars in 2017. We live in a highly connected, interdependent world where business dealings and disputes often cross national borders, with the U.S. having a high level of involvement. In terms of legal services, “global expansion” is a concept most often tied to large law firms opening offices and placing staff in strategic locations across the globe. Now, technology is making it possible for small and mid-sized firms to provide cross-border services to clients.
Legal tech is allowing professionals to interact with clients on the other side of the world, as well as connect with other legal pros. Whereas a single law firm has traditionally handled all aspects of a matter or project, now they routinely collaborate with other legal service providers that have expertise in areas that the firm does not. Legal professionals who are adaptable, multilingual, skilled in project management software, or are familiar with law in other jurisdictions are especially useful in providing cross-border services. Firms seeking U.S.-based legal support to help with expansion overseas may benefit from partnering with a staffing firm that can seek out remote workers who would be the best fit.
Legal Trend #4: Widespread Use of ALSPs
One trend from this year that will only grow bigger in 2020 is the use of alternative legal service providers (ALSPs) in helping clients and law firms outsource legal work that would otherwise be costly in time, money and resources. While 33% of businesses are already outsourcing a wide range of processes to ALSPs, an additional 41% are considering doing so in the near future. The driving force behind this movement is clients’ increasing inclination to spend less, demand more, and expect greater value. Last year, corporate spending on law firms fell twenty-four percent.
By collaborating with ALSPs, corporate legal departments and law firms receive access to specialized expertise, legal support flexibility, and an extended network of connections. This is especially helpful for smaller legal operations, with sixty percent of those with a headcount of less than 1,000 currently considering ALSPs and legal process outsourcers. While the need to meet increasing client demand seems to be in direct conflict with anticipated cost reductions, temporary, temp-to-hire, or project-based legal staffing provides a streamlined solution that stands to benefit all parties involved.
With some strategic planning and the right staffing partnership, you can successfully navigate the shifting legal landscape of 2020. Whether you’re a law firm in need of some assistance or a legal professional looking for a new opportunity, JurisTemps can help. Click here for information about our team of expert legal professionals or here to learn more about our recruiting process.