Richard Skelley
How might the landscape evolve for you high-street law firm in 2024?
Explore the five key trends influencing high-street legal practices: the economy, the housing market, technological advancements, people & HR, and evolving client expectations.
Economy
Although the UK’s economic activity has surpassed 2023 expectations, the future outlook remains fragile and susceptible to shocks. The potential risks are tilted towards the downside, arising from enduring inflation, delayed effects of monetary policy, and structural weaknesses in the labour supply.
In a recent report by KPMG predicts modest GDP growth of 0.5% in 2024 and only to pick up towards its steady-state rate of around 1% to 1.5% in 2025.
A report by Lloyds Bank found that seven out of 14 sectors of the economy reported growing demand, as measured by new orders, in December 2023, more than twice as many as in November 2023.
A bounceback in the moribund property market, high levels of demand for flights and holidays and rising disposable incomes after a long period of decline were all credited with giving business a lift in confidence.
So, slow and steady confidence will come back into the economy, building momentum throughout 2024.
Housing Market
Slow and steady is also how the housing market is predicted to follow the general UK economy. In a recent Nationwide report, the outlook for the UK housing market is “more positive” as prices improved at their strongest rate in a year.
The building society’s index found that the average house price had increased by 0.7% in January on the previous month – a significant turnaround from the December figures, which showed a 1.8% decline in prices, (Nationwide, Feb 2024).
Robert Gardner, Nationwide’s chief economist, said: “While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive.”
Technology
AI is taking over. Terminator style. That’s what maybe took the headlines in 2023, but it’s not all doom and gloom. Technology will further help law firms provide a more comprehensive service to clients.
AI can be a great “co-pilot” for legal professions, advanced algorithms can swiftly analyse vast amounts of data, ensuring thorough due diligence in property transactions. AI systems can identify potential risks, anomalies, and legal complexities at remarkable speeds, assisting legal professionals in making well-informed decisions.
An example could be to prompt all of your litigation data from previous cases and provide a ‘second opinion’ some further insight on likely win outcomes.
Absolutely, the democratisation of technology, including AI tools like ChatGPT, has been a game-changer for smaller SME firms in law. The low cost of accessing these tools has levelled the playing field, allowing smaller firms to harness the power of advanced technologies without requiring the massive IT budgets traditionally associated with such innovations.
Tread with caution though. Co-pilot, not pilot.
People
The war for talent was making it “very hard” for firms to recruit and retain top quality staff.
Following the significant wave of resignations in 2022 and 2023, job seekers have become more selective in choosing their workplaces and prospective employers. Shifts in priorities and preferences have emerged, with employees expressing a strong willingness to change positions in pursuit of better opportunities.
As of 2023, millennials are the biggest group in the UK workforce, at 35 percent. Generation Y (Millennials): Born 1981 – 1996. Age 27 – 42.
Current job postings in the UK are 42% higher than pre-pandemic levels, and a staggering 95% of employers report significant difficulty in identifying new talent.
To navigate this intricate landscape successfully, law firms actively engaged in hiring will need to revamp their recruitment strategies, placing emphasis on crucial elements that resonate with top talent. Flexibility, empathy, and diversity are anticipated to remain pivotal influencers in the 2024 recruitment market.
Client expectations
The competition on the high street for legal advice has never been fiercer.
In our consumer reach “Understanding your clients”, over 70% respondents told us that they contact two or more law firms when looking for legal help.
20% of people looked at four!
As more people turn to the internet to research and choose legal services, as the demographic changes, it becomes crucial for law firms to adapt their marketing strategies to meet the changing demands of their potential clients.
This means that your enquiry process must be robust to ‘win’ more clients and be able to help more people in your community.
Also, once you ‘won’ a client there must be a process to stay in regular contact and provide cross sell opportunities to the legal teams.
A client now expects technology and people to deliver an exceptional service, working in harmony. This you can call your brand experience. A report by data company IPSOS, “The forces of customer experience”, highlights the benefits of building a relationship with your customers: “When a customer is emotionally attached, they are far more likely to express a preference towards the brand, much more likely to recommend the brand, and significantly more likely to stay with the brand in future”.
Happy clients come back time and time again.
Key learning points
In the ever-evolving landscape of high-street legal practices, the year 2024 holds both challenges and opportunities for local law firms.
It’s evident that economic resilience is slowly returning and in this dynamic environment, law firms that navigate these trends with agility, embracing technological advancements and prioritising client experience, are poised for success in 2024 and beyond.