Optimistic about their prospects in 2023, small law firms are eschewing new tech, content to update and formalize what they had installed during the pandemic
Among small law firms, optimism remains strong, according to the recently published 2022 Report on the State of US Small Law Firms. After all, 90% of small firm leaders deemed their firms’ operations as successful or very successful, while the majority of respondents expected revenues per lawyer, demand for legal services, and profits for lawyer to increase over the coming year.
However, that optimistic outlook didn’t necessarily translate into new tech adoption, as fewer small law firms adopted new technologies in 2022 than in either of the previous two years. What small firms did focus on, however, was supplementing and formalizing technologies that had been recently adopted, such as video conferencing platforms that were pushed into use during the pandemic. Further, there’s reason to believe that as small firms anticipate a business boom in 2023 and beyond, business development and marketing upgrades are firmly on their radar.
Just 41% of small law firms adopted new technologies in 2022, according to the report, which was down from 50% in 2021 and 45% in 2020. That decrease in new tech adoption may largely be a function of technology budgets that were static — 78% of small law firm leaders said their budget for legal-specific software in 2022 was unchanged from the year prior, and similarly 82% said their budget for non-legal-specific software also was unchanged. A higher proportion of firms had reported increasing budgets for both types of software in 2021.
A more status quo state of being didn’t surprise Stephen Curley, former chair of the American Bar Association’s GPSolo Division and principal at the Connecticut-based Law Offices of Stephen J. Curley. At his firm, technology spend largely focused on bolstering the use of recently adopted technologies, such as Zoom, Curley says.
“Some of the investments that I made back in 2020 that were more or less done in an ad hoc or an emergency basis, I just backed up,” Curley explains. “I didn’t branch out into something new or different come ‘21 and ‘22.”
Focusing on business development & marketing
When small firms did plan tech investments, however, the report found that business development & marketing priorities played a bigger role than ever before. For example, the percentage of firms planning on purchasing billing & invoice software rose from 6% in 2021 to 18% in 2022. The firms investing in marketing software or a firm website, meanwhile, rose from zero of the 80 respondents in 2021 to 14% of respondents in 2022. These shifting tech priorities mirrored a rising goal for small firms: To grow the size of the firm, which respondents ranked as their top firm goal for the first time.
Part of the reason for these increases could be simple: the emergence of a larger potential client base since the pandemic, Curley notes, adding that previously, as an attorney located in Stamford, Conn., he focused his business development & marketing efforts on clients in his immediate vicinity and out of his local courthouses. Now, with virtual meetings and remote court proceedings, it was possible to take on business in other areas of Connecticut, such as in the state capital of Hartford.
“The reach of a solo who has expertise in those areas isn’t necessarily confined to where you can drive or get to on a Monday morning, when it might have been five years ago,” Curley explains. “Now you can have a more statewide practice, and you can be competitive in other regions of the state that you wouldn’t have otherwise been able to thoughtfully do.”
Curley doesn’t see remote proceedings ending any time soon, indicating that he was planning on continuing to invest in video and other related technologies. Indeed, the report echoed this point: More firms than ever before (73%) said that more than 10% of their initial client meetings were done remotely. More than two-thirds also said they preferred having marketing events, product trainings, and sales & renewal conversations with outside vendors in a virtual setting. And while the proportion of firms with more than 10% of attorneys working remotely dipped slightly from 2021, the survey still reported more than half of firms (60%) with that level of attorney remote work.
Taken together, the report paints a picture of small law firms that are conscious that changing business development and legal practice strategies is necessary for the evolving legal world and are solidifying their efforts to do so.
Not surprisingly, this technology adoption is not only taking place among younger, potentially more tech-savvy attorneys, but also among more seasoned attorneys who find themselves at the frontlines of technology now that the virtual legal world has proven to not be a fad, Curley says. “I think, to a degree, those who didn’t throw in the towel and are still practicing are going to find themselves more and more wedded to it by choice or otherwise.”
And particularly among attorneys who are a decade or more into their career and may be at the peak of their revenue-generation power, it’s even more crucial to keep up with the changes. “If you’re not up to speed on that technology, you’re losing your edge and you’re losing the ability to maximize the most productive years in your career,” Curley adds.