The Pendulum Swings Back to Outside Counsel

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What goes around comes around. Finally. Clients are sending substantially more work to outside counsel for the 2nd year in a row. The spending increases are widespread and across the board.

10 Practice Areas Slated for Growth. 5 to Shrink.

Cybersecurity and M&A Lead All Growth

Spending is increasing most in Cybersecurity as GDPR, California regulations, and public scrutiny skyrocket. M&A follows closely with the 2nd biggest increase in outside counsel spending in 2019. These 2 areas are leading in client mindshare as well as spending.

IP Litigation and Private Equity Slotted for 5% Gains

IP Litigation will see fewer matters but more spending. This means bigger matters and higher risk for clients—and more outside counsel need. Private equity firms see increased activity driving new and more spending.

Tech, Health Care to Lead the Spending

High Tech companies are planning the biggest and broadest increases. Look for these big spenders to be sending substantially more money to law firms in 9 practice areas—and expecting to pay higher rates. Health Care plans increases in 7 practice areas—as does Pharmaceuticals—and expects higher rates from outside counsel as well. Financial Services and Energy companies plan to increase outside counsel spending in 6 practices.

Plummeting Settlements Adds to Outside Counsel Spending

Clients tell us they settled 38% of their active matters—down substantially from 61% just 2 years ago. Fewer settlements means more legal fees. They face more complex and high-stakes matters than ever before—making these matters harder to settle.

Unintended Impacts and Outcomes

The shift to more outside counsel spending is placing unrelenting pressure on everyday routine and recurring matters. Clients realize they will be paying higher rates for the new more complex matters—but overall budget increases aren’t going up enough to cover the higher rate spending. This means they are forced to spend less on lower-risk matters. It also means more use of alternative fees for both new and existing matters.

Getting while the Getting Is Good

The new spending will go to the law firms who seek it out and develop the business early. Those who wait for RFPs will be left behind. This compels all client relationship managers to engage in deep discussions about strategy, current priorities, upcoming needs, and new strategies to improve settlement rates. The lion’s share of the gains will go to the firms who cannot only engage with clients but also get to clients first.

You can pinpoint where each and every practice will grow and command higher rates in the newly released BTI Practice Outlook 2019: Changes, Trends and Opportunities for Law Firms.

MBR

(Based on more than 350 in-depth interviews with top legal decision makers conducted between January 2018 and September 2018 conducted by The BTI Consulting Group.) 

1/3 of Law Firms Up Their Marketing and BD Spending

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33% of law firms are increasing their Marketing and Business Development (MBD) budgets. This is 3 times more firms than last year—making this the largest number of firms increasing their MBD spending in 9 years. This increased investment in MBD may just give these firms an unprecedented edge in 2019.

New money means new programs or beefing up old ones. These CMOs put the following programs at the top of their to-do list:

  • Client feedback

  • Client service

  • Industry programs

On average, these lucky CMOs will have 5.13% more to invest in MBD than they did in 2018.

Which Firms Will Be at a Disadvantage?

Fully 64% of law firms are keeping their budgets the same as last year—again, as measured by percent of revenue. Firms experiencing bottom-line growth will throw more actual dollars at MBD, but not as much as the firms increasing the percent of revenue committed to MBD. The firms with no growth will be facing the same budgets as last year.

Small Increases Go a Long Way

Overall, the typical law firm (the largest 500 firms) are targeting 2.76% of their revenue for marketing and business development in 2019—up from 2.63% this year. The Am Law 100 is targeting 2.67% of revenue, while the Am Law 101-200 targets 2.71%. Law firms outside the Am Law 200 are planning to spend 2.86% of their revenue on MBD. The differences are woefully small to sound meaningful—but, can be the difference between 1 and 5 full time BD equivalents, funding a new client team, or creating one more industry group. All of which are proven to drive new business.

Why Increased Budgets Will Bring the Biggest Returns Ever

Clients are moving a giant chunk of their legal budget back to outside counsel for the second year in a row in Litigation—we will see the same increases across most legal spending when we release our BTI Practice Outlook 2019 next week. This increase in spending is a gift. The law firms able to capture this new spending put themselves in a position to reap the benefits for years.

