Law firm investment in technology may be trending slightly downwards, according to the new 2019 legal tech report that was released last week by HSBC UK and produced with The Lawyer Magazine.

Comprised of responses from partners and other senior business leaders inside 50 U.K.-based firms, the report found 81% of respondents identified technology as the item that is the most strategically important to their firm.

However, the 2019 report also showed a decline in the amount of revenue firms were investing in technology. In 2017, 75% of firms indicated that they would spend 5% of their revenue or more on tech. That number dropped to 44% in 2018 and declined again to 27% in 2019.

Chloe Clift, head of professional services in commercial banking for HSBC UK, indicated that a variety of factors could be at a play, from uncertainty over Brexit to an abundance of caution over large-scale tech investments.

"[Law firms have] spent a lot of money on new technology over the last three or four years," Clift said. "Possibly cyclical spending has driven the reduction in percent of turnover spent on technology"

However, Beau Mersereau, innovation leader at the firm of Fish & Richardson, said most of the people he's spoken with feel that firms are investing in technology at close to the same levels as they have in the past.

One thing that may have changed is how those expenditures are categorized. Mersereau noted a change in recent years that has seen legal tech products transition from a one-time purchase to a recurring, subscription-based model, such as a cloud service.

Tech's transition from a capital expenditure to an operational expense may be causing some confusion at firms. "I think that their money has shifted into operational expenses. They think they are spending more, but in reality they might not actually be," Mersereau said.

Meanwhile, revenue that is continuing to be invested in tech may be headed in different directions than in years past, with cybersecurity potentially taking a backseat to solutions that improve the client experience.

According to the survey, 44% of respondents are prioritizing client collaboration tools when it comes to their investment in technology, placing those solutions well ahead of other staples like cybersecurity (15%) and automated document production (13%).

Conversely, figures from the 2018 report show that 84% of respondents selected cybersecurity as the top priority for technology investment, followed closely by client collaboration tools at 79% and automated document production at 74%.

Clift attributed the change to an increasingly fragmented and highly competitive legal marketplace, which has made client trust a key metric for law firms.

"You need to be at the forefront of client collaboration to make sure that you are remaining as competitive as you can be and maintaining those relationships," Clift said. She gave the example of firms deploying solutions that help to increase pricing predictability and transparency.

Mersereau said Fish & Richardson began investing in those kinds of tools after the last economic downturn. "We had to because we started offering alternative fee agreements, for example, in our litigation practice," Mersereau said.

Still, there may only be so much tech can do with regards to flexible pricing models.

When asked, 41% of respondents "strongly agreed" that investments in technology could help facilitate the creation of more innovative pricing structures, but only 21% showed the same level of belief toward the possibility that tech could help them shift from the billable hour towards flexible pricing models.

"I think that from speaking to clients that is absolutely the hope that technology will help move into more innovative pricing structures. Whether it's happening in reality I think is still to be proven," Clift said.