UK firms changing pricing models and adopting new tech to combat economic climate – find out more with Litera
Litera, a global leader in law technology, has revealed that UK law firms are leading the global race to adopt new technology
A new research report from Litera has revealed how law firms globally are reacting to a challenging economic climate. UK law firms are adapting by changing pricing models, cutting costs, and increasing fees, with 51% altering their pricing structures, 55% reducing costs, and 57% raising fees. Notably, UK firms stand out when it comes to adopting new technology to combat these economic headwinds, with 60% integrating new tech solutions, surpassing the US (48%) and Australia (30%).
Despite these economic challenges, over 90% of UK law firms remain confident in their profitability metrics. Serving as testament to this, only 20% of UK firms are currently considering reducing headcount, coming in stark comparison to their counterparts in the US (32%) and Australia (46%).
The report highlights significant changes in fee arrangements, with 92% of UK firms’ work involving alternative fee arrangements (AFAs) for nearly half or more of their work. This is the highest rate compared to the US and Australia. Flat fees are the most common AFA for enterprise-sized law firms in the UK, with 90% using this arrangement, the highest among the regions surveyed.
Technology adoption is another area where UK firms excel. They have been quicker to integrate new technology solutions in response to economic pressures, with 73% planning to adopt AI technology over the next 12 months. This proactive approach positions UK firms ahead of their international peers.
Avaneesh Marwaha, Chairman of the Board at Litera, said: “It is really encouraging to see how UK law firms are adapting to the current economic climate by adopting new technology. Out of all the regions surveyed, the UK had the lowest number of firms reporting that they plan to reduce headcount, suggesting that the implementation of new technologies has created confidence in their ability to enhance their profitability and operational efficiency.”
“The data has also revealed that fee arrangements have changed drastically across all regions as a response to economic headwinds, with flat fees in particular now becoming the most popular option for enterprise-sized law firms in the UK. We believe this is due to the success of tech adoption and confidence within the industry. Therefore, giving partnership greater assurances around profitability of the fixed fee.”