In addition to increasing their spending, clients are making big decisions about which law firms to use and how to reduce their rosters. This means much more business for the law firms able to snag a spot on clients’ shrinking roster of legal providers. The amount of new client spending dwarfs the increases firms are making to their MBD budgets—making a compelling argument to boost those MBD budgets for 2019. One-third of law firms have already figured this out.

There’s still time to rethink your firm’s budget.

MBR

*Based on in-depth interviews BTI conducted with more than 136 law firm marketing leaders between July 13, 2018 and November 5, 2018.

 

 

 

66 Law Firms Leading Litigation as Market Surges

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You are looking at the highest levels of corporate legal spending in a decade. High-stakes work is growing like a weed. Clients are expecting an influx of new matters and plan to spend more on existing matters. Clients are cutting their internal budgets to fund new outside counsel needs, Why? Increasing workloads and more complex needs clients don’t want to handle and don’t have the resources to handle in-house.

Here is what to expect in the 2019 litigation landscape along with 66 law firms best positioned for these new opportunities. The Powerhouse and Standout law firms in the links below are the ones corporate counsel tell us they are turning to for their most pressing litigation needs in 2019.

The IP Litigation Outlook: The Powerhouse and Standout Law Firms

Why GCs are Hiring: Fewer, but bigger and more complex matters.

The Class Actions Outlook: The Powerhouse and Standout Law Firms

Why GCs are Hiring: Increasing risk and exposure and ever more innovative plaintiffs.

The Complex Employment Litigation Outlook: The Powerhouse and Standout Law Firms

Why GCs are Hiring: Changes in regulations around wages; increased concern about wage and hour issues; a growth in investigations, spurred by sexual harassment and workplace culture.

The Product Liability Litigation Outlook: The Powerhouse and Standout Law Firms

Why GCs are Hiring: Increased caseloads, more complex matters as a result of increasingly complex products and data these products gather and rely on.

Clients are reevaluating who and what types of firms they want to use as the nature of Product Liability claims undergoes a fundamental change.

The Complex Commercial Litigation Outlook: The Powerhouse and Standout Law Firms

Why GCs are Hiring: Increases in 5 industries is enough to drive growth and increased spending on outside counsel.

Learn more about how your firm can take advantage of new spending and matters in 2019—and what your firm can do to adapt, in the new, just released BTI Litigation Outlook 2019: Changes, Trends and Opportunities for Law Firms.

The Product Liability Litigation Powerhouses and Outlook for 2019

Product Liability Litigation can frequently turn into high-stakes work, but most organizations facing these types of potential issues are trying to minimize and avoid damage well before a full litigation trial develops. Clients are skilled in assessing risk and look for alternative fees to match. Clients want law firms who can assess and understand the exposure associated with product—and hire the firms who adjust their approach to match the risk.

You can learn more details about the best opportunities, how client expectations are changing, and the 51 law firms clients recognize most in Product Liability Litigation in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 8 firms as leading the market. Please join me in congratulating the Powerhouses and Standouts.

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PRODUCT LIABILITY POWERHOUSES

  • Jones Day

  • Quinn Emanuel Urquhart & Sullivan

PRODUCT LIABILITY STANDOUTS

  • Barnes & Thornburg

  • Goldberg Segalla

  • Greenberg Traurig

  • McGuireWoods

  • Shook, Hardy & Bacon

  • Wheeler Trigg O’Donnell

Learn more about the firms clients singled out for Product Liability Litigation prowess in the newly released BTI Litigation Outlook 2019.

The Complex Employment Litigation Powerhouses and Outlook for 2019

Employment Litigation will effectively stay even with 2018 spending. Although, the faster growth is in the large and complex matters. Clients are paying more for these larger assignments. Clients report continued need in the less complex segment of the market as well. Clients want to be able to manage their complex cases while managing the everyday work under alternative fees and delivery structure. Look for opportunities in Banking, Energy, Financial Services, and 4 other industries. 

You can learn more details about the best opportunities, how client expectations are changing, and the 79 law firms clients recognize most in Complex Employment Litigation in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 5 firms as Complex Employment Powerhouses—and 21 firms as Complex Employment Standouts. Please join me in congratulating the Powerhouses and Standouts.

