Top 6 Legal Industry Trends to Keep an Eye On in 2024

 In Practice Pointers

Top 6 Legal Industry Trends to Keep an Eye On in 2024

Law is known as one of the industries most resistant to change, with many law firms sticking to traditional methods–but not without a good reason. These traditions have built some of the biggest practices that we know today, and they undeniably influence other firms to stick to what they know best.

All that is changing, however, with the arrival of new legal tech and constant innovation of standard legal practices. In 2024, we expect to see both big and even smaller law firms ride the wave of transformation in the field of law, and just like you, we can’t wait to see what the new year has in store for us.

Let’s take a look at some of the biggest legal trends in the industry today.

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6 Latest Legal Trends to Watch Out For

The legal sector is highly competitive and fast-paced by nature, which calls for constant improvement through strategies that align with current innovations available. There are too many legal trends to talk about, so we’ve narrowed it down to the six most relevant ones:

1. Increased Adoption of Artificial Intelligence Technology

Lawyers are turning to artificial intelligence to simplify legal processes and make them more efficient, made noticeable with the popularization of legal AI tools like Briefpoint, PatentPal, and Casetext. Most legal pros are no longer skeptical of this “new” tech but are instead embracing it as a nifty and cost-efficient legal assistant.

A LexisNexis survey involving nearly 8,000 participants across US, Canada, France, and UK law firms revealed that almost half expect AI to significantly change practices, especially in improving productivity and efficiency in everyday tasks. 

Meanwhile, Thomson Reuters highlighted 2023’s milestones in AI development, including a focus on safe and trustworthy AI applications in various legal functions.

2. The Rise of Cloud-Based Technology for Cybersecurity

Private cloud tech is a type of cloud-based computing and storage where the data belongs to the law firm that uses it, inaccessible to the public. The legal field handles sensitive and private client information daily, making private clouds a necessity as more and more firms go fully digital.

But why has cloud tech become so crucial?

The 2022 IBM Cost of Data Breach report showed that a staggering 83% of the organizations it surveyed had encountered more than one data breach, facing an unprecedented average total cost of $4.35 million—a peak for the year and marking a 2.6% increase from the year before.

Cloud security encompasses a wide array of protocols, tools, and strategies aimed at safeguarding data, applications, and infrastructure in the cloud, addressing key concerns such as data privacy, compliance, and protection against breaches and malware.

3. More Acceptance of Alternative Legal Service Providers and Fees

Simply put, Alternative Legal Service Providers (ALSPs) are services that take the grunt work from in-house legal teams. These might include document review, due diligence, research, compliance, and much more.

According to several reports, ALSPs now constitute a $20.6 billion market segment, having experienced a compounded annual growth rate (CAGR) of 20% from 2019 to 2021. This growth indicates a rapidly evolving market where the lines between ALSPs merged firms, law firms, and corporate law departments are increasingly blurring​​​​.

The report highlights that both law firms and in-house counsel are recognizing the value that ALSPs bring to the table, including specialized services, improved cost efficiency, and greater flexibility in headcount and talent management. 

Independent ALSPs represent the largest market segment, but law firm-owned captive ALSPs are emerging as the fastest-growing segment, indicating a strategic shift within law firms towards embracing alternative service models​​​​.

4. Shortening Lockup Periods with Technology

Most firms rely on billable hours to make a profit, but these hours don’t necessarily get paid right away. A “lockup period” refers to the time between completing work and getting paid. For larger firms, longer lockups may not make a significant change to cash flow, but it can be a huge problem for small firms with limited resources.

The 2023 Legal Trends Report by Clio emphasized the importance of reducing lockups for maintaining a healthy cash flow. It introduced the concept of “lockup” as a mix of “realization lockup” (work yet to be billed) and “collection lockup” (billed work yet to be collected), suggesting that technology, particularly electronic billing solutions, can significantly lower these durations​​.

Freshfields Bruckhaus Deringer, for example, has been focusing on reducing lockup by implementing internal strategies to decrease the waiting time for client payments. This effort is a response to the increase in lockup days, indicating a broader industry trend toward prioritizing faster billing and collection processes to improve financial health​​.

