Top Challenges for Small Law Firms and Solo Practitioners in 2025: A Strategic Overview

Recent LexisNexis research reveals the critical challenges facing small law firms as they navigate an increasingly complex legal landscape. Here’s what industry leaders are focusing on:

Talent Management Crisis

With 50% of small law firms struggling to attract and retain skilled lawyers, the competition for talent has reached a critical point. Jodie Hill, Managing Partner at Thrive Law, emphasizes engagement as key: “We’ve asked our teams how they think AI fits in with, or helps with, their roles. We’ve got them involved at all different levels so it created engagement from an early stage.”

Technology Adoption and AI Integration

39% of small firms identify keeping pace with technology as a major challenge. With 82% of lawyers at small firms either using or planning to use AI tools, the pressure to adapt is significant. Dr. Katy Peters from the University of Surrey advises viewing “AI as another tool which can complement your legal skills.”

Client Expectations and Pricing Evolution

Client retention remains a critical concern for 39% of firms. Mark Smith, Director of Strategic Markets at LexisNexis, notes that “AI will push the legal industry towards value-based billing models as routine tasks become automated.”

Compliance and Cybersecurity

37% of firms struggle with regulatory compliance demands, while 39% identify cybersecurity as a major concern. Stuart Greenhill, Senior Director at LexisNexis, emphasizes responsible AI use and data governance as crucial elements of modern practice.

The path forward requires firms to balance technological advancement with professional integrity, while maintaining focus on talent development and client service. Those who successfully navigate these challenges will find themselves well-positioned in the evolving legal landscape of 2025.