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The Future of the Personal Injury Market: What’s Next for Law Firms

  • April 22, 2024

The current state of the personal injury market, while positive, is not one that will have most law firms jumping for joy. While 2022/23 saw small signs of growth – with IRN’s 2023 Personal Injury Market Report registering a revenue increase of 3.5% – this slow recovery hasn’t been felt equally across the sector.

Over the last 10 years the number of personal injury and clinical negligence claims has almost halved, and the number of personal injury (PI) law firms active in the market has been shrinking. Hardest hit has been the small, local law firms that once were found on every high street. It’s these smaller law firms that are still facing an uncertain future.

For larger PI law firms things look brighter. The drop in claim volume has been less damaging for those able to operate with economy of scale. Those that have been able to quickly implement new technology and digital solutions have prospered too.
But there are challenges ahead for larger law firms in the personal injury market as well. It’s important that in chasing efficiency and profitability, we don’t lose sight of the importance of consistency, good communication and understanding in achieving fair settlements for clients, especially in high volume, low value cases.

We may also see in future a shift towards US-style class action personal injury claims and even renewed interest from large US law firms in the UK personal injury market as a whole.

What This Means for Personal Injury Law Firms

These changes in the market are going to affect how personal injury law firms attract and retain the talent they need for the future.

New Opportunities to Attract Diverse Skill Sets

As smaller law firms struggle or close, legal professionals working for these law firms may find themselves displaced and seeking new employment opportunities. For candidates this is going to mean more competition for choice roles, but for employers this will provide new opportunities to attract high-calibre legal talent with hard-to-find skillsets, which could be attractive to those law firms seeking to broaden their expertise or enhance their service offerings.

Potential for Specialisation

As the number of claims on offer declines, specialisation could be the answer for those law firms unable to compete at volume. Some candidates from small law firms may specialise in niche areas within personal injury law, offering unique knowledge and experience that could be valuable to larger law firms looking to expand or diversify their practice areas. Equally those law firms with expertise in handling class action claims may have a competitive edge in attracting legal talent with specialised skills.

Increased Competition for Legal Talent

For the most part, we are going to be entering a legal recruitment market that favours employers, with more candidates available as smaller law firms shut down. However, this does mean that employers need to be more diligent in their recruitment processes to increase the chance of finding candidates that are a good culture match as well as a good skills match.

Larger law firms may have more resources for recruiting and retaining legal talent, offering stability, larger salaries and career growth opportunities but smaller law firms can compete by thinking outside the box with recruitment strategies and aiming to diversify their sourcing. UK law firms may also find themselves needing to compete with US law firms for legal talent, potentially leading to increased demand and competition for skilled professionals.

Need for Adaptability and Forward-Thinking

The personal injury market is undergoing changes, requiring law firms to adapt and anticipate future trends. Law firms that can demonstrate adaptability and a forward-thinking approach may be more attractive to legal talent seeking long-term career prospects. Law firms seeking to recruit top talent should highlight their technological capabilities and commitment to innovation. Top legal talent may also seek out law firms that prioritise both efficiency and client care and a positive work environment.

The UK personal injury market is in flux, impacting how law firms attract and retain talent going forward. As smaller law firms struggle, larger ones can seize opportunities however, as increased competition means thinking strategically about how you attract new talent and retain your existing team.

Clayton Legal has over 25 years’ experience helping clients attract and retain legal talent across practice areas that include Property, Personal Injury, Family, Criminal, and Costs law as well as Legal IT and Civil and Commercial Litigation.

If you are building your legal team, we can help. Call us on 01772 259 121 or email us here.

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