2023 Trends in Law Firm Operations - and How Technology Will Help Shape Them

We hear a lot about legal technology changing the way law firms operate, but technology doesn’t drive change: it empowers law firms to make the changes they want to make, or that they need to make to stay competitive and grow their businesses. Finding the right technology tools is one increasingly-important way you can increase profitability, retain the best employees, improve client service, and otherwise take your law firm to the next level.

Here are four ways law firms are likely to evolve in 2023, and how legal technology will make those changes possible–and far less painful than you might imagine.

1. Shifting Office Structures and Employee Relations

The combination of low unemployment, high demand for quality employees and new norms established during the pandemic means legal professionals, staff, and contractors have different expectations in 2023 than they did just a few years ago. With the demand for attorneys and other legal industry employees projected to climb over the next several years, law firms that want to hire and keep the best talent will have to meet those expectations. The freedom to work remotely, at least some of the time, is an increasingly-common goal.

More than half of attorneys who responded to the ABA’s 2022 Practice Forward survey said they worked from home half the time or more. 89% in private practice said they had the option of working remotely. And, that option matters to them. 44% of lawyers in practice for 10 years or less and 35% of those in practice 11-20 years said they would leave an employer for one that offered greater flexibility to work remotely.

The vast majority said that working remotely either had no impact on or improved their productivity, and there’s some evidence that’s accurate.

And that’s just the lawyers. Last year, an Axios/Harris poll revealed that 84% of Millennials said the ability to work remotely was important. The time for dismissing the demands of Millennials in the workforce has passed (if it was ever appropriate). That generation makes up more than 35% of the workforce today, and the Bureau of Labor Statistics (BLS) says that share will continue to increase across the remainder of the decade. Gen Z is close on their heels. The oldest members of the youngest adult generation graduated from college a few years ago, and are joining the workforce at a rate of millions per year.

The ability to work remotely is important to other generations, too–both older and younger. 40% of respondents to the Axios/Harris survey referenced above said they would take a pay cut to move into a more flexible job. And, more recent data presented by Axios shows that 50% of job applications submitted through LinkedIn are for remote work, though just 15% of job postings on the site offer that flexibility.

Once upon a time, regular work-from-home and other remote work would have been very difficult to coordinate in a law firm. But, with case management platforms like Neos that are hosted in the cloud, accessible from anywhere, and allow real-time collaboration, it’s seamless to work from different locations without missing steps, duplicating work, or introducing inefficiencies.

In fact, when forced to transition to remote-based work, Indiana-based personal injury firm Shad and Shad

2. Law Firms are Looking to Do More With Less in 2023

Many law firms saw declines in revenues during the pandemic, then began to recover only to be confronted with the threat of a looming recession. Pandemic adaptations may have carried unexpected costs, and firms that shifted largely to remote work may have been paying for seriously underutilized real estate.

All of that adds up to competing goals in 2023: increase revenues and cut costs. Fortunately, the efficiencies legal technology offers can go a long way toward reconciling those aims. That starts with the trend toward remote work that we’ve already discussed. When your firm embraces a shift toward allowing more attorneys and staff to work from home–either entirely or a significant percentage of the time–you may have the opportunity to downsize office space.

A shift to cloud-based technology can also ease the demand for space by eliminating on-site servers. And, relying on technology hosted by the provider can free your firm from the ongoing cost of keeping in-house servers up-to-date and the need for in-house IT support or a contract provider to keep your technology running smoothly.

Technology can also help increase revenues and cut costs in a variety of other ways, including:

• Automation can reduce the number of employee hours necessary to complete routine tasks, allowing you to operate efficiently with fewer staff members or increase your productivity and revenues without increasing staff.
• Productivity tracking in case management platforms helps you quickly discover when you’re not getting your money’s worth and step in with training, redistribution of tasks, or replacement of an employee not pulling their weight.
• Business intelligence helps you identify the most profitable case types for you, and to understand where you’re investing more than a case is worth or getting slim returns for your efforts. Similarly, ROI reporting helps ensure that you’re marketing through the right channels and focusing your advertising dollars on the most profitable efforts.

Many law firms already have access to some or all of these features in their law practice management/case management platforms. But, they are underutilized. ABA Tech Report data showed that 63% of respondents reported that they had law practice management/case management platforms available to them. That represents an increase across all law firm sizes. But, usage didn’t match up. And, while many firm sizes showed an increase in use of these tools, small law firms of two to nine attorneys showed a significant decline in usage.