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COMPLEX EMPLOYMENT POWERHOUSES

  • Gibson Dunn

  • Jones Day

  • Kirkland & Ellis

  • Morgan Lewis

  • Reed Smith

COMPLEX EMPLOYMENT STANDOUTS

  • Baker Botts

  • Bartlit Beck Herman Palenchar & Scott

  • Carlton Fields

  • Day Pitney

  • Debevoise & Plimpton

  • Dentons

  • DLA Piper

  • Duane Morris

  • Hogan Lovells

  • King & Spalding

  • Latham & Watkins

  • Mayer Brown

  • McGuireWoods

  • Norton Rose Fulbright

  • O'Melveny

  • Parker, Hudson, Rainer & Dobbs

  • Pillsbury

  • Sidley

  • Sullivan & Cromwell

  • Troutman Sanders

  • Weil

Learn more about the firms clients singled out for Complex Employment Litigation prowess in the newly released BTI Litigation Outlook 2019.

The Complex Commercial Litigation Powerhouses and Outlook for 2019

More companies are facing commercial litigation matters than last year. Most of the increase is coming from the soaring rates of high-stakes matters—which is also putting pressure on the routine work. Look for growth in Consumer Goods, Food, Insurance, and Transportation.

You can learn more details about the best opportunities, how client expectations are changing, and the 80 law firms clients recognize most in Complex Commercial Litigation in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 5 firms as Complex Commercial Powerhouses—and 23 firms as Complex Commercial Standouts. Please join me in congratulating the Powerhouses and Standouts.

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COMPLEX COMMERCIAL POWERHOUSES

  • Gibson Dunn

  • Jones Day

  • Kirkland & Ellis

  • Morgan Lewis

  • Reed Smith

COMPLEX COMMERCIAL STANDOUTS

  • Baker Botts

  • Bartlit Beck Herman Palenchar & Scott

  • Carlton Fields

  • Covington

  • Day Pitney

  • Debevoise & Plimpton

  • Dentons

  • DLA Piper

  • Duane Morris

  • Hogan Lovells

  • Jenner & Block

  • King & Spalding

  • Latham & Watkins

  • Mayer Brown

  • McGuireWoods

  • Norton Rose Fulbright

  • O'Melveny

  • Parker, Hudson, Rainer & Dobbs

  • Pillsbury

  • Sidley

  • Sullivan & Cromwell

  • Troutman Sanders

  • Weil

Learn more about the firms clients singled out for Complex Commercial Litigation prowess in the newly released BTI Litigation Outlook 2019.

The Securities and Finance Litigation Powerhouses and Outlook for 2019

After a flurry of new activity in 2018, the percent of large organizations handling Securities and Finance litigation dips back to 2016 levels. The companies still managing these matters plan to increase their spending in 2019—driving moderate growth for this segment of the litigation market.

You can learn more details about the best opportunities—by industry—and how client expectations are changing in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 5 firms as Securities and Finance Powerhouses—and 11 firms as Securities and Finance Standouts. Please join me in congratulating the Powerhouses and Standouts.

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SECURITIES AND FINANCE POWERHOUSES

  • Jones Day

  • Morgan Lewis

  • Sidley

  • Skadden

  • Wachtell, Lipton, Rosen & Katz

SECURITIES AND FINANCE STANDOUTS

  • Covington

  • DLA Piper

  • Gibson Dunn

  • Hunton Andrews Kurth

  • Kirkland & Ellis

  • Maynard Cooper & Gale

  • O'Melveny

  • Paul, Weiss

  • Pillsbury

  • Weil

  • Winston & Strawn

Learn more about the firms clients singled out for Securities and Finance Litigation prowess in the newly released BTI Litigation Outlook 2019.

The Class Actions Litigation Powerhouses and Outlook for 2019

More than half of large organizations face class actions each year. What is different is the number of class actions a large organization manages in a year—this is noticeably on the rise. Combined with an increase in exposure of each of these cases, you have the all the conditions necessary for growth.

You can learn more details about the best opportunities, how client expectations are changing, and the 82 law firms clients recognize most in Class Actions Litigation in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 4 firms as Class Actions Powerhouses—and 22 firms as Class Actions Standouts. Please join me in congratulating the Powerhouses and Standouts.

