The Law Firms’ Survey: ‘Embracing Change to Succeed’ Report recently published by PwC holds valuable insights for leaders of legal firms around cutting costs, managing risks and the critical importance of technology adoption says Olly Thornton-Berry, Co-Founder at Thirdfort.
“Those firms that build on the work initiated in their immediate response [to Covid 19] and embrace the innovation displayed will outpace their competitors, gain the trust of their employees, and position themselves as firms that can look to the future with confidence.“
– Kate Wolstenholme, Leader of PwC’s Law Firms Advisory Group and editor of the Law Firms’ Survey
PwC’s recent Embracing Change to Succeed survey of the top 100 UK law firms is an absolutely fascinating insight into the current state of play for lawyers going into 2021.
As Co-Founder of Thirdfort, a technology business dedicated to making legal firms more efficient, resilient and secure we agree wholeheartedly with the report’s conclusion.
It really shines a light on many of the challenges that lawyers and legal firms face going forward in a post-pandemic world, and the importance of technology-led solutions. The report certainly emphasises the need for law firms to reduce costs and risk within their businesses. This makes a lot of sense in times like these when there may be less money around generally.
The fact that ‘improving use of technology’ is, by a long way, the highest priority for firms underlines the importance of embracing new digital tools in order to achieve these objectives.
I found it very interesting that 71% of firms stated that they were somewhat concerned or extremely concerned about cyber security. With fraudsters becoming ever more sophisticated in how they operate, we were pleased to see law firms prioritising business resilience and risk management.
The fact that 81% of law firms are concerned about meeting their financial ambitions going forward off the back of COVID shows the seismic effect this global phenomenon has had on how firms are doing business.
It raises an interesting challenge. You've got 81% of law firms concerned about meeting their financial ambitions going forward off the back of COVID leading to a necessary drive to cut costs. At the same time, you've got added risks from cyber crime.
The need to bring relevant technology has never been more urgent/timely and important.
Those firms that don't adopt technology are in real jeopardy of not being able to survive these challenges over the medium term.
In short, it's no longer a question of if firms should adopt a technology, it's a question of how they will survive if they don’t.
It’s of paramount importance that law firms look to partner with the right technology providers, urgently, across their businesses to help them reduce costs, and also reduce risks around cyber crime.
Client onboarding (ID verification and, for conveyancers, source of funds) takes law firms an estimated four to five hours.
Thirdfort aims to change this by providing a way to digitally onboard clients using our mobile app. The client can upload their ID to the app from the comfort of their own home, at their own convenience. Our technology then verifies that the document both matches the client in question, and is a genuine ID document. Then we provide lawyers with an efficient and secure way of checking client source of funds through Open Banking and an in-app questionnaire filled out by the client.
This massively reduces the amount of time that a lawyer takes, firstly, getting hold of that information, and then reviewing it. We give them a really simple report that actually gives them a pass or fail around that ID document, and whether that individual matches that ID document.
At the bank statement level, we directly access bank statements for the lawyer, run an analysis on that information and serve it up in a simple to understand and interpret report, which a lawyer can store on their system. We include our source of funds questionnaire in this report, so lawyers can easily see exactly where client funds are coming from and quickly identify any indicators of fraud to investigate further. It cuts so much of their admin out, in not only the traditional to-ing and fro-ing back and forth with their client, but also in actually reviewing all of those documents that are typically in disparate formats and stored all over the place.
Thirdfort simplifies and streamlines that client onboarding piece massively. And to address the concerns around cyber risk, using a secure, end-to-end encrypted platform such as Thirdfort to manage client data significantly reduces the risk of criminal interception that can occur when sending sensitive data via email, for example - further safeguarding both lawyers and clients from fraud.
“Consumers' expectations continue to rise around dealing with any service providers, and lawyers are no different.”
The report suggests that lawyers must improve their offering to clients if they are to survive the tougher economic climate of 2021 and Thirdfort can really help with that.
We believe that every individual, every client that interacts with a lawyer is looking for a solution to a particular problem. If you look at something like property, the consumer isn't too fussed about the intricacies of a search result or knowing the finer details around the letter of the law about that particular property. They ultimately just want to get into that house as quickly as possible, and they rely on their lawyer to help them navigate through that journey as simply and quickly as possible.
The consumer is looking for any kind of tools that helps them get from A to B, which means moving from where they're at now into their new property. And anything that, as I say, makes that process and that journey quicker, simpler and clearer for them to understand is hugely beneficial.
Consumers are increasingly expecting to be able to use technology for these kinds of transactions, especially as we now do so much of our day-to-day tasks on our smartphones. And the report really highlights this. Consumers' expectations continue to rise around dealing with any service providers, and lawyers are no different.
For clients, Thirdfort is a mobile phone app that feels as simple as something like Deliveroo or Starling to use. It’s designed to provide a smooth experience at the beginning of their interaction with the lawyer. This sets the client's expectation for the rest of the journey with their lawyer, thanks to the user friendly, quick and secure way that they have been onboarded.
My main takeaway is that now, more than ever, it's not a choice as to whether lawyers adopt technologies in their day-to-day operations. It is a necessity.
There's this overarching theme throughout the report that the drive to reduce costs, to reduce risk around cybersecurity can be delivered by technology. It came up again and again. And when you see profit margins of the top 25 law firms are being cut in some instances by 15% to 20%, then that is indicative of the need to bring in technological solutions that are going to streamline the day-to-day costs, but which are also going to reduce risk exposure.
Cyber risk isn’t just about protecting lawyers, but also clients who are increasingly exposed to risk of email interception, identity or money laundering fraud.
There are so many new risks out there and, at Thirdfort, we believe that the technology, as this report suggests, is there to play an even bigger role in mitigating these threats, and it's absolutely vital that lawyers take note of that.
Thirdfort is a remote client onboarding solution designed for law firms. Unlike most other AML products, we offer an app-based solution enabling clients to comprehensively verify their ID - as opposed to just authenticating an ID - and source of funds in minutes from their own home. Using Thirdfort can save law firms one hour of manual admin work per ID check.