The legal market may be flat-lining in terms of growth, but under the surface is a dynamic, fast-changing environment. The hot industries and practice areas from last year have disappeared. In their place are new opportunities for growth. Only the law firms able to bring a quick and flexible approach to targeting these fleeting opportunities will see growth in 2016.
Law firms can take 3 steps, starting today, to ensure they reach these opportunities before competitors.
Step 1: Find the Best Opportunities for Business in 2016
BTI’s Industry Opportunity Matrix (based on more than 300 interviews with General Counsel) identifies, by practice and industry, exactly where clients—and which ones—will be spending their legal dollars in 2016.
Step 2: Focus Your Firm to Target Growth Areas
There are many strategies to grow a law firm, but only a handful can be executed with the speed and efficiency to make next year a growth year for your firm. Using the opportunity zone chart above, choose a strategy most aligned with your firm’s current relationships and capabilities:
Focus first on client development plans on building lucrative relationships with the clients positioned to grow in 2016
A client development plan is a tool to help law firms zero in on the clients with the highest potential in terms of profit and access to work. By using the BTI Opportunity Matrix above, target your firm’s existing clients with the most “Hot Zones” (in green) to see outsized growth in 2016.
Assemble industry SWAT teams to quickly move on this year’s opportunities
Most growth opportunities are based on industry trends. Firms don’t need to completely realign their structure to enjoy the benefits of an industry (rather than practice) focused approach. Assemble smaller industry-focused SWAT teams to provide a custom suite of practices (hint: use the above BTI Opportunity Matrix to group together the most in-demand services) to targeted clients and prospects.
Increase your win rate in growth areas with targeted business development plans
The hardest part of developing business isn’t talking to clients about their business or being able to explain what services the firm offers, it’s how to start and steer the conversation. Use the BTI Opportunity Matrix to prepare yourself to discuss top needs and priorities—remove the guess work.
Step 3: Grow!
Firms who learn how to find growth in down markets will outperform all others. The hunt for the less obvious opportunities is on. You have to find them, and grab them before anyone else.
Every firm can improve its strategy by locating and assessing the growth opportunities and pressure points to guide your own efforts to grab the new dollars coming into the market. Fortunately for you BTI has just released the most comprehensive analysis of client growth and spending plans in BTI Business Development Opportunity Zones: How to Grow by Industry and Practice in 2016. BTI’s newest report provides step-by-step guides and tools for the 3 strategies above—plus 2 more—to exploit your best growth opportunities. Learn more.
Chief Legal Officers generated $9 million in value in the face of the largest legal budgets seen in 15 years. New approaches to managing outside counsel, settling litigation, alternative fees, focusing on compliance, pushing budgets on law firms and providing more support to business units is paying dividends. And don’t forget, corporate counsel have moved more than $1 billion in house in the last year. The changes are paying off big time.
More Value with Bigger Budgets
Corporate legal budgets are at a 15-year high as measured in dollars spent. But, the average large company managed to reduce spending to .38% from .45% of revenue over the past two years. This means as companies grew larger the percentage spent actually declined. Chief legal officers were able to support more business with $9 million less.
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.