Latest news IT resistance lingers nonlegal firms a threat inhouse teams underresourced

Some lawyers still reluctant to embrace IT
Persuading lawyers to use new IT systems is one of the key challenges facing law firms, according to new research from Managing Partner. While the study indicates that the most successful law firms of the future will have lawyers who embrace new technologies, there is still hesitancy among investing partners to fully embrace the potential of IT. The magazine’s second annual legal technology survey was conducted in December 2014 and received 144 responses that were split between local, regional, national and international firms. About two thirds of the respondents were UK-based.

Fifty-six per cent of respondents felt that technology will have a high impact on law firms in the next three to five years, while a further 41 per cent suggested it will likely have a moderate impact. According to Managing Partner, one of the other key issues for firms is training users on how to use the new technology systems, while the drive towards greater efficiency in the delivery of legal services is also problematic for firms.

Non-legal firms a growing threat, poll finds
A new poll reveals that almost two thirds of respondents to a law firm survey are concerned about the threat of legal service offerings from non-legal firms. However, 67 per cent of the firms surveyed indicated that they would not consider merging with a non‐legal firm such as an accountancy practice, a financial institution or outsourcing firm, even though some of them have lost clients or projects to non‐legal firms.

According to the InfoTrack/Chilli IQ poll of participants in the legal sector, more than 45 per cent of respondents know of other legal firms that have lost work to non‐legal firms. There is little consensus around the reasons for such loss of work, with 37.5 per cent indicating they do not know, 16.7 per cent suggesting better pricing may be the chief reason, while 26 per cent believe that better client management and more innovative services are the deciding factors for clients turning to non-legal firms.

“Competitive pricing, new business models, technology and increasingly sophisticated buyers (have) significantly changed the legal landscape over the last decade and we can reasonably assume that these aggressive new providers will continue to drive change on a large scale,” InfoTrack chief executive Stephen Wood says. “The challenge for firms now is to genuinely understand the potential threats to their business lines, play to their strengths, make full use of technology to enhance their efficiency and competitiveness and make sure their client relationship management practices are best of breed.” The survey results are based on responses from about 30 managing partners, senior partners and general counsel from leading firms around Australia.

In-house legal teams still ‘under-resourced’
Although in-house legal teams continue to grow, a UK survey reports that many general counsel still feel that their teams are under-resourced and need to ramp up staff development to increase retention rates. Nabarro’s annual general counsel survey is based on responses from 100 senior in-house lawyers from 90 companies. The survey’s key findings include:
• The headcount of lawyers, paralegals and secondees is rising. This can create both talent management opportunities and talent management problems for GCs.
• Despite such growth, most of the GCs still feel under-resourced, with 43 per cent saying they need more lawyers.
• A growing number of GCs prefer to recruit from other in-house legal departments, rather than from firms in private practice. Although lawyers from law firms have good legal skills, GCs think they lack the necessary business understanding and industry knowledge.
• GCs are sanguine about the fact that it is hard for them to hold on to their most gifted staff, with there being widespread acceptance that turnover of talented people is inevitable.