UK legal industry to raise fees and work longer hours in 2023
February 20, 2023
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Research found UK law firms concerned by rising costs and inflation, expected impact to profitability throughout all of 2023.
Amid a turbulent economic landscape in 2022, involving a looming recession and rising inflation, 64% of UK law firms said they were planning to raise their fees. The research, conducted by Clio, the world’s leading cloud-based legal technology platform, also found that 67% of legal professionals were still working longer hours than they were before the COVID-19 pandemic, despite saying they had more ‘flexible’ working arrangements.
Clio conducted this research to complement the release of its Legal Trends Report, a substantial study of the working lives and legal trends among lawyers, to highlight the impact that a worsening economy was having within the UK specifically– both on individual lawyers and firms as a whole. The trends observed in the UK were ultimately reflective of broader global shifts, with law firms worldwide grappling with similar economic challenges and technological transformations.
Seven in ten UK lawyers (68%) felt that they had a better work-life balance than before the pandemic. However, almost the same number (67%) also reported working longer hours due to flexible working and working-from-home arrangements, according to Clio’s research. These figures reinforced the results of the 2022 Legal Trends Report, which highlighted the challenges felt within different territories and revealed that 86% of lawyers say they still work outside the nine-to-five working day, 74% work “after hours,” and 69% communicate with clients on weekends.
In 2022, half of UK law firms (50%) expected rising costs and inflation to impact their profitability. Analysis in Clio’s 2022 Legal Trends Report suggested that lawyers’ fees were approximately 3% behind inflation. To secure cash flow, law firms’ top three focuses for the year ahead were improving efficiencies in their current model (33%), securing new business (32%), and looking for new tech to help improve practices (29%).
Reuters’ 2023 State of the UK Legal Market Report echoes this sentiment, also highlighting that economic pressures are driving firms to enhance efficiency and invest in technology to maintain profitability. In fact, the report emphasizes that technological innovation in law doesn’t need to be especially disruptive – technology that helps with electronic reporting, online document management, or case management, for example, can give lawyers significantly more time to focus on strategic, big-picture issues, rather than administrative work.
Commenting on the 2022 research, Alistair Wells, Co-founder & Director at UK law firm Tend Legal, said: “The current economic situation presents great opportunity in the market. With fees of traditional law firms rising, as they seek to stay on top of the ongoing salary wars, clients are starting to look for alternative options for legal advice. This makes way for smaller, leaner, and more agile firms that offer excellent, client-focused service at a better price point. As a result, I expect that we will see a lot of these smaller law firms increasingly taking work from the much larger players.”
Almost all UK law firms (95%) expected tech to play a key role in helping their business remain profitable in 2023. However, there are still barriers to technological transformation – the most common issues were price (52%), training expectations (47%), and time (40%).
Sarah Murphy, General Manager at Clio EMEA, commented: “We’re at a crucial time for the industry. The uncertainty and pressures within the economy are hitting everyone and we felt it was important to understand how that could impact daily working life.
“While it’s great news that legal professionals have more flexibility in their working arrangements, it’s essential that they maintain a positive work-life balance. Overworking is still overworking, even if you’re at home and have flexible hours. One important part of reducing the workload is leveraging technology, and it’s reassuring to see that the vast majority of UK law firms agree.
“In addition to greater flexibility and job satisfaction, cloud software also offers significant business benefits. Our data shows that law firms that use cloud-based legal practice management software to manage their business are 60% more likely to have positive relationships with their clients than those that don’t.”
Alistair continued: “It’s no surprise that technology is becoming more commonplace within the legal sector. We use tech to enhance client experience, ensure that our administrative processes are efficient and cost-effective, and to maximise profitability. We work closely with Clio for our cloud-based case management and other suppliers to help with additional services, but we are exploring how we could adopt AI tools, such as ChatGPT, and how it could support legal work.”
Clio is transforming the legal experience for all by creating the world’s leading cloud-based technologies for law firms – to keep lawyers and their clients better connected throughout the legal process.
Access Clio’s Latest Insights and Tools
Make sure you’re staying ahead in the rapidly evolving legal landscape. Download Clio’s 2022 Legal Trends Report here and see how these trends carried into the following year by accessing the 2023 report here.
Contact us to see how Clio can ensure your firm is integrating the latest cloud-based technologies and is set up for long-term success.
For more information, please contact Olivia Prole or Isabelle Ellerington-Holden at Definition – [email protected].