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CLASS ACTIONS POWERHOUSES

  • Jones Day

  • Kirkland & Ellis

  • Littler

  • Morgan Lewis

CLASS ACTIONS STANDOUTS

  • Arnold & Porter

  • BakerHostetler

  • Carlton Fields

  • Debevoise & Plimpton

  • Dentons

  • DLA Piper

  • Foley & Lardner

  • K&L Gates

  • Katten Muchin Rosenman

  • Latham & Watkins

  • Mayer Brown

  • McDermott Will & Emery

  • McGuireWoods

  • Morrison & Foerster

  • O'Melveny

  • Orrick

  • Pierce Atwood

  • Reed Smith

  • Sidley

  • Troutman Sanders

  • Wheeler Trigg O’Donnell

  • Winston & Strawn

Learn more about the firms clients singled out for Class Actions Litigation prowess in the newly released BTI Litigation Outlook 2019.

The IP Litigation Powerhouses and Outlook for 2019

IP Litigation is poised to be the fastest growing segment within Litigation at 5.15% in 2019. The number of companies expecting significant IP Litigation dropped slightly. Increased spending plus fewer matters equals higher hourly rates and larger spending on each matter. These dynamics offer law firms opportunities to develop bigger relationships—more than offsetting the drop in companies with IP Litigation needs. Look for the biggest increases to come in Chemicals, High Tech, Manufacturing, and Pharmaceuticals. 

You can learn more details about the best opportunities, how client expectations are changing, and the 53 law firms clients recognize most in IP Litigation in the just released BTI Litigation Outlook 2019.

You can also learn why clients recognize 7 firms as IP Litigation Powerhouses—and 11 firms as IP Litigation Standouts. Please join me in congratulating the Powerhouses and Standouts.

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IP LITIGATION POWERHOUSES

  • Fish & Richardson

  • Jones Day

  • Kirkland & Ellis

  • Orrick

  • Perkins Coie

  • Sidley

  • WilmerHale

IP LITIGATION STANDOUTS

  • Alston & Bird

  • Duane Morris

  • Finnegan

  • Goodwin

  • Greenberg Traurig

  • Hogan Lovells

  • Kilpatrick Townsend

  • McGuireWoods

  • Morrison & Foerster

  • Pillsbury

  • Wilson Sonsini Goodrich & Rosati

Learn more about the firms clients singled out for IP Litigation prowess in the newly released BTI Litigation Outlook 2019.

37 Law Firms Most Feared in Litigation

Advantage goes to the feared.

Good strategy stops others from acting before they start. The most feared firms make their opponents either stop or change what they are doing. Feared firms have the upper hand as the opposing side is reacting to your changes—meaning you can better drive the process.

Clients change their views on law firms to be feared based on law firm behavior—and what they hear from their peers. This year, clients point to these specific behaviors:

Unpredictable

The most feared law firms will do things their opponents don’t expect. Until just 2 years ago, clients felt like they could anticipate the strategy opposing counsel would take—no more. The Fearsome Foursome and other feared firms stand out for their new, unexpected, and winning strategies.

Show of Force

These feared client teams want to start off with a show of force. They bring a lot of talented attorneys to bear early and come on strong. This initial surge lets the other side know they are in for a bigger fight than they ever dreamed—and their client is wildly committed to getting the outcome they want. It may cost more, but clients are convinced it’s the cheapest way to go over the life of the matter.

Cut Through Complexity

The most feared law firms cut through complexity swiftly and decisively. This is a real advantage as complex matters are the fastest growing segment of the litigation market.

Unrelenting

Fearsome firms are unrelenting in meeting their client’s goal—and their behavior lets everyone know of their unmatched commitment—including the opposing side.

Please join me congratulating the following 37 law firms:

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The BTI Fearsome Foursome—the most feared law firms in litigation.

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The BTI Awesome Opponents—these firms are nipping at the heels of the Fearsom Foursome.

The Fearsome Foursome Honor Roll

Being Fearsome is one the biggest differentiators in the market today. The number of Fearsome Firms is shrinking; meaning the more Fearsome your firm, the more you stand out, to clients and the other side. It is the Fearsome firms who have nothing to fear.

Learn more about how your firm can take advantage of how client behavior and spending is changing for 2019—and what your firm can do to adapt, in the new  BTI Litigation Outlook 2019: Changes, Trends and Opportunities for Law Firms. Available now.

MBR

(Research based on more than 350 in-depth interviews, with top legal decision makers conducted between January 11, 2018 and August 28, 2018.)

