You can find opportunity in every market—up, down or flat—the only question is which of the many strategies will work. The legal market has reached the point where each market opportunity demands a different strategy. BTI’s new research, based on 330 interviews with corporate counsel, reveals corporate counsel have hit the reset button. New spending is now popping up as new priorities and new trends (the good and the bad) take hold.
- To Grow Where No Legal Market Has Grown Before
After shrinking in 2013, the US market for outside counsel services grows in 2014. And the good news continues: this is expected to last through 2015. Expect growth for all but 2 practice areas. Corporate counsel tell us they are planning to increase spending in 15 of 17 practice areas; sparking growth (admittedly some will grow imperceptibly) in 2015. The 2 noted exceptions: real estate and litigation will see declines. However, 8 practices are considered to offer above-average market growth and access to premium rates.
Cybersecurity/Data Privacy emerges as a major market opportunity with spending on cybersecurity-related issues crossing the billion-dollar threshold. This quickly growing area promises 2 to 4 mega-cases each year and an abundance of large, complex matters.
Strategy impact: The gateway for law firms looking to capture clients’ big-ticket spending is through smaller assignments focused on assessing risk and compliance. Be prepared to provide a side of counseling while you work for the larger matter.
- The Localization of Global Work
Global organizations continue to increase their US legal spending. Companies based outside the US are in growth mode providing a steady stream of transactions, labor and employment issues, regulatory conflicts, and strategic IP issues—all originating in the US legal market. More than 50% of the law firms serving these clients are outside the AmLaw 50.
Strategy impact: Come armed to discuss the business implications (more so than the legal consequences) their organization can expect.
- Litigation’s Glory Days Are Gone
3 years of litigation spending declines and another on the way for 2015. Corporate counsel are committed to reducing their litigation spending—and dockets. Resolution rates (settlements) are soaring. Work is starting to move in-house while organizations cut the number of bet-the-company matters.
Strategy impact: To capture volume in the face of declining spending (and be positioned to win the major bet-the-company work when it arises), think about the litigation market in terms of early triage, smart staffing, and creative fee structures.
Reset markets—those with shifting patterns—offer advantages to law firms with more market-centric approaches. Firms with their finger on the pulse of the market have already started to change their strategies. Other firms will hit their own reset button and try to leap frog competitors.
Click below for more highlights from the brand new Legal Spending Outlook 2015.