5 New Trends Point to Big Changes

5 Trends_Ocean Wave_Mad Clientist Header.png

The ink isn’t quite dry yet on our most current research. But, we see clear signs of subtle change with big impacts. We just finished in-depth interviews with more than 300 top legal decision makers—here is what we are learning:

Complex Work is Morphing into Bet-The-Company Work Mid Matter

Matters starting out as complex are growing into bet-the-company matters. Top legal officers report the newly bestowed bet-the-company status is a direct result of increased financial exposure. Litigation matters start out contained—then grow and attract regulators, other plaintiffs, and a growing list of securities litigators if the company is public.

This trend is bad for clients but gives law firms real opportunity to join the exclusive bet-the company club for firms who are looking for entry. It is also causing serious damage to law firms who don’t realize they are now handling bet-the-company work.

Clients Have Less Patience than Ever

The value of a client’s time is increasing as the complexity of their matters remains at peak levels. Clients are spending more time managing risk and strategizing—leaving less time to track down attorneys, matter details, budget status, and other issues which steal precious time from your client’s main mission. And the more valuable a client’s time—the less they have for nonvalue-added tasks. Law firms are losing serious work because they don’t provide comprehensive and timely status reports. This reporting is just as important as the legal strategy.

Large firms are in their 4th year of outspending other law firms in client development—and keep winning more work than other firms.

Much is being made of the largest law firms growing much faster than other firms. 2018 marks the 4th year in a row these largest firms spend 1/3 more on client development than all other law firms. This is the reason they are winning so much new business—they have been spending more and working harder to get it.

Mid-size Firms Living Large in Mid-size M&A

Mid-size and smaller firms are carving out preferred relationships with the largest law firms to handle the small deals larger firms don’t find economical. The largest firms are all chasing large deals and private equity. It’s a great market with great clients. But these large firms can’t do small deals—and don’t want to. A clever group of mid-size firms, think 100 to 400 attorneys, are making a nice living developing preferred relationships to handle these smaller deals and service the daylights out of the clients and larger law firms.

This adds to the already established trend of mid-size firms having an especially strong position with non-US-based companies for making US-based acquisitions.

AFAs are Back

Client interest in AFAs is gaining new momentum as complex litigation grows faster than budgets are increasing—and is squeezing the routine work. Top legal officers are finding AFAs and settlements are 2 powerful tools to manage budgets and squeeze more litigation money out of the budget for the more expensive and complex matters.

Spot and Ride the Trends

The fast movers are grabbing clients while other law firms aren’t even looking as they take advantage of these trends. It is 1 the most effective tools to develop business and build enduring relationships.

Partners in a continuing dialogue with their clients are the first to learn these trends—clients will have shared them through words and behaviors. You can also predict and anticipate these trends through well-crafted and executed client feedback. Your chances of picking and using these trends to your advantage are directly linked to the frequency and depth of your client feedback. They are also linked to knowing exactly why clients bring you in and if the reason they bring you in changes. And, one thing is as sure as death and taxes—client needs will change.


11 Trends Reshaping Law Firm Marketing and BD

11 Trends 2-8-18 Blog Size.png

Law firm CMOs are pushing change forward. Go-to-market strategies are starting to diverge. Law firm focus on client development is becoming more widespread. Twice as many CMOs think social media is overrated—as opposed to underrated—while the majority of CMOs are starting to use more targeted marketing tactics in attracting clients and new work. And, this is the tip of the iceberg.

Clear and Unmitigated Changes in Law Firm Marketing

BTI just finished analyzing the results of our 10th survey of law firm marketing leaders. We found clear and unmitigated changes in strategy, approach, views on the market, and strategic thinking which help define law firm marketing and business development moving forward. 11 findings immediately stand out:

  1. Dedicated salespeople return to the law firm marketing scene at 11% of law firms, up from a handful of firms 5 years ago.

    Only a small number of law firms have the balance of culture, temperament, respect and trust for BD and compensation systems, as well as support systems, to make this successful. A dedicated salesperson can be a powerful tool, but it rarely works unless the bulk of these elements are already in place when your dedicated salesperson arrives. We expect only a small number of firms will be successful—but, the successful firms will have great results.

  2. The biggest 30 law firms continue to increase the budget behind client development activities. Client development is now 37% of the marketing budget, up from 34% in 2016.

    The law firms under the most pressure to grow are budgeting to protect their client base. Their budgets are in the right place. This has 2 big implications:

    —  It makes it more difficult for every other law firm who wants business from these clients, and

    —  Success demands the right tactics and strategies to back these budgets—money alone does not win clients

  3. 59% of law firms see broad market outreach as the most overrated marketing strategy.