3 High-Performing Practice Leaders Share 5 Tips and Secrets

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Practice Leaders agree and disagree on a lot of things. But when 3 high-performing practice leaders agree, it’s a learning moment. I enjoyed having an insightful panel discussion with Rich Moche of Mintz, Tom Schulte of Clifford Chance, and Philip Sellinger of Greenberg Traurig at the Practice Management 2.0 Conference in Chicago. We focused on how to drive performance. Each of the 3 panelists presented a different perspective—but the following common themes emerged:

Prioritize

The move into practice leadership means an exponential increase in situations with an apparent need for attention. The solution—prioritize. Don’t limit yourself to taking a hard look at the list of items competing for your precious attention. Scrutinize and decide what you absolutely must do and can’t delegate—and what needs to be done now. Now does not mean just short term—now can mean starting strategic initiatives as well.

Prioritizing can become a second nature skill, enabling practice leaders—and their practices—to be more focused and get substantially more done.

Delegate

Delegation quickly follows prioritization in lessons learned. These practice leaders looked to see what they could delegate up, sideways, down, or to support staff in some way. Limiting yourself to downward delegation constrains the ability to leverage your time. Practice leaders are moving more towards using support and management staff to help get things done.

Embrace Other Professionals Within the Firm

Embracing other professionals is a key part of a practice leader’s strategy. This includes the Marketing/BD department as well as HR. But, the newest area of support is coming from practice managers. These individuals help with running the practice and ensuring associates are being utilized—both for associate careers and maximizing billable time. Some of these practice managers drive communications and act as the go-to person to try to resolve issues which may not need practice leader attention.

Learn Why Not What

As a relationship manager, partners want to know what their client really wants, needs—and how to make this happen. As a practice manager, your focus becomes: “Why did we win this work”? What can we learn from this to win more work? What did clients see as our strengths and why did we stand out? All the practice managers agreed—the only way to learn is to ask clients—whether they interview clients themselves or through 3rd parties.

Talk and Listen to Millennials

The generational divide is top of mind. Our panelists suggest the best strategy for understanding and getting the most out of your millennials is to talk to them—and listen to what they have to say. The millennials may or may not want to be lifers at your firm but—the more they are heard and believe their voice matters—the longer they will stick around. These practice managers also note millennials have a sense of how the business of law and delivery of legal services may be disrupted—as disruption is a routine part of their life.

Overall, these practice managers are optimistic about the future but don’t suggest it will be easy. Each is highly focused and has a clear idea on where their practices are headed—and what they want their practice to look like. Successful practices use different strategies than other practices. These tactics are among those defining the high performers.

The panel consisted of:

Richard H. Moche, a Member at Mintz Levin and Chair of its Public Finance, Real Estate, Bankruptcy, and Environmental Division

Philip Sellinger, who recently served as Co-chair of the Global Litigation Practice at Greenberg Traurig and currently serves as Managing Shareholder- New Jersey; and Regional Operating Shareholder

Thomas Schulte, Senior Counsel at Clifford Chance. Tom recently served as Head of the Americas Banking & Finance Practice and was a member of the Firm's Partnership Council, the supervisory board of the global firm.

I extend my deep appreciation to Rich, Tom, and Philip for their candor, time, and energy in sharing these thoughts with a captivated audience at the Practice Management 2.0 Conference held last week (October 4, 2018) at the Gleacher Center at the University of Chicago.

MBR

Making Better Associates Faster

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Associates want more than money. They want some recognition—not much, but some—and they want to feel like they have a future. A big part of this sense of future is feeling like their firm is investing in them. Law firms can take immediate steps to make the future more obvious and brighter.

Ask associates to make decisions before you think they are ready

Not the biggest decisions, but just ahead of where you think their knowledge and experience are. Put these associates in a position to chase instead of following their performance. The associates who will grow into leaders want the opportunity to strut their stuff and be challenged.

Their ability to make the right decision is an intangible benefit providing confidence and increased job satisfaction. They may be wrong in their decisions, but they will learn faster by making their mistakes in a protected environment. Be ready to coach and explain why they might have made a wrong decision in time to make it right.