5. Rising Numbers of Freelance Lawyers

Some people might think that the legal profession is something you have to do on-site, inside an office where you can meet colleagues and clients face-to-face. That’s not the reality nowadays, especially with current technological advancements and shifting work preferences brought about by the pandemic.

Today, the legal world is adopting alternative work setups, as we can see by the increasing number of freelance lawyers. These attorneys come from diverse backgrounds, including law professors, lawyers caring for families, and retired or semi-retired legal professionals. There’s even a buzz about UK firms expanding their services to the US through remote work.

Overall, the appeal of remote work lies in the flexibility, work-life balance, and variety of projects, which contrasts with the traditional set-up.

Additionally, the increasing number of firms outsourcing work supports the rising trend of freelance lawyering. Nearly half of law firms reported using contract lawyers, indicating a significant shift towards integrating freelancers into traditional legal practice. 

This change is partly driven by the legal outsourcing market’s rapid growth, which is projected to reach significant figures by 2027.

6. More Law Firms Focusing on Combating Recession

Many industries are still reeling from the economic impacts of the pandemic, and the legal sector is no different. Today, legal professionals are more wary of economic uncertainty and finding ways to be more recession-proof.

The resilience and growth strategies that were emerging in 2023 have further evolved this year, with firms focusing even more on diversifying their various business practice areas and enhancing operational efficiencies to maintain competitiveness and profitability.

Midsize law firms, in particular, have continued to thrive by capitalizing on counter-cyclical practices such as litigation, labor & employment, and bankruptcy. This focus allows these firms to leverage the demand brought about by economic shifts, providing services that become more sought-after in challenging times, such as the cost of living crisis.

Additionally, law firms are increasingly adopting strategic measures to maximize efficiency and profitability. These measures include optimizing leverage, further reducing office space in response to hybrid work models, investing in technology and skilled staff like pricing specialists, and outsourcing non-core functions.

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The Future of the Legal Industry is Brighter Than Ever

The legal industry, while inherently orthodox in some ways, is not immune to change. Goals may remain the same, but the ways we go about it are always open for improvement.

As you can see, these key trends revolve around upgrading legal services and, essentially, the bottom line. With more efficient workflows and maximized potential, firms can stay competitive in a cutthroat legal market.

One way to embrace efficiency in your firm is to implement high-tech tools that minimize your tedious tasks, starting with the most time-consuming legal process of all: discovery. Briefpoint is a generative artificial intelligence tool that drafts discovery response and request documents for you, which would take the average lawyer hours–if not days.

With Briefpoint’s generative AI, you can focus on more value-adding work, produce consistent documents, and, ultimately, make your legal services a notch above the others.

Stay Ahead of the Competition with Briefpoint AI

Discovery responses cost firms $23,240, per year, per attorney. $23,240 estimate assumes an associate attorney salary of $150,000 (including benefits – or $83 an hour), 20 cases per year/per associate, 4 discovery sets per case, 30 questions per set, 3.5 hours spent responding to each set, and 1800 hours of billable hours per year.

Under these assumptions, you save $20,477 using Briefpoint, per year, per attorney.

Test Briefpoint yourself by scheduling a demo here.

FAQs About Legal Industry Trends

How can law firms integrate AI into their practices?

Start by identifying repetitive, time-consuming tasks that can be automated, such as document review or legal research. Investing in generative AI tools designed for these tasks can free up your team’s time for more complex work.

Are cloud-based cybersecurity solutions expensive?

While costs can vary, cloud-based solutions often offer scalable pricing models that can be more cost-effective than traditional IT infrastructure, especially when considering the potential cost of data breaches.

How can law firms make their billing more client-friendly?

Consider offering alternative fee arrangements, such as flat fees, subscription models, or success fees. Transparency and communication about costs are also key drivers of client satisfaction.

What should law firms do to prepare for a recession?

Diversify practice areas, focus on core competencies, reduce costs, and build a solid financial reserve. Strengthening relationships with existing clients and investing in marketing can also help maintain revenue streams and retain clients, which is especially beneficial for smaller firms.

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