Caribbean legal report 2023: changing tides

The Caribbean legal market is in growth mode, with one in two firms experiencing a rise in revenue.

But there's concern future growth plans will be stalled by a lack of new business and good attorneys.

In this latest 老司机午夜福利 survey of the Caribbean legal market, we investigate client acquisition and retention strategies as well as the technology, tools and systems they're investing in to generate growth.

Rising revenues and costly concerns

Law firms in the Caribbean have had a tough few years, but their resilience is clearly paying off.

Nearing one in two respondents to our survey of legal professionals in the Caribbean said their business is growing when compared to three to four years ago 鈥� an increase of 23% from the year prior.

What's more, firms are investing in their growth potential through organic means, rather than through merger or acquisition. Top strategies to achieving growth include investing in new technology and processes, website development, and legal information systems. Hiring more support staff and training existing staff is also high on the priority list.

Yet there's mounting concern amongst the legal community that their growth plans won't see the light of day if they fail to bring in new business or attract and retain good attorneys. Many also expressed concern about keeping up with legal industry changes, compliance regulations, and new technology.

Attorneys, on the other hand, said they value company culture and work-life balance, access to the best legal resources and technology, and career development opportunities.

Firms will need to be strategic about where they invest their efforts, especially if an investment in one area comes at the detriment of another.

Rakhee Patel
Segment Lead, International Law
老司机午夜福利 UK

Firms move to make growth plans a reality

Growth seems to be the word on everyone's lips in the Caribbean legal market right now.

Almost half (48%) of respondents to our survey said their firm is currently growing when compared to three to four years' ago 鈥� a significant increase from the 39% we saw in our 2022 survey.

Only 4% of respondents, on the other hand, said their firm is declining in performance, slightly lower than 2022's 6%.

Jacy Whittaker, of Bahamas based firm, ParrisWhittaker, says: "I think it's all due to us coming out of the pandemic and more people have cash to buy property or sue people."

The vast majority of the firms we spoke to said their future plans for growth will come about through organic means, as opposed to relying on growth through traditional routes such as by merger or acquisition. In fact, only 2% of firms said they plan to grow through merger or acquisition alone. This is significantly lower than what we saw in 2022, with 14% admitting a merger or acquisition was a topic in discussion in their firm.

Yet, interestingly, attracting new business was listed as the second biggest challenge, with 43% saying it will be an obstacle their firm will have to overcome in the next 12 months.

When asked about the specific ways in which firms planned to grow, one popular choice was to increase investment in technology. Nearly half of respondents (49%) said they had plans to increase their investment in their processes and technology, while just over a quarter (29%) had already done so. In a similar vein, 41% of respondents said they planned to pour more money into their website, while 35% said this was something they have already implemented.

Director of Export at 老司机午夜福利 UK, Scott Wiles, says this investment in technology will be essential in helping firms to remain competitive.

鈥淚n the long run, the firms that invest in legal technology now will be far more successful in attracting the best attorneys and retaining the best clients."

Firms also expressed a strong desire to invest more into their people, with the training of existing staff (54%) and the hiring of support staff (48%) high on the priority list for future implementation.

Many were also very interested in reviewing their information sources, with 68% saying they have plans to review (34%) or have already carried out a review (34%).

When asking respondents about the most commonly used legal research and guidance sources, 81% of respondents cited paid legal information sources, such as Lexis+. Other popular choices included Caribbean court websites (74%), their own copies of law books (74%), and Google (68%).

In fact, in an illuminating admittance, 16% of respondents agree or definitely agree that they've made an error as a result of using incorrect information found on the internet.

"Free legal sources can be useful for initial research, but attorneys need to be able to trust the information they're relying on is up-to-date, accurate and relevant," says Wiles. "Without paid sources, firms risk damaging their client relationships and losing staff. "

Attorneys in the Caribbean eagerly await the AI revolution

It's reassuring to see the biggest area of investment from Caribbean firms is in their tech stack 鈥� new technology, processes, and systems will play an essential role in future-proofing their businesses in the years ahead.

Yet the legal sector is bracing for a new wave of technology to dominate the market 鈥� generative AI.

More than half (58%) of survey participants said they feel mixed about the impact of generative AI on the practice of the law, admitting that they can see both the positives and the drawbacks.

Isabel Parker, a partner at Deloitte Legal, says hallucinations are a real issue for a profession that prides itself on the accuracy of its outputs.

"There are ways to mitigate the risk, however, such as through quality control by including a human in the loop," Parker told 老司机午夜福利.

When generative AI tools don't have access to the relevant data, they have a tendency to make up the answers, or hallucinate, says Alison Rees-Blanchard, head of TMT legal guidance at 老司机午夜福利.