Find a reason to bring associates to clients

The best associates thrive on client air. Nothing compares to observing clients, interacting with clients, and seeing how different things can be with a client present. Your associates can observe partner behaviors and discussions, and gain insight into the art of client management and how to talk to clients. Associates will also be better able to support partners as they hone their knowledge of what partners need.

Ask your best clients if you can bring associates to meetings to learn and observe

Most clients welcome this opportunity. They enjoy mentoring and influencing an associate’s career. This gesture shows clients how client-focused you are as you teach associates what clients think. If you are skilled and/or lucky, your client will invest in your associate’s success.

Give your top associate a specific role in client meetings

Then, immediately give them detailed coaching on how to play this role. This includes practice sessions before you go to the client meeting. Don’t go easy—practice the difficult questions as well as the softballs.

Ask your associates to research one major client in depth to find new information and insights

Understanding a client’s business is one of the biggest law firm differentiators in the market. The best associates crave information about the client for whom they perform work. This adds up to a high-power opportunity for associates and law firms. Ask an associate to perform business research on a key client where they bill time. Ask them to look beyond immediate headlines and find product plans, growth plans, M&A history, and business challenges.

Ask these associates to use all firm resources but insist they synthesize the data into usable analysis, and bullet points. Ask for partner-ready summaries which relationship managers can use to discuss things with clients. Associates love the responsibility to make an impact and partners get help in developing high-value client conversations.

Train, train, train, and train

Few things say I’m investing in your future like training. Training goes well beyond teaching associates new and useful skills…it drives culture. Associates adopt the values the training supports. Start training in client service and watch associates embrace the importance of client service. Train them every year and they will believe it is increasingly important in everything you do.

We recommend developing and delivering associate training in 4 key areas:

  • Client service—a core component of any client-facing business. You can’t train anyone early enough nor hone their skills enough. This associate training will also improve partner support and productivity—as associates use newly acquired client skills with partners.

  • Business development—a proven tool to draw out the associates with interest and potential talent in business development. Use this training to introduce business development and bring it into the firm’s culture early. This will make business development a more natural and effective process when the associates reach partner.

  • Social media—your associates are already using it. Leverage their natural inclination to incorporate social media into their professional success. The art of social media for business can be taught and is effective for making new contacts and clients.

  • Networking—always talked about but rarely taught. Teaching associates when, where, and how to network is giving them fuel for their careers and business development.

Associates are more valuable than ever—and continue to increase in value. Law firms are working harder to keep them—and keep them longer. These steps turn associates into better attorneys, makes them feel more invested in the firm, and helps define their clear contribution to the firm besides their billable hours. This is your opportunity to make your associates better and keep them around a lot longer.

MBR

Radical, Crazy and Off-the-Rails Moves to Expect from Law Firms

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Nothing—including robots, AI, and technology—is as exciting as law firm behaviors. Law firms will become emboldened, impatient, highly strategic, and desperate as the more aggressive law firms make ever-bolder moves on the market.

Stealing once untouchable laterals is commonplace. Grabbing practice groups is part of the new norm. Baker McKenzie openly states its goal of finding merger partners to build out the East and West Coasts. All this is going on while other law firms either believe bold moves are too risky or look to leap frog everyone else.

We are about witness a new round of old moves as firms jockey for position. Look for the more noticeable moves to include:  

1. No Charge for 1st- and 2nd-year Associates

A prestige law firm stops charging for 1st- and 2nd-year associates. The associates will work on matters governed by alternate fees or other arrangements to enable firms them to change the economics.

2. Law Firm Buys a CPA Firm

A major law firm buys a CPA firm with the intent of getting into the audit business and merging their tax business. Think of a reverse play on the Big 4—on a smaller scale.

3. Become Management Consultants, Too

Entering the management consulting business. McKinsey was started by partners who left Jones Day. This business offers non-conflicting growth. The management consulting-bound firm will recruit top partners from the established management consulting firms to build the business.

4. Dive into the Forensics Business

Firms will move into the forensics business. This market will grow. Law firms receive one of the first calls in situations where forensics are likely to be needed. Law firms could have the first shot at this work and be bringing the added benefit of client privilege.

5. Establish an Investigations-only Firm

The investigations market will grow more quickly than anyone expects. A few current rock stars will leave their posts in and outside of law firms and form a boutique—boasting prowess, client service, flexibility, and brand. They will use other firms to meet the need for big teams.

