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Tower Street Finance

Law firms resting on their laurels spells trouble ahead

Law firms resting on their laurels spells trouble ahead

  • Post published:28th May 2021

It’s no secret the legal sector is resistant to change but if the experience in the US is anything to go by UK firms will have to innovate and improve their customer experience to survive. Richard Davies, director at Tower Street Finance, explains how it can help.

A leading figure in the legal world has criticised solicitors’ attitudes towards innovation and technology in the sector saying firms ‘move only as quickly as necessary not to fall behind, and if it doesn’t seem broken there’s no need to fix it’.

Sir Nigel Knowles, CEO of DWF, acknowledged there are some great examples of innovation and disruption across the legal sector, but concluded that it hasn’t embraced change at the same speed as other industries because the old ways of working are still viewed as successful.

But it’s a situation that can’t go on indefinitely, and the pandemic has only turbo-charged the need for change with emerging technologies becoming more prevalent and disruptive than ever before.

For those law firms that stretch out of their comfort zone to improve efficiency, reduce cost and improve customer service, it’s a positive evolution.

But it remains far from the majority that are willing, and able, to go on that journey and in the end, it will be to their detriment.

The UK legal sector is lagging behind its contemporaries in the US, Canada and Australia. The new world is embracing alternative legal services providers – niche companies that specialise in providing high-demand services such as contract management and document review using technology and automation to improve process and reduce costs – and they are reaping the benefits, it’s a $14bn industry growing at 15 per cent a year.

As a relatively new financial partner for the legal sector we’ve spent time working with businesses that are innovators with the common objective of making lawyers’ and their clients’ journeys through legal process easier.

In the probate sector, where we currently operate, there are many emerging services that help firms and their clients navigate the process more quickly and efficiently. From online probate apps, estate finders, one-stop-shops for death notifications, bespoke financial products and automated forms.

But we, like Sir Nigel Knowles, are still finding a resistance to change.

And we do understand: if any sector has been turned on its head by technology and automation over the last twenty years it’s financial services.

People don’t have to go into a bank to set up an account, make a payment, ask for an overdraft, or agree a mortgage any more, they can do it on their phone – their identity is verified electronically and seamlessly and they can even pay in a cheque using an app.

How different to the experience of legal service users where the process is often paper-based, onerous and time consuming. And how long before service users demand something better, which will be provided by a forward-thinking disruptor that delivers profits while the older firms count their losses.

We’ve seen it in our dealings with legal firms – our three probate products, Inheritance Advance, Inheritance Tax Loan and our Inheritance Dispute Funding – all require an agreement between Tower Street Finance and the legal firm so we work together for the benefit of the client.

In one case, where the solicitor had actually referred a client to us to access some of their inheritance early, they subsequently refused to work with us – instead replying with ‘unfortunately we can’t sign an agreement with you because to put it bluntly there’s nothing in it for us’.

That’s exactly the sort of attitude that has Sir Knowles sounding the alarm bells about complacency in the legal sector. Surely improved customer service is one major reason?

We know from our research that clients expect their solicitors to know about products that can help speed up, or simplify the probate process; it also told us that 5 in 10 people expect their solicitor to let them know about products which can help them access their inheritance sooner. We also know that four in ten bereaved people have reported a decline in mental health because of the stress of being involved in administering a death.

At a time when cost reduction and cashflow challenges are front of mind it makes sense for law firms to explore innovative options that will improve customer service and cashflow – it doesn’t make sense to say ‘there’s nothing in it for us’.

Being open to new services not only helps your clients and your reputation but it will also positively impact the bottom line.

For more information about working with Tower Street Finance visit www.towerstreetfinance.co.uk or call us on 0343 504 7100.