Five challenges for the legal sector in 2025

In recent years, firms have had to respond to significant changes in the legal industry, from economic challenges to changing client expectations. The legal landscape will continue to shift in 2025.

Let’s take a look at five areas to consider this year, the impact they could have – and how firms can tackle them.

1. Economic pressures and opportunities

With uncertainty around interest rates and inflation, the challenges the UK economy faces make clients even more price-conscious when choosing a law firm.

Stringent checks for anti-money laundering (AML) and source of funds are also needed, along with greater cyber security and verifications for online activity as IT professionals are wary of increased risks of cyber attacks. In 2024, cyber attacks on law firms jumped by 77%. Our blog on cyber threats highlights how firms can help mitigate the risk of cyberattacks.

There are also opportunities for law firms, among the economic pressures. The need to work more efficiently means firms can look at current processes to see where they can streamline or automate tasks.

Integrating a case management system with other internal areas – such as legal accounting, online payments and website quotation tools – can provide value to firms and the end client. This can be alongside external third-party systems, such as government portals or identity verification services.

Moving to a hosted environment can provide security benefits as well as performance improvements. Our blog on the hosting options for legal practice management software covers the options available.

2. The rise of AI in legal services

Artificial intelligence (AI) is set to transform the legal industry even further in 2025, improving efficiency and client service.

AI tools are automating routine tasks like document drafting and case summarisation, allowing firms to deliver faster and more accurate services. As AI adoption grows, so do the challenges. Law firms must use AI responsibly, protecting sensitive client data from potential breaches.

The technology is also enhancing client interactions through chatbots, predictive analytics and AI-powered legal assistants – improving communication and service delivery. While AI can automate tasks, it can’t replace the human judgment and empathy that clients rely on. In 2025, law firms should focus on leveraging AI to enhance their practice without losing the human touch.

For more insights on AI in law firms, check out our AI in the legal sector resource hub.

3. Integrating legal software

Integrating software and systems is increasingly important as firms strive for greater profitability while improving client service and experience.

Many firms have multiple systems that don’t share data, which can lead to inefficiencies and problems. These can range from manual data entry and poor data quality, to issues with cyber security and reduced automation.

To operate efficiently, firms can encourage more collaborative working between teams and their systems. You can integrate legal accounts, customer relationship management (CRM), human resources (HR), case management and other areas. This will create a digital ecosystem that can better manage workload and client engagements.

Find out more in our article on fully integrated software.

4. Building a positive remote culture

Talent attraction and retention in the legal sector will remain a significant challenge in 2025. Cost-of-living pressures continue to play a role, but remote working will be a factor too.

There are many benefits to remote working, including more flexibility, a better work-life balance for staff, reduced office overheads and attracting wider talent pool. But it can create challenges, especially when it comes to building a positive culture and keeping staff engaged.

Being at home, often alone, means some people lose a sense of community, which makes working collaboratively with colleagues more difficult. Some may even start to feel isolated, which can have a negative impact on wellbeing.

There are opportunities for firms to enhance their culture, and foster a positive and productive remote working environment. Communication within the firm, both internally and to clients, will help to establish clear ways of working.

Technology can also be used to support staff to work remotely with ease and security. Providing laptops, monitors and other equipment along with software to assist communication, productivity and security is key to success. Solutions such as browser-based or cloud-hosted case management can be hugely valuable.

Watch our panel discussion on how to attract and retain the best talent while building a positive culture, and see industry experts provide tips and case studies to support your firm.

5. Driving new business

A continuing challenge for law firms is how to drive new business and be more competitive. With clients’ sensitivity to price and more legal services available online, competition in the sector is growing and it’s difficult for firms to stand out.

It’s not always sustainable or appropriate to cut prices and be the cheapest, so firms need to consider other ways to differentiate themselves. As solicitors aren’t usually trained in sales or marketing, they may lack the skills required to engage prospects and follow up with potential opportunities.

Quick wins include using an automated online quotation tool that allows prospects to receive an estimate while firms capture contact information to follow-up.

Integrating the quotation tool with a case management system means details can be passed directly into a case file, saving time, improving accuracy and making it easier to move things forward.
Other useful activities include attending local community events to network and build the firm’s profile, using marketing initiatives – such as social media and email – and collating positive feedback from existing clients to show the value your firm provides.

Explore our article on seven tips to market your firm, which provides advice to support your business development.