6. Conduct Post-win Debriefs Routinely

Law firms learn so much when probing why they won instead of why they lost. Win rates will increase, and any meaningful win will be followed by a debrief as to why.

7. Completely Redesign the Client Experience

A small number of large law firms are acting. These firms assign a small group of senior partners to completely redesign and redefine the client experience. Their goal: to make it drastically better than today’s standard. This experience will establish a new standard and be designed to change and evolve. The time has come. The time is now. Clients want a vastly better and different experience.

8. Secondments to be Standard

Select law firms will see secondments as the fertile training and business development ground it is. Every associate at these firms will spend at least 3 months at a client within their first 3 years.

9. Magic Circle Merger

The Magic Circle merger with a Wall Street/NY firm is inevitable. Between global demands, US‑style litigation slowly spreading around the world, and pressure for firms to grow—look for at least 2 mergers of this kind.

10. A Big 4 Accounting Firm Buys Law Firm with Scale

The Big 4 will set up clever vehicles to effectively own a law firm of size and substance.

Remember, the big accounting firms are the primary reason we have LLCs. This is the logical move to build a firm. The Big 4 know how to integrate and can streamline delivery. Everyone and no one will be surprised.

Admittedly, we have eluded to the last 2 before, but we just couldn’t resist saying it again.

These radical moves will get a lot of attention and will be copied. Some of these strategic moves will be real and outsized winners. Others will be winners for some firms and not others depending on culture,  mindset, commitment, and appetite for real change. All will happen and influence the market—making strategic planning more interesting, more demanding, and more impactful than ever before.

MBR

More Clients than Ever Cutting Law Firm Rosters; Sets New Record

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Clients are at it again. No sooner had clients cut their law firm rosters to record lows than they turn around and start cutting again. But on a much wider scale.

22% to 30% of clients are cutting, or about to cut, their law firm rosters. This sets a new record and is double the prior average of 13% of clients looking to cutback at any one point.

These top legal decision makers say the trifecta of a surge in shoddy law firm work, increasing complexity, and lackluster client service turns too many law firms into way too many law firms. Managing this many law firms costs way more than money—it costs money, cycle time, and increases risk.

Why They Do It

For clients, fewer law firms translates into better risk management. Fewer law firms means more uniformity in approach, overriding legal philosophy, and fewer people to understand and make understand. Communication is more streamlined and direct. In short, life is easier and work flows more smoothly. It also saves money.

As a result, clients are planning the biggest cuts to their rosters yet. These clients are planning reductions from hundreds or dozens of firms to fewer than 10. The fringe players will be gone or phased out. A few secondary providers will move up the ladder. The current primary firms will have to prove their worth to keep the coveted primary spot as the firm receiving the biggest portion of the work.

Clients are looking for firms who can deliver on the client service front. These same clients are looking for signs of collaboration within a firm as work streams grow in size. Currently, only 51% of clients believe their law firms show signs of collaboration, and only 33% recommend their primary law firm. The field is pretty open. Clients will rely as much on your pre- and post-pitch discussions as your initial pitch to see if your firm makes the cut.

After talking to 359 clients—here’s what we recommend you do:

  • Ask clients if and when they plan to shrink their law firm rosters—these are no longer public events and may be conducted with little fanfare

  • Help clients plan to use fewer law firms by segmenting work based on risk and complexity, business units in your client’s company, or other high-value categories

  • Develop a plan to perform the best work with a new approach, including regular budget and update meetings and training to better learn client objectives and sensitivities

  • If you have to pitch in a competition, talk all about client needs and risk—they know who you are and are eliminating firms who act like they are pitching a new relationship and are talking about themselves

  • Ramp up every aspect of client service to ensure you not only show improvement but also stand out

  • Get deep and meaningful client feedback about how you can improve and your clients’ plans—yes we do a lot of this, and clients are happy to share—especially if they want to keep you on their panel

Every client cutting their law firm panel is a major growth opportunity. Look for it, go find it, and use it to your advantage while other firms still see it as a threat. Your clients will welcome the help if you have a meaningful relationship—like the kind of client you want to keep. Those firms who don’t act like they already deserve the work are the first to fall by the wayside.

MBR

(Based on more than 350 in-depth interviews, with top legal decision makers conducted between March 2018 and August 2018.)