Majority of small-medium firms plan growth and invest in tech – report

LexisNexis Legal & Professional have released a new report – Bellwether 2024: Lessons on law firm growth – which reveals nearly two-thirds of small- and medium-sized firms plan to grow in the next five years, and they’re investing in technology to help them get there.

The survey of 265 associates and senior leaders at small- to medium-sized firms revealed the number of firms with plans to grow organically increased by 57% in the last 12 months, rising from 40% in 2023 to 63% in 2024.

Legal technology is the top investment priority for small firms. More than half (56%) have increased their tech spend or have plans to increase it in the next 12-18 month, a significant increase from last year’s Bellwether survey. Only 26% have no plans to increase technology investment.

The appetite for organic growth saw merger or acquisition plans drop from 13% in 2023 to 10% in 2024. Firms that plan to continue maintaining steady revenue is less than half of what it was last year, dropping from 38% down to 18%.

However, small law firms said their biggest challenge over the next 12 months will be keeping up to date with the near-constant changes to both the legal industry and the law (70%), followed by meeting compliance regulations (69%). Almost a quarter (22%) are regularly relying on free-to-access resources for legal research, such as Google, forums, blogs or ChatGPT. Tim Rayner, Head of Small Law Go-to-Market Team at LexisNexis UK, said:

“Lawyers at smaller firms often lack the luxury of restricting their legal expertise to a specific area of the law. Instead, there is an expectation that they’re experts in everything. They need to be able to jump from one specialist area of the law to another in moments, otherwise they will struggle to keep pace, so access to the latest legal content will be critical.”

Hiring more lawyers was also a top priority for small firms, with 40% revealing plans to increase their headcount and 16% having already done so. However, in today’s competitive job market, retaining talent might be easier for firms to achieve. The survey revealed 62% of lawyers plan to still be at their same firm in five years’ time – and only 10% have ambitions to eventually move to a larger firm.

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