Legal Workflow asks: What does 2020 hold for your law firm?
In this article we look at what some of the predictions and analysis from analyst, accountancy and consumer organisations.
Gartner expects that IT spending in EMEA will begin to recover in 2020 after three consecutive years of decline. During 2019 we suffered a period when local prices rose for technology hardware due to the unfavourable exchange rate between the British Pound and the US Dollar.
Is your law firm in a good place with regards to current and future technology requirements? That’s an important question to consider for 2020, particularly as cyber risk is a key area of concern for law firms, say PWC in their Annual Law Firms’ Survey 2019. Data security and privacy failures can quickly ruin reputations. It is therefore disconcerting to see relatively low levels of senior management involvement in crisis management exercises, and few firms where cyber risk is managed at executive board level.
Impact of Brexit
PWC suggest the impact of Brexit on legal firms will depend on their ability to respond to the opportunities and threats that Brexit presents. Despite the uncertainty of Brexit and other tensions, a majority of firms have still reported revenue and profit growth (albeit at slower rates than seen in 2018).
Forrester also acknowledges that 2019 has been an uncomfortable year in Europe, and that "2020 promises yet more volatility". The UK economic and technical market growth has steadily weakened since 2016 and with continued ambiguity around Brexit this could continue to depress investment in the UK.
"Which" estimate that house prices have fallen in some areas and fewer sales have taken place in 2019 compared to 2018, although others argue that it's simply a long-overdue market correction.
There has been a stagnation in the market in areas such as London, the South and East, and this has spread to other areas in the latter half of 2019, probably driven by buyers holding back hoping that prices would fall.
Estate agents are hopeful that once the election is past, and clarity emerges on Brexit, activity in the sales market will improve. But they expect it will take a little longer to impact the rental market, with landlord confidence currently very low.
What’s top of mind in 2020?
Forrester reports a new trend is emerging, with a steady growth in the number of consumers saying they actively consider company values when making a purchase. But beware the firms who misjudge how to express their values, and those who deliberately offer surface-level-only commitments.
For many firms, regulatory compliance and security are top of mind, particularly where European data and GDPR is concerned.
Forrester predicts that 2020 will be the year of the regulator in Europe and that we can expect regulators to take action, with "consumer class actions and GDPR enforcement".
"In 2020, ransomware incidents will grow as attackers learn that holding data hostage is a quick path to monetisation," with them demanding ransom both from the consumers and the device manufacturers, who they will say, need to "fix this issue".
The ongoing instability and slowing growth in 2020 will put pressure on businesses to look for cost controls and efficiency improvements, and legal firms are unlikely to escape those pressures.
HR will be impacted as the employee experience and changing workforce dynamics due to new working patterns - working with robots, interacting across the internet - is affected by digital transformation.
Talent retention will also be key - is your firm recognising and responding to talent?
PWC’s survey also found that new market entrants are a concern for many mid-tier firms - 18% of Top 26-50 and 8% of Top 51-100 firms are somewhat concerned about this threat.
Professor Richard Susskind
For those of you following trends in the courts, you may be interested to learn that Prof Richard Susskind has a new book out talking about Online Courts and the Future of Justice – which, he believes, would help to reduce the backlog of cases and court costs. He says that online courts are the future of justice, in the UK as well as the developing world. Small claims are very costly and our current system seems out of step in the digital world.