Small law firms and solo practitioners face a rapidly different environment than they did a decade ago. The legal industry is undergoing significant transformation, driven by technological advancements, changing client expectations, and increasing regulatory demands. In this blog, we will explore the top challenges that leaders in small law firms and solo practices will encounter in 2025 and provide actionable insights to navigate these hurdles effectively.
One of the foremost challenges for small law firms is attracting and retaining skilled lawyers. According to recent ÀÏ˾»úÎçÒ¹¸£Àû research, 50% of small law firms identified this as a major concern. The competition for top talent is fierce, and smaller firms often struggle to match the salaries and benefits offered by larger firms. To overcome this, small firms need to focus on creating a supportive work environment, offering flexible working arrangements, and providing opportunities for professional growth.
Jodie Hill, Managing Partner at Thrive Law, emphasies the importance of engagement: "We’ve asked our teams how they think AI fits in with, or helps with, their roles. We’ve got them involved at all different levels so it created engagement from an early stage."
Keeping pace with new technology is another significant challenge, with 39% of small law firms highlighting this issue. The adoption of legal AI is transforming legal work, with 82% of lawyers at small firms currently using or planning to use AI tools. AI offers the potential for increased efficiency and faster service delivery, but it also requires investment in training and infrastructure.
Dr. Katy Peters from the University of Surrey advises, "Think of AI as another tool which can complement your legal skills." Embracing AI can streamline operations, but firms must ensure they have the necessary skills and resources to leverage this technology effectively.
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The continuing demands of compliance regulations are a concern for 37% of firms. As regulations become more complex, small firms must stay informed and ensure they meet all legal requirements. This involves dedicating time and resources to compliance training and staying updated on regulatory changes.
One law firm partner notes, "AI can consider every document on an electronic file and compile information on any question you ask." Leveraging AI and legal tech for compliance tasks can help firms manage these demands more efficiently.
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Attracting and retaining clients is a challenge for 39% of small law firms and solo practitioners. Clients now expect faster, more efficient service and greater transparency in pricing. The shift towards AI-driven efficiency is prompting many firms to reconsider their pricing models, with 39% expecting to adjust their billing practices due to AI.
Mark Smith, Director of Strategic Markets at ÀÏ˾»úÎçÒ¹¸£Àû, highlights the shift towards value-based billing: "AI will push the legal industry towards value-based billing models as routine tasks become automated, reducing the time needed to complete them."
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Cybersecurity remains a critical concern, with 39% of small law firms identifying it as a challenge. As firms increasingly rely on digital tools and platforms, the risk of data breaches and cyberattacks grows. Implementing robust cybersecurity measures and ensuring staff are trained in data protection practices is essential.
Stuart Greenhill, Senior Director of Segments at ÀÏ˾»úÎçÒ¹¸£Àû, stresses the importance of responsible AI use: "Everything we do considers the real-world impact of the solution. Lexis+ AI proactively prevents the creation or reinforcement of bias, we ensure that we can always explain how and why our systems work in the way they do, human oversight is built in and we respect and champion privacy and data governance in all that we do."
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