What do you feel will be the biggest challenges for the legal sector over the next 12 months?

The increasing importance of technology in the legal sector presents challenges and opportunities over the next 12 months. One of the biggest challenges presented by technology in the sector is the increase in pricing pressures from clients and competitors. With the rise of AI, legal technology capabilities have expanded to include traditionally time-consuming and low-value tasks such as due diligence, contract life cycle management and document review. This has also led to the increase in Alternative Legal Service Providers (ALSPs), as well as an improvement in perceptions about the quality of work ALSPs produce due to their effective utilisation of legal technology. The low cost of ALSPs presents a challenge for law firms, as a significant proportion of billable work risks getting transferred to these providers if firms fail to remain competitive. This presents a challenge for firms that use traditional billing models, as individual billable hour frameworks may lead to uncompetitive prices that clients no longer wish to pay. However, alternative billing models such as collective billable hours can present opportunities such as encouraging further collaboration within the legal sector.

Addleshaw Goddard is well equipped to overcome this challenge not only due to its innovative nature and successful integration of legal technology into its services but also due to the deeper insights that the firm delivers to its clients. AG’s service goes beyond working with clients on one-off legal issues. For example, AG has developed a leadership development programme for a client to prepare its General Counsel for future changes and uncertainties. Furthermore, the firm’s pricing remains competitive, further decreasing the risk posed to AG by ALSPs. For example, AG has used AI to cut a client’s legal costs by up to 30%. This holistic use of technology will draw clients to AG over cookie-cutter Alternative Legal Service Providers.

Our thoughts

Positives

• Discusses technology clearly, with good examples thrown in to show deeper research (contract life cycle management etc.).
• Shows good research into the firm, for example by mentioning the leadership development programme and the AI-related statistic.
• Well written, with a fairly clear structure.

Potential points for improvement

• I’m not sure the challenge of pricing pressures is caused by technology. Technology is a potential solution. So the logic doesn’t fully flow.
• Some unnecessary repetition (e.g. the phrase “challenge for firms” is used multiple times in some form).
• It seems to go off topic a little bit at times. For example, if the challenge is pricing pressure and the solution is technology, what is the relevance of “collective billable hours” in this context? It might be relevant to collaboration, but not the issue of clients wanting cheaper legal services.