2024 Australia & New Zealand Legal Industry Forecast

In recent years, the legal landscape in Australia and New Zealand has undergone significant transformations, driven by advancements in legal technology and evolving client expectations. As legal professionals adapt to these changes, it is crucial to explore key trends and strategies that can enhance legal operations, streamline practice management, attract and retain top talent, and explore new revenue streams within legal services.

Revenue Generation and Cost Control  

In an era where cost control is paramount, legal spend management is a key focus for firms and legal departments. Thomson Reuters’ 2023 State of the Legal Market Report for Australia found that expenses alarmingly increased from 7% (FY22) to 14.3% (FY23). Breaking this down further, marketing and business development and knowledge management were the top sources for expenses, at 47.4% and 21.7% respectively.

To gain competitive advantage, organisations are diversifying their service offerings, exploring alternative fee structures, and adopting technology-enabled solutions, particularly those that not only streamline billing processes but also provide actionable insights into expenditure. By utilising spend management solutions, legal professionals can:

• Free up time and resources that would normally be spent on admin tasks like reviewing invoices, reporting expenses and chasing payments,
• Capture and manage competitive RFPs and multiple fee structures including fee estimates, fixed and capped fees,
• Formulate strategic plans and manage and optimise budget by referencing a single source of truth, and
• Maximise outside counsel and vendor value by benchmarking price and performance metrics.

By leveraging the vast amounts of data generated in delivering legal services, legal professionals can make data-driven decisions for driving profit, efficiently allocating resources, increasing productivity and enhancing client experience. 

Attracting and Retaining Talent: The Human Element

As the legal industry evolves, attracting and retaining top-tier talent becomes increasingly competitive.

In 2023, 71% of Australian law firms and 41% of corporate legal departments identified this as their top priority for the next 12 months. The (Tech & the Law 2023, Thomson Reuters) top challenges for talent retention are identified as:

• Breadth, complexity and volume of work, leading to exhaustion and burnout,
• Regulatory and political pressures, risk management,
• Under-resourced team, and
• Inefficient workflows, lack of legal technology and ineffective legal technology.

Interestingly, Thomson Reuters’ Tech & the Law 2022 report showed that almost one in three legal professionals were prepared to leave their firm for one that was more innovative. Law firms and legal departments can set themselves apart by exploring innovative approaches to accommodate flexible work arrangements, offering professional development opportunities and embracing technology that empowers legal professionals to do their best work.

Selecting the Right Technology: A Strategic Imperative

Efficient legal practice management is central to delivering quality legal services. The ANZ legal market is increasingly adopting cloud-based technology solutions that streamline case management, document collaboration, and workflow automation. Legal professionals are recognizing the value of integrated platforms that enhance collaboration among team members and improve client communication, leading to enhanced operational efficiency and client satisfaction. However, choosing the right legal technology is a critical decision that impacts the entire legal ecosystem.

Thomson Reuters’ 2022 report showed that 23% of legal departments had failed in a legal technology implementation project, where 53% said that choosing the wrong technology was the primary cause of failed implementation, followed by change management (33%) and budget constraints (22%).

Legal professionals are faced with a plethora of options, with an increasing number of legal tech vendors entering the market in recent years, each promising unique benefits. When selecting a technology platform or solution, organisations should ensure that they:

• Clearly define their objectives and goals, aligning it with the firm’s long-term strategy,
• Conduct a comprehensive assessment that addresses current and future needs,
• Engage key stakeholders in the decision-making process to gain stakeholder buy-in and increased user adoption,
• Consider the total cost of ownership, including the initial purchase or licensing costs, user training, and ongoing maintenance, support and potential future upgrades,
• Prioritise technologies with the highest standards of security and compliance, and
• Evaluate a vendor’s reputation and reliability, as well as its future development plans against the organisation’s long-term strategy.

Nevertheless, it is important to understand that technology solutions are not plug-and-play; each platform offers unique features that are designed to be tailored to your firm’s unique value proposition. Successful transformation begins with a clear understanding of organisational needs and a strategic approach to technology selection, so it is essential to conduct a thorough assessment of a platform’s long-term impact and its functionality, scalability, and compatibility with existing systems to ensure seamless integration.

Balancing Optimisation and Automation

Optimising current processes and workflows is crucial for law firms and corporate legal departments undergoing digital transformation. By not optimising current workflows and processes prior to adopting new technologies, organisations risk:

• Amplifying inefficiencies and bottlenecks by automating inefficient workflows,
• Overlooking improvement opportunities such as enhancing client experience,
• Creating "digital silos" where new technologies operate independently of existing workflows,
• Implementing technology on a foundation of inaccurate or inconsistent data, which will compromise the effectiveness of data analytics and AI tools, and
• Scope creep, budget overruns, delays in implementation and poor user adoption during digital transformation initiatives.

Optimized processes make organizations more agile and responsive to changes in the legal landscape. When workflows are efficient, it becomes easier to adapt to new technologies, regulatory changes, and evolving client expectations.

As the legal landscape in Australia and New Zealand undergoes a profound transformation, the imperative for the legal industry is clear: embrace change, adapt strategically, and chart a course for unparalleled excellence. This transcends mere adoption of technologies – it includes optimising your practice’s existing workflows and processes, cultivating a workplace that nurtures talent and placing client needs at the forefront of your organisation's transformation strategy.

“In the tapestry of legal evolution, strategic partnerships become invaluable. Jalubro brings deep expertise in navigating the intricate terrain of legal transformation, ensuring a smooth and successful transition,” stated Arran Braganza, CEO of Jalubro Consulting.

Author Nicole Catabran.

About Jalubro

Jalubro is a leading provider in digital transformation, offering a comprehensive range of digital services and technology solutions aimed at legal departments and law firms worldwide.

Established in 2015 and headquartered in London, Jalubro's core mission is to assist legal teams in adopting digital strategies to improve the efficiency, speed, and cost-effectiveness of legal services through technology utilisation. With a strong presence in EMEA, the US and Asia, and now with boots on the ground in Australia, Jalubro partners with leading tech vendors like Thomson Reuters.

The company is distinguished by its team of experienced lawyers, technologists, and transformation experts, who are recognized for their expertise in crafting and implementing practical solutions to meet every day operational challenges in the legal sector.