Chief Financial Officers in law firms have never been under more pressure. Clients demand greater value, competition is intensifying, and emerging technologies are rewriting how work gets done. The result? Profit margins are being squeezed, compelling CFOs to steer their firms through complex financial decisions to remain both competitive and profitable.
Modern CFOs in law firms do more than just manage budgets; they set the strategic tone for innovation and growth and are often responsible for:
- Investment decisions: Identifying tech solutions with tangible ROI, aligning them with fee earners’ core revenue-driving activities.
- Operational efficiency: Partnering with IT and operations to transform inefficiencies that eat into margins.
- Risk management: Prioritising cybersecurity and compliance to minimise exposure and protect brand reputation.
- Scalable growth: Whether through mergers, acquisitions, or new practice areas, CFOs ensure the firm’s financial models and IT infrastructure can handle evolving business demands.
Rising Pressures for CFOs
As CFOs play a broader role in the business, they become instrumental in addressing critical issues. Many are currently grappling with four challenges that threaten their profitability: evolving client demands and pricing models, escalating cybersecurity and compliance risks, intensifying competition for talent and a rapid rise of advanced technologies. Each challenge demands a strategic response from CFOs, who must find an equilibrium between operational investments, margins, and the firm’s reputation.
1. Changing pricing models
As services become more commercialised, fixed-fee and alternative pricing structures have become commonplace, compelling law firms to find more efficient ways of delivering services to maintain their margins. Clients now demand greater efficiency, transparency and value from their legal advisors, which is proving challenging for firms operating labour-intensive timesheets and logs.
2. Escalating cybersecurity & compliance risks
The rapid rise in cyber threats—evidenced by a 36% spike in reported breaches in 2022/2023—underscores the need for robust security in the legal sector. Last year, Cert-UK, the forerunner to the National Cyber Security Centre, published a report into the UK law firms, which makes sobering reading. 65% of firms have been a victim of a cyber incident, but despite the need to protect themselves, 35% of firms still do not have a cyber mitigation plan in place.
As recently as 2021, a city law firm reported that they had lost client data as a result of a cyber attack. The market reacted swiftly, wiping off almost 8% of its share value within an hour of the statement. Given that a single data breach or compliance lapse can inflict serious financial and reputational damage, CFOs must allocate resources to develop and support solid cybersecurity protocols or face the far greater expense of a security failure.
3. Advancing technology & talent retention
To address these challenges, tools such as generative AI, automated workflows and predictive analytics are becoming standard in many legal practices. Technology can significantly boost productivity, automating up to 44% of labour-intensive tasks in law firms, enabling fee earners to concentrate on higher-value client work and personal development. However, the scale of projects and flood of vendors offering a multitude of services can be overwhelming.
As such, CFOs face a significant challenge – if their firms fail to keep pace with the market, they will be at a growing disadvantage—both in day-to-day efficiency and in attracting high-performing lawyers—affecting their long-term stability. CFOs need to balance investment in technology with a clear return on investment (ROI), ensuring new solutions genuinely boost profitability, deliver a competitive edge and raise overall productivity.
A remedy for the pain….
Law firms can no longer afford to cling to outdated methods of operation. For CFOs, success hinges on making smart, targeted investments in technology and operations that multiply impact across the firm. The right IT partner can be the linchpin that unifies data security, efficiency, and productivity—ultimately enhancing the bottom line.
Technology providers such as OneAdvanced, specialise in the legal sector and understand the unique workflows, compliance requirements, and billing intricacies law firms face. With decades of experience in legal-sector IT, our solutions are tailor-made for today’s law firms, with a modern, flexible platform that promises:
- Less downtime
Proactive support can slash issue-resolution times by up to 20%. Fee earners log more billable hours, and clients receive faster, more reliable service. With 24/7 IT availability, OneAdvanced minimises disruption to your entire workforce. - Optimised costs
Our cloud solution can cut annual Azure expenses by up to 30%, releasing budget for strategic hires or investments that directly impact profitability. - Maximised productivity
Intelligent automation tools and integrated knowledge management empowers lawyers to access crucial data swiftly, boosting both the quantity and quality of billable work. - Improved security
Bolstered by robust cybersecurity, firms protect sensitive client data and sidestep the crippling costs of a breach. Strong defences also engender client trust.
Partnering with OneAdvanced gives CFOs the confidence to lead from the front, shaping a law firm that’s both profitable and future-ready. If your firm is ready to future-proof operations, we offer the strategic partnership you need. Contact us today to discover how our tailored solutions can support your business.