Here’s the introduction to the piece which essentially says with US firms, China firms, Brexit and the shrinking market UK firms have to be the ones of the cutting edge of AI if they want to survive and prosper in the international legal market
Here’s what Forbes say……
As profit margins fall at U.K. law firms amid market challenges, that global digital transformation challenge is looming large. Artificial Intelligence, or AI, is on everyone’s lips as an essential part of that transformation. Entrenched attitudes are holding people back however, and the legal sector is the latest one in the U.K. looking at the writing on the wall.
In 2016 75% of the Top 100 law firms in the U.K. reported revenue growth, down from 82% in 2015, according to PwC’s 25th annual Law Firms Survey, out today.”Overall financial performance in the sector has been flat due to increased headcount and salary costs against a drop in chargeable hours and hourly rates. The top 50 firms have increased fee earner headcount by 7.6% on average and return on this investment is yet to yield significant revenue growth,” it says.
Law firms increased their headcount as confidence returned to the sector last year, said David Snell, partner and leader of PwC’s Law Firms Advisory Group. “However, with the market turning out to be more challenging than expected and with increased competition from U.S. firms and new entrants, spare capacity is now an issue for firms. This situation is likely to be exacerbated following the EU Referendum vote in favor of Brexit. Profit per equity partner and rate per hour are under pressure in a sector where supply outweighs demand.”
U.K. law firms have been particularly successful in expanding on an international scale to meet client need, according to the PwC analysis. But “the challenge for U.K. top tier firms to match U.S. performance in terms of fee income and profit growth continues. While this growth has been flat for the U.K., rates of 2.9% and 3.2% respectively, have been reported for U.S. counterparts,” it says.
One answer? Better use of technology – and Artificial Intelligence.
“One issue law firms can’t ignore is the need to invest heavily in technology, both to replace old systems and invest in emerging technologies such as Artificial Intelligence (AI). The successful firms of the future are likely to provide global services supported by virtual collaboration and widespread use of AI” said Mr Snell.
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