A new report by PricewaterhouseCoopers says that Big Law firms are not keeping pace with cutting-edge technologies and growing client expectations.
In a survey of more than half of the U.K.’s 100-largest law firms by revenue, PwC found that 70 percent have invested in client collaboration tools and about 40 percent use automated document production software.
But just 11 percent of firms surveyed by PwC utilize big data and predictive analytics, while more sophisticated technologies such as smart contracts and blockchain—a tool that allows information to be shared and updated across a network—are “barely featuring.”
David Snell, who heads PwC’s law firm advisory group, said that firms need to take “fundamental action” to improve such areas as client service delivery, business support and recruitment in an increasingly competitive market.
“Firms need to be more agile in embracing emerging technologies, which will ultimately help them achieve more effective staffing levels and react faster to changing client demands,” he said. “This will require significant investment, and firms need to think carefully as to how this will be funded.”
The report also said that firms must tackle workplace management issues in order to “re-balance” performance and profitability, which has become squeezed by rising staff costs and flattening demand for legal services.
PwC has in recent years invested heavily in its own legal services arm, PwC Legal, which now employs more than 3,200 attorneys across 90 countries. The American Lawyer reported last month that PwC is launching a U.S. law firm business.
While PwC and other alternative service providers are becoming increasingly significant players in the legal market, a recent survey by research company Acritas found that they still lack the brand strength of traditional law firms.
Acritas’ latest global elite brand index, which was published last week, was headed by Baker McKenzie for the eighth consecutive year. Baker McKenzie’s brand is now twice as strong as any law firm’s, according to Acritas data, which is based on interviews with more than 1,000 in-house counsel at billion-dollar organizations across 50 countries.
EY was the highest-placed alternative legal service provider in Acritas’ global elite ranking, in 77th place. But in another sign that suggests the Big Four will become increasingly serious competitors to Big Law firms, EY would rank among the top 20 elite law firm brands if the responses were limited to in-house lawyers under the age of 40.