Before the pandemic rolled across Europe and the rest of the world, law firms there had been planning to address just one major challenge: What a post-Brexit legal market would look like, both for their own services and that of their clients.
Now, as COVID-19 shows no sign of abetting and many countries are gearing up for a second wave of the pandemic, this challenge has trumped all others.
Yet, the European legal market has proven resilient, adapting to these challenges and forging ahead as best it can muster. Indeed, the latest research among chief legal officers and the legal industry’s largest organizations suggests there are two main client-side pressures that firms across Europe are focused on as they look to retain their strength through 2020 and beyond.
Into this, the Thomson Reuters Institute has just published the 2020 State of the Legal Market in Europe, which takes a look at the pressures law firms across Europe are under, how they are seeking to address these challenges, and what opportunities firms might find even in today’s market.
First, about those twin pressure from clients:
Fees — Clients have always been eager to control their legal spend, but by the end of 2019 most corporations were reporting that they were focusing on increasing efficiency, which of course will inevitably put pressure on budgets.
Competition — New entrants into the European legal market — sometimes coming from international law firms, especially from firms headquartered in the U.S. — are ratcheting up client-side pressure from this increasing competition that independent, domestically focused law firms face. In addition, the biggest increase comes from alternative legal service providers (ALSPs) that threaten to disrupt the market with their innovative approaches to delivering legal services.
The report also delved into various solutions to both of these pressures — solutions which have their roots in firms’ ability to adapt to the changing market. Indeed, those law firms that embrace new technology, can offer cross-border expertise, and are willing to improve the consistency of their service will see the best chance of growing their revenues across Europe, the report stated.
In fact, several of the toughest challenges seen in the market — from COVID-19 to Brexit, GDPR, and even climate change — can be seen as growth opportunities for those firms ready to adapt and invest because all of these issues are creating new demand for legal services.
Due to the increased flow of work driven by this crisis, recovering markets, or regulatory change, it would be easy for incumbent law firms to be complacent. That would be a mistake, however, because new competitors are also eager for this business and clients are becoming much more demanding, the report shows.
You can download a copy of the 2020 State of the Legal Market in Europe report here.