Two Challenges Law Firms Will Face In 2024 (And What To Do About It)
We’re often encouraged to be reflective towards the end of the year. any law firm owners will spend the coming months pouring over every decision made within 2023, determining which worked in their favor (and which did not). While this can be a fruitful exercise, it’s also important that you’re able to look to the future.
That is, you need to look at the current legal landscape and predict the oncoming challenges to prepare your law firm and team for what may lie ahead. Doing this will enable you to update your contingency plan while also providing you with some peace of mind moving forward.
In this article, we’ll break down two of the biggest challenges that experts predict law firms will face in 2024 – providing you with practical guidance on how to tackle these issues.
Over the past year, AI technologies have exploded in popularity, prompted by the widespread availability of systems such as ChatGPT and GoogleBard. With new updates already announced for CHATGPT, promising to make the model more up-to-date, it’s clear it isn’t going anywhere any time soon. This has caused concern within many industries, including the legal sector.
For example, at first glance, using this software to summarize complicated casework or documentation may seem useful – especially in an industry where every minute counts. Lawyers will have more time on their hands to support clients and will be able to find access to information quickly and succinctly. However, this may not be so useful when put into practice. For example, “the data from which AI learns and on which it acts also inevitably includes the biases of the humans whose data is used.” This could, therefore, perpetuate biased outcomes in cases where AI is used.
There is also some concern that the growing investment into these technologies may render certain roles, positions, or industries unnecessary. Despite this, it’s important to remember that “AI does not replace human expertise and value,” meaning legal professionals need not worry about being “replaced.”
Of course, that’s not to say that AI cannot be used well within law firm operations. For example, it is best used as a tool for communication and can help lawyers draft emails to clients in a number of seconds. However, in order to respond to the challenges posed by AI, law firm owners should set strict guidance and restrictions on how it can be used within their practices and provide employees with training when necessary.
Budgeting and Finances
Many law firms throughout the country dealt with tumultuous finances in 2023. While this was partly caused by the shockwaves of the COVID-19 pandemic, “soaring inflation, client uncertainty, and volatility in the global economy continue to drive down demand for legal services.” As such, many firms should prepare for further budgetary constraints in the new year.
Of course, there are many steps that can be taken to combat this, as opposed to merely trying to corners as much as possible (or trying to use AI to replace your team). For example, law firm owners should find ways to prioritize their firm’s finances moving forward, such as by working to improve cash flow and collections rates or hiring an accountant.
At FinOp Group, we’re also on hand to support law firms looking to get a better handle on their finances during this trying time. To find out more about the range of financial services we offer, please do not hesitate to get in touch today!