This years PwC Annual Law Firm Survey presents evidence of a second year of stability and recovery for the UK legal sector. ‘This year’s survey shows a sector that is continuing to evolve, with the pace of change beginning to pick up as global economies improve.’ says Kate Wolstenholme, PwC’s UK business service sector leader.
PwC’s 2015 Annual Law Firm Survey has revealed that:
- The number of UK firms increasing fee income is higher than any time since 2008 with 82% (2014: 70%) of all firms increasing fee income above inflation.
- Pricing pressure remains, with fixed fee arrangements becoming increasingly popular, making up 32% of fee income for the top 25-50 (2014: 21%) and 38% of top 51-100 fees (2014: 26%).
- New entrants to the market are bringing disruption and fuelling the need for firms to adapt. 80% of firms now recognise the ‘need to respond to the digital age’. But only 23% have so far done something about it.
- Technology has been identified as the number one priority for firms in the coming year with 94% planning to improve their use of technology and 95% planning to undertake major IT projects to improve efficiency in the next 12 months.
So, amid intense price competition how can firms improve their profit margins in 2016?
According to Martin MacDuff, Managing Director of Redbrick Solutions, using technology to drive efficiencies is essential.
He comments “We meet law firms of all shapes and sizes and find that there is a real divide. Many are using significantly out of date technology that is having a negative impact on their profitability yet this old system cost them so much money 10 years ago they can’t bear to move away from it.’
‘On the other hand, we have clients who have increased their instruction levels by 110% over the last couple of years and have only increased their headcount by a fraction of that because they have streamlined their processes, automated as much as possible and are making business decisions based on financial insights they were unable to access previously.’
Martin concludes, “having powerful business information available at the click of a button in an easy to read format has made a world of difference to the way firms are viewing their business. They can now easily understand costs, profit and productivity across either the whole business or targeted areas and are using that information to drive steady growth.”
Making good use of technology is going to be key in 2016, with 95% of firms agreeing that technology is their number one priority, so if you haven’t yet seen Redbrick Solutions now is the time to act.
If you would like to understand more about legal technology solutions and the benefits they could bring to your business, Redbrick Solutions offer no obligation, one to one consultations. To book, please call 0845 166 2629, or contact us using the form below.