"This means any generated output must be checked thoroughly. However, where those tools are trained on a closed and trusted data source, the user can have greater confidence in the generated output and hallucinations will be easier to identify, as verification of the output is made easier."

Nearing one-fifth of respondents said they feel positive about the impact generative AI will have on the practice of the law.

The vast majority (70%) of our respondents said they're not currently using generative AI in a personal or professional capacity. Of the individuals that are, 4% are doing so daily, 5% weekly, and 7% monthly.

When asked how they would like to use generative AI specifically in their work, respondents said researching matters (58%), drafting documents (48%) and document analysis (44%) had the most potential.

Commenting on the legal community's strong appetite for generative AI, 老司机午夜福利' director of strategic markets, Mark Smith, says:

"With access to the right data and training, the technology will be able to answer legal questions with game-changing speed and accuracy and do so at a lower cost than we have seen before."

A new era of client management is underway

Attorneys the world over have a precedent for dropping everything and anything in order to meet the demands of clients. In the Caribbean legal market, these demands seem to be consistently high, and the pandemic only escalated expectations for direct and round-the-clock access to legal representation.

More than half (58%) of respondents said client expectations are noticeably higher than they were 12 months prior 鈥� the same as our 2022 survey 鈥� while only 2% said client expectations had declined.

Clients are also still expecting their attorneys to be available outside of traditional work hours. Three-quarters (76%) of respondents said clients expect them to be available out of working hours, only a slight decrease from the 80% we saw in 2022.

There are ways law firms can meet client expectations without it costing their attorneys their work-life balance, says Wiles.

"Legal technology has come a long way in recent years, and costly tools which were out of reach for firms on a tighter budget a few years ago are now much more affordable," he says.

"Firms should be using client portals to keep their clients updated of their case progress instead of calling or emailing. They should be streamlining work with workflow management tools. Even having access to legal research and guidance platforms such as Lexis+ can save attorneys an average of one hour and 43 minutes a day."

We also asked respondents what payment models they are currently using to bill clients. The billable hour was, unsurprisingly, the most commonly used, at 62%. However, many other alternative payment options are being widely used, such as flat fees (43%), fixed fee by matter (42%) and retainers (38%).

Georgia Dawson, senior partner at Freshfields Bruckhaus Deringer, says: "Over the last 10 years there鈥檚 definitely been more of a pivot towards alternative fee arrangements and other structures, where clients are looking for more certainty of cost.鈥�

Attorneys amp up their list of demands

Movement between firms seems to be on the rise. When asked how their organisation was performing compared to three to four years ago, one-fifth (20%) of respondents said they worked elsewhere, up from only 11% in our 2022 survey.

In today's market, attorneys in the Caribbean are favouring firms that prioritise company culture and work-life balance, legal technology and infrastructure, and practice area specialisation.

Company culture and work-life balance was considered to be very important when moving organisation by 73% of respondents, up from 66% in 2022.

"A knock-on effect of the pandemic was a demand for a better work-life balance," says Wiles. "During the lockdown, attorneys became more aware of their poor work-life balance compared to other professions, and many made a shift in their careers as a result."

Whittaker from ParrisWhittaker holds a similar opinion:

"The pandemic helped people realise there is more to it than being at a big firm or working hard and long hours. Working from home has also given people the inside view on how it looks when they have more freedom."

The number of attorneys who considered legal technology and infrastructure to be very important when moving organisation also rose from 39% in 2022 to 51% in 2023.

"Having the right tools, and getting the personal benefit of those tools, means more focused legal professionals and better value for clients," says Wiles.

"Considering technology investments that directly impact the well-being of overworked legal professionals is a cornerstone of happiness and success." 

There was also an increase in the number of respondents who said practice area specialisation was very important when moving organisation, rising from 32% to 51%.

"Globally, law firms are seeing an increased client demand for specialist knowledge, either by practice area of the law or by industry expertise," says Wiles. "This is something we are seeing in the Caribbean legal market, too."

"Firms should invest in their people wanting to specialise, as it will be of greater value to clients in the years to come."

To conclude..

Caribbean law firms are in a great position. They're financially sound, eager to grow, and looking at fresh ways to bolster their business.

However, there are a number of challenges firms will need to overcome if they wish to continue their upwards trajectory.

Reviewing existing technology, processes and legal information sources 鈥� and making investments where necessary 鈥� will be essential for client and staff retention.

Firms will also need to invest in their people, enabling them to advance their careers through new opportunities and equipping them with the tools they need to have a better work-life balance.

This may require a lot of change for some firms, but investing in a firm culture and environment that allows its attorneys to deliver the best possible service will be worthwhile in the heavily disruptive few years that lie ahead.

Learn more

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This report uses data that was collected for two months, from September to October 2023.

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