What’s Driving the Legal Market in 2022?
We now have a month of 2022 under our belts. In this new year, there are unique opportunities for law firms that are willing to adapt and take on the future. Ongoing issues related to the pandemic, combined with quickly growing legal tech options, present silver linings during a challenging time that have the potential to significantly benefit enterprising law firms well into 2022.
So, with this in mind, what trends are driving the legal market in 2022? Trends driving the legal market include a continued focus on client needs during a trying time, a need for deeper, more meaningful remote and real-world collaboration, more automation, better cybersecurity, and continued adoption of legal tech. Aligning these trends with law firm practices and strategies will be the key to a successful, profitable 2022.
The Five Factors Driving the Legal Market in 2022
There are many influences that drive the legal market up or down: from the global economy to local politics, from local consumer activity to global dynamics influenced by major ongoing events, such as the pandemic. The biggest factors driving the legal industry in 2022 are trends that initially began in 2021, largely due to the ongoing effects of the pandemic. The difference in 2022 is that we have the experience of the previous year to build upon. How effectively law firms and legal departments utilize this knowledge will directly influence their strategic growth plans moving forward. In 2021, these developments were something akin to a natural consequence of circumstances, but in 2022, they can now be dealt with proactively.
Below are the five factors that could drive your law firm or legal department in 2022.
1. Clients: law firms and legal departments will have to continue to focus on client relationships.
Clients have always had clout––they are a law firm’s bread and butter. What clients say has always mattered. But law firms have typically had a high degree of control over how the client-law firm relationship developed and transpired. Now, what clients say matters even more – a trend that began with tools like e-billing and that has accelerated in an increasingly competitive environment. And law firms are listening.
Clients want innovation. They want collaborative solutions. They want their outside counsel working as a seamless extension of their own team. They want pragmatic, real-world actionable advice. And they know how to ask for it.
It’s important for law firms and legal departments to hear and understand what their clients need and expect. Reuters suggests that “market optimism in legal spending is currently at its strongest point in the last decade.” It predicts that “four in 10 corporate clients are anticipating an increase in legal spending in ; only half as many (20%) are expecting a decrease.” Reuters states this is the “highest proportion predicting an increase and lowest expecting a decrease in the last 10 years.”
That’s significant. That’s an opportunity for law firm and legal department growth. But again, it’ll be about how well you listen to your clients and align what they need with what you offer. To that end, you’ll need to look towards other specific trends in the legal market to ensure you get where you need to be with your clients.
2. Collaboration: a collaborative culture will create better spaces for successful legal departments and law firms.
We know clients want to be heard, and that’s in part what’s driving the legal market in 2022. Part of this “being heard” dynamic is the want for more effective collaboration.
During the start of the pandemic, clients and law offices closed their doors to brick and mortar offices and embraced virtual offices. To fill in gaps and minimize communication problems, collaborative processes were employed––this included both legal professionals and their clients. Collaboration enabled better communication. Clients felt involved. The collaborative processes resulted in the making of collaborative solutions.
Now, even though law firms and legal departments are opening back up, clients want and will continue to demand the type of collaborative services they experienced over 2021. These collaborative processes offer a means to identify and develop strategies specific to the client’s needs and objectives.
3. Automation: More of the right type of automation will free up lawyers and drive better outcomes.
Automation in the legal industry has dramatically improved with the advancements of legal tech. Many routine tasks that lawyers conduct on a regular basis can now be automated. When executed properly, automation means attorneys, in-house counsel, and most other legal professionals no longer have to spend valuable time on low-value processes. What that also means is this: legal professionals can now allocate additional time to more important, billable tasks. In turn, that means more value for the money clients pay.
Automation, however, means different things to different law firms or legal department settings. For some law firms, automation may involve document review processes while for others it may involve client intake or collection services. Legal departments may need automation for client communications as well as document templates or knowledge management. Whatever your automation needs are, they should be aligned with client strategies and workflow goals, and the latter should be assessed to identify what automation technology is best for your law business.
Unfortunately, as ABA Journal points out, many law firms are not taking automation seriously and are not, therefore, transitioning to it fast enough. This is the year to change that.
4. Cybersecurity: increased cybersecurity will not be optional.
Clients demand cybersecurity; it is a natural response given the value of the data they entrust to their firms. The same is true for law firms: cybersecurity is a critical component of any new strategy moving forward in 2022, but it’s not only because of ethical issues but for smart practices and policies.
If data or systems are compromised, that’s a reputation killer as much as it is a serious liability. Competition is steep, and any pressure on a firm’s reputation is trouble. Likewise, with a sterling reputation in part due to its policies on security, law firms can attract new clients and can set themselves up for a successful 2022 and beyond.
5. Legal Tech: the right Legal Tech will continue to make everything and everyone work better, together.
Technology has been changing the way everyone works, but it’s been slower to hit the legal industry for multiple reasons. Now, however, due to the effects of the global pandemic, legal tech is making considerable progress. In fact, those law firms and legal departments that were early to adopt legal technology were also the same law firms or legal departments to best survive the pandemic, especially when all legal services and processes went virtual almost overnight. Others were forced to quickly catch up.
Now, the key is making sure your law firm or legal department has the right legal tech. Maintaining a legal tech stack that is little understood, underused, and not specific to the needs of the law firm or legal department can be more problematic than anything else. You should assess your needs and act accordingly.
2022 is a year of possibilities. And those possibilities are dependent on the above five trends that are currently driving the legal market.
There’s one thing we haven’t mentioned though, and that’s this: lateral moves. Talent is moving from one firm to another like never before experienced. Younger associates and partners are making moves as they look for better workspaces where they can enjoy productive collaboration and take advantage of the benefits legal tech has to offer.
So, 2022 isn’t only about your clients––retaining them or acquiring new clients––and how to add value to the dollar they pay, but it’s also about finding new talent and adding value to their daily workflows so that they stay and contribute to a successful 2022 for your law firm or legal department.