Solicitors will need to act quickly to take advantage of opportunities and keep up with competitors
Changing client behaviours, innovative technology, political decisions, and greater competition is likely to impact the profitability of the solicitor profession in the near future, according to a new report.
The Law Society's report 'The Future of Legal Services' has identified the key opportunities, threats, and drivers for change in the market over the next three to five years.
The report comes following news of a study into the legal services market by the Competition and Markets Authority, as well as government plans to open up the market to more alternative business structures (ABS) and separation of legal regulators from professional bodies.
Changes to the market will bring both challenges and opportunities for those selling legal services, and solicitors will need to act quickly to keep up with competitors, the report found.
Catherine Dixon, the Law Society's chief executive, said: 'As the government consults on the future of regulation and the market, we will call for a fair regulatory playing field for all legal services, and for the solicitor profession to set and work to professional standards which it sets for itself. This will set them apart from non-lawyer providers.'
By 2020 the Law Society expects a declining number of traditional law firm models and more solicitors working in-house and in B2B markets, which are 'ripe for a new entrant'.
Chancery Lane also expects fewer solicitors working in B2C markets due to consumers' inability to afford advice, gain access to legal aid, or feel confident in choosing a solicitor over other options.
More women solicitors making partner is anticipated as is greater diversity of roles and titles, beyond the purely legal taxonomy.
The Law Society also suggested that more practitioners may relinquish the solicitor title and become non-lawyer providers.
The report found that while top UK and US firms have benefited from globalisation, large firms from emerging markets are creating a meaningful presence in their own countries and western markets. The report predicts the potential for a 'backlash against US/UK dominance'.
Client buying behaviour was recognised as changing due to certain types of legal work becoming more procedural and undertaken by technology.
In-house legal departments are wielding greater bargaining power and the unbundling of legal services was underlined as a continuing driver for change as corporate clients purchase services from different providers with a focus on fixed fees and greater pricing transparency.
The push towards automation of routine work is expected to be 'levelling off by 2020', while artificial intelligence, 'big data', and communication are seen as areas where revolutionary change is taking place, said the report.
The use of technology, such as online dispute resolution services and proposals for an online civil court, has the potential to widen access to justice. However, the report emphasised that not all clients can access technology and will still require expert legal advice.
An increased use of tech, for example in conveyancing, could also see firms employing fewer solicitors and more paralegals. Twenty-four per cent of firms surveyed were currently losing work to client technology solutions and another 42 per cent saw this as a potential threat to their business.
With clients uncertain over the different types of lawyer, the report recommended solicitors differentiate themselves from other providers on the basis of quality, specialisation, and value.
The uncertain nature of the UK's relationship with the EU was also highlighted with fears that London's position as a financial centre could be at threat, with knock-on effects on the legal industry.
The report warned of the uncertain outcomes of Transatlantic Trade and Investment Partnership (TTIP) agreements if the UK leaves the EU, and resulting impacts on the legal profession.