It’s interesting to think about what that 63% figure means. While the trend toward availability of case management/practice management technology continues, this suggests that more than ⅓ of attorneys weathered pandemic shutdowns without the benefits of integrated remote access and collaboration on case files.

3. Improving Customer Experience and Accessibility

One key concept in the effort to better service Millennial and Gen Z clients (and even many in Gen X) is to make it simple to conduct their business with you online. International Data Corporation (IDC), publisher of the annual Consumer Pulse survey report, says ¾ of Millennials and ⅔ of Gen X have an “online first mentality” when it comes to shopping. And, the company predicts that by 2026, 64% of those engagements will take place on mobile devices.

Those numbers are similar for consumers shopping for legal services versus physical items. One recent survey showed that 64% of respondents would search for an attorney on Google, versus just 30% saying they’d take the traditionally-popular approach of asking a friend or family member for a recommendation.

Clearly, that means it’s important to market your firm effectively online, but that’s only the beginning. The online consumer who prefers to search for you on a mobile device is looking for a positive experience when they land on your website–options like easy-to-navigate content, simple online contact options like quick forms, and the option to chat with a representative immediately.

It also means offering your clients and prospects options for communicating, conducting business and making payments that are comfortable and convenient for them. That hasn’t changed, but the preferences you should be looking to accommodate have. Much has been written across the past several years about why Millennials don’t like phone calls. One recent survey even found that a large majority of Millennials sometimes have trouble working up the courage to make a phone call.

As a service provider, you don’t necessarily need to get caught up in the reasons. You do need to acknowledge that as much as you might like to get a prospective client on the phone as soon as possible to move the relationship forward, your prospect may not be on board.

That continues after you’ve converted the prospect to client, meaning you’ll want to provide other paths for your clients to interact and collaborate. Legal technology assists with this in many ways, including:

• The ability to automate updates, so your client can receive information about their case by text or other quick, concise, digital means.
• The option of managing multiple communication channels from within your case management platform, so you can accommodate client preferences without having to jump from one platform or device to another.
• The ability to offer online collaboration and document exchange, such as having contracts executed electronically through a platform and allowing clients to upload their documents, complete questionnaires, and otherwise provide information through your platform.
• Access to flexible online payment options through your law firm website or client portal.

4. Ever-Increasing Attention to Security and Data Privacy

Over the past 15-20 years, the security burden on law firms has increased significantly. Where a law firm might once have protected client privacy and confidentiality with a locked file cabinet in a locked office, attorneys are now responsible for educating themselves sufficiently about technology to ensure that they’re protecting that information in a digital environment. Law firm response to this has been inconsistent at best, with some attorneys avoiding cloud-based services altogether due to the perceived risk and others using cloud-based services intended for the general public, such as Gmail and Google docs.

Others have partially avoided the issue–by design or incidentally–by minimizing the use of technology in their practices. But, as the earlier part of this article describes, that option is becoming less and less viable. Working with an established legal technology provider doesn’t relieve you of those responsibilities. It’s still up to you to vet the provider and determine that your clients’ information is secure. But, using trusted technology designed for legal practice does relieve you of much of the burden of actually managing the risk.

For example, the right law firm case management provider will keep your client data secure in a firewalled environment, will monitor security and perform regular updates as appropriate, will employ end-to-end encryption, and will ensure that the information is physically stored in highly-secured data centers.

Solutions like multi-cloud hosting also protect against the loss of data or downtime that might jeopardize your client’s interests and breach your responsibilities.

Moving Your Law Firm Forward in 2023

Law office operations are changing for many reasons: changing client expectations, shifts in the economy, a more competitive labor market, and more. The right legal technology can smooth those transitions, save your firm money, better serve your clients, and increase revenue. When you think about your goals for your firm this year or operational issues you need to solve, make “What technology can help me with this?” your first question.

Daniel Farrar is the CEO of Assembly Software and brings 25+ years of experience successfully leading Fortune 500 companies and technology and SaaS businesses.

Neos, powered by Assembly Software, is the next-generation cloud-based case management software that boasts the top features of two of the legal profession’s pioneering case management brands, Needles and Trialworks.

Learn more at assemblysoftware.com