UK clients are seeking to form long-term trusted relationships with their law firms, says Thomson Reuters' new "State of the UK Legal Market 2021" report
Clients in the United Kingdom are increasingly looking for law firms willing to invest in building long-term trusted relationships and a deep understanding of their business operations, according to one of the key findings of the State of the UK Legal Market 2021 report, published this week by the Thomson Reuters Institute. At the same time, a law firm’s reputation for quality and technical expertise still matter, especially as the ongoing disruptions in the legal market are resulting in renewed pricing and competitive pressures.
These realities, compounded by pandemic-required shifts to remote working environments, courthouse closures, and other restrictions, as well as sudden shifts in client priorities resulted in an environment in 2020 defined by agility and flexibility for many U.K. law firms.
Now, law firms and their corporate clients are leveraging these disruptions, turning them into opportunities to re-evaluate how they can best meet the evolving legal needs in the market. Demand for cross-border legal advice has increased since 2017, according to the report, despite the economic uncertainty in the lead-up to Brexit, with 80% of U.K.-based corporate clients actively looking for international legal support. Last year, 42% of U.K. corporate legal spend was dedicated to international legal work — significantly higher than the global average of 35%. Nearly twice as many U.K. corporations (38%) are planning to increase their international legal spend compared with those planning to decrease spend (21%).
Amid the uncertainty of the current market, clients have increasingly turned toward the perceived safe harbors of trusted, long-term relationships for their legal counsel as they look beyond short-term transactional goals. According to the report, strong client-firm relationships are increasingly important, especially when a firm invests the time to thoroughly understand a client’s operations and business strategies and views the relationship as more of a business partnership. Nearly half of U.K. clients (47%) state that the main way their law firms can bring more value is to commit to a longer-term partnership.
U.K.-based corporate clients themselves remain under budgetary pressures, the report notes, and many are looking for law firms with innovative, technology-driven legal service delivery models that can provide greater flexibility and value. And law firms are increasingly adopting such models in response to both competition from alternative legal service providers (ALSPs) and non-law firm providers of legal services such as the Big Four accounting firms.
In another wrinkle to the U.K. legal industry, many lawyers have strongly indicated they want to continue aspects of the type of flexible working arrangements used during the pandemic as many have come to appreciate and enjoy despite their initial trepidation at the onset. An overwhelming 86% of lawyers surveyed said they want to retain options such as remote working and flexible work days, and many would consider leaving their firm otherwise.
The changing dynamics within the U.K. legal industry are proving to be a catalyst for many firms to provide for greater investment in technology and knowledge-sharing platforms. Three-quarters (74%) of senior U.K. partners said they believe their firms should be investing more in technology, while 89% of U.K. corporations stated that their law firms should be looking to explore more innovative ways to use technology.
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