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Global Study “Future Trends for Legal Services” Shows Fundamental Change in the Legal Profession
According to the findings of a new global study “Future Trends for Legal Services” the business market for legal services is undergoing a major change due to complex regulatory environments, increasing risk in many areas, the rise of the digital economy and ongoing pressure to reduce costs. The study reveals that the needs of companies are changing dramatically, with a majority of participants now considering a significant review of their legal services suppliers. While the demand for legal services is growing overall, there is a need for a new type of advisers that offer a broader set of services. Purchasers of legal services are looking particularly for suppliers who have a better understanding of their industry or business, can provide strategic advice on related non-legal areas, offer multi-disciplinary cross-border services and make better use of technology.
Andrei Burz-Pinzaru, partner at Reff & Associates, member of the Deloitte Legal network in Romania said: “Our clients are looking for broader solutions which go well beyond legal. Their issues are multi-dimensional and require advisers who deeply understands business dynamics and the impact legal decisions have on other areas of the business, particularly if they have operations in multiple jurisdictions. With the global footprint of Deloitte Legal, the well-established, multidisciplinary approach of Deloitte and our deep local legal expertise and experience in the Romanian market, we are well-positioned to meet the evolving needs of our clients”.
Piet Hein Meeter, Global Managing Director for Deloitte Legal added: “The legal profession is undergoing a massive transformation. We at Deloitte Legal see a clear need for a new type of service that combines legal advice with strategic advice across other disciplines. This is not currently provided by other law firms. Our clients want us to bring new solutions to the table, and that’s exactly the gap we want to fill. Our ambition is to become the law firm of the future.”
A growing market for legal services that go ‘beyond legal’
Overall, both demand and spend for legal services are growing. Particular areas are experiencing faster growth than others, including regulatory compliance (49%), M&A (42%) and litigation (39%). Global compliance is clearly one of the biggest challenges for in-house legal departments today, coupled with the necessity of “doing more with less”.
The majority (55%) of participants in the study (legal counsel, general counsel – or CEOs and CFOs) have taken or are considering a significant review of their legal suppliers. The research shows that, while expectations on services provided by external advisers are evolving, these expectations are not currently being met in a number of crucial areas, including the use of technology, transparency in pricing, and the level of integration of professional advisory services.
One in three legal services purchasers surveyed want their legal services provider to bring industry, commercial and non-legal expertise, which currently they do not. In addition to delivery of specific legal services, respondents said their legal services provider should contribute advice and expertise which goes beyond legal (33%) and more proactive knowledge sharing (18%). 52% said they would be happy to buy services from a non-traditional law firm.
Five future trends for legal services: the buyer’s wish list
1. Integrated cross-border advice beyond legal. A large majority of participants expressed the need for industry, commercial or non-legal expertise. They also want law firms to be more savvy on global data and cyber security protection issues and more pro-active in sharing knowledge across many jurisdictions.
2. Better and greater use of technology. The majority of participants said that technology had not replaced the tasks of in-house lawyers (77%) – yet. But over half (52%) said that this will happen over the next five years. Purchasers want better and more relevant technologies, to be used and shared on integrated platforms.
3. Regulatory and global compliance advice. Nearly half (49%) of all participants said that their department’s legal spend was growing in the area of regulatory compliance. In particular, global compliance is perceived as a major issue for in-house lawyers, with over a quarter (26%) saying it is the biggest challenge within their department.
4. Fixed fees, value pricing and greater transparency. A large majority of participants said they wanted greater certainty and transparency when it comes to billing, and frequently mentioned fixed or capped fees or value-based pricing.
5. Demand for alternative or non-traditional legal service providers. A majority (55%) of participants in the study have taken or are considering a significant review of their legal suppliers. More than half (52%) said they are willing to purchase legal services from a non-traditional law firm that offers a range of professional services.
The study was conducted by RSG Consulting and commissioned by Deloitte Legal. It comprises a quantitative web-based survey with 243 purchasers of legal services in-house, mainly occupying positions such as CEO, CFO, and General or Legal Counsel and took place between September 2015 and February 2016.