Small law firms held back by “operational drag” in back office


Ramzan: Client expectations around speed were growing challenge

Inefficient back offices are restricting growth at many small law firms and putting client relationships at risk, according to new research.

At a time when firms around the UK are growing – with almost two-thirds reporting an increase in revenue since 2023, and one in four expecting to grow by more than 10% in 2026 – the “operational drag” in many back offices was putting pressure on growth rates.

After hearing from 568 legal professionals across England and Wales in February this year for the 2026 by LexisNexis Bellwether Report, Lean, focused, profitable, researchers concluded: “Small law firms are going to great lengths to ensure a smooth, sophisticated client experience, even if it leaves them sweating.

“Yet the back-office reality is, most have capacity issues, margin pressure, or inefficient workflows that aren’t sustainable over time.”

Lawyers at small firms were described as more confident serving their clients well than “running lean, modern, and resilient businesses.”

More than half of the firms said completing routine administration work was the biggest issue they faced behind the scenes, with 52% describing billing, document management, client communications and research support as “a blocker”.

Forty per cent of the firms admitted to being held back by slow case management work, while just under a third said drafting and reviewing documents was a major issue.

Highlighting the frustration caused by this “operational drag”, the report observed: “Firms appear to believe that too much time is still being absorbed by back-office process, matter handling and document work.”

Issues with drafting and reviewing documents were more common in firms which specialised in commercial and corporate, litigation and personal injury work.

The data showed that most clients remained happy with the service they were receiving from their lawyers, but firms were struggling with growing demand for faster turnarounds.

The research found that 84% of clients rated their experience as good or excellent.

But as speed of delivery became more important to clients, operational problems were expected to put client relationships under threat.

Sophia Ramzan, a partner and head of residential conveyancing at Bristol firm Watkins Solicitors, told researchers that client expectations around speed were a growing challenge, and firms had to grow at a pace they could manage, without cutting corners.

“We’re focusing on tightening processes, using systems better, and making sure the team is properly supported so we can keep delivering consistently,” she said. “It’s about doing things properly and building trust so clients come back and refer others.”

The research looks at growth and what success looks like for small and mid-sized firms.

The report said: “Firms make most of their money from higher-value legal work, especially disputes and private client matters, but their ability to convert that into growth is being constrained by inefficient delivery models.

“It’s little wonder that firms are planning to invest more in technology, AI, standardisation of documents, and profitability tracking.”

Some of firms’ largest investments were upgrading back-office operations, with 30% saying they were investing in standardising documents and workflows, and one in five investing more in client experience and responsiveness.

Kate Bennett, the founding partner at London firm Arbor Law, said: “Clients are no longer simply buying legal advice; they are buying judgement, commercial alignment, speed and demonstrable outcomes.”

Ms Bennett said firms needed to understand how their clients measured performance – such as through value, strategic impact or efficiency – and design their delivery models around those measurements.

More than 40% of firms showed “strong interest” in using AI more for research, drafting and review, and standardising their documents and workflows.

The report concluded: “The next phase of success will not come from radical reinvention. It will come from sharper execution.

“Firms that standardise workflows, use technology intelligently, track profitability more closely and make better commercial decisions will be best placed to grow without adding unnecessary complexity.”

Report editor Dylan Brown added: “The data shows that client service is not the problem. Firms are confident in the relationships they have built and the quality of advice they provide. The bigger issue is whether they can deliver that work consistently, profitably and without adding unnecessary strain.

“The firms best placed to grow will be those that protect what makes them valuable to clients, while becoming leaner, more focused and more disciplined in how work gets done.”




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