    CMOs see themselves getting diminishing returns from casting wide nets to catch new clients. Now they are trying to convince their firms the best strategy is to narrowcast to land the best clients.

  4. 9% of law firms are betting big on social media and making it the centerpiece of their go-to-market strategy.

    The law firm social media world has many players but only these 9% say they are in it to win big business. These firms have highly developed themes for their social media activity along with a well thought out ecosystem to support it.

  5. 20% of law firms see social media as overrated.

    They expect little from social media. These firms also have minimal, episodic, and sporadic presence in this world.

  6. CMOs no longer see themselves as resource constrained, as only 9% say it is an obstacle to growth. This is down from 23% in 2016.

    While every CMO wants more resources, they no longer see the lack of resources as being an obstacle to growth. 90% of law firms have crossed a strategic threshold where growth is determined by the ability to keep current clients and get new ones faster than everyone else.

  7. 19% of CMOs see no obstacle to their firm’s growth in 2017, up from a mere 3% in 2016.

    Strategic confidence grows dramatically. These CMOs believe in their strategies and ability to execute. Most of these CMOs had a hand in developing their firm’s strategy. Again, like the trend in 6, this signals the crossing of the strategic threshold where strategy rules.

  8. The number of law firms reorganizing themselves increased by a factor of 6 to 17% from 2.3% in 2016.

    With the resources they need in place, CMOs are changing their organizations to better support the firms and partners to drive growth. We see move to organize around industries, partners, clients, regions and firmwide—including combinations of the above.

  9. Virtually every law firm is spending less on seminars and events than they were 3 years ago.

    This serves as another piece of evidence law firms are moving to more targeted marketing.

  10. Only 16% of CMOs see Artificial Intelligence (AI) driving increased business. Another 25% expect AI will make MBD more productive. 21% don’t know what the impact of AI will be.

    We expect AI will eventually help CMOs develop highly personalized proposals and pitches with much less effort. AI will bring industry and product/service information—attorneys will have to supply the non-legal interactions to be able to use AI to develop the right tone and voice. And, a partner will still have to sell it.

  11. The typical CMO needs 2 years to learn how to work with the partners when joining a new firm.

    Swapping out CMOs is expensive. More than half of all law firm CMOs are not fully satisfied or engaged. We recommend law firms take a deep look at how they can engage their CMOs more—if not to make your CMO happier, then to save the precious 2 years it takes to bring a new one into the fold.

All these changes add up to opportunity for law firms and CMOs. As law firms develop more focused approaches to the market, marketing and business development are the tools of choice.

There has not been a better time to make a law firm marketing leader’s voice heard. Those who are heard may just become more engaged and want to stay put—and become a permanent part of the 45% of CMOs who are loving what they do. And, will be poised to gain new business and clients at competitor expense.  


(This research is based on interviews with more than 180 law firm marketing leaders conducted over the last 12 months.)

The 16 Most Important Trends and Opportunities for 2018

Opportunity Keys.png

Ten years in the making—growth in outside counsel spending returns. Before we party like its 2007, it’s important to realize the 2018 increase is different. 2007 saw new money flooding the market. In 2018, clients are making a strategic choice to move money from in-house staff to outside law firms. These clients want more breadth of skills, the ability to tap skill sets as needed, and the ability to scale up quickly. These same clients want your smarts and experience. Of the many changes to expect in 2018, here are the 16 with the most impact:

  1. Outside counsel spending will grow substantially for the first time in 10 years.
  2. Clients are shifting $3B in spending to outside counsel from their internal budgets due to the steady increase in complex matters.
  3. 35% more companies expect to face IP litigation than in 2017.
  4. 20% of General Counsel are working on plans to proactively eliminate risk and accelerate regulatory approvals.
  5. Clients will continue winnowing down the number of law firms on their rosters.
  6. The largest legal spenders will increasingly rely on procurement to negotiate rates but GCs will retain hiring decisions.
  7. More high-profile big-market laterals will find new homes at new law firms.
  8. Middle-market M&A work (deals ranging in size from $200M to $1B) will continue to deliver a robust flow of business to law firms as large companies buy smaller companies to fill strategic gaps.
  9. Clients expect every law firm proposing on substantive work to offer budget and progress dashboards.
  10. Industry understanding will play a bigger role in convincing clients to hire your firm.
  11. Clients are beginning to avoid firms where they experience too much attrition.
  12. The largest clients who experience uneven client service will stop giving these firms new work.
  13. Healthcare companies will increase spending in 11 practice areas and will lead all industries in increasing outside counsel spending.
  14. Financial services companies are increasing spending on outside counsel more than most.
  15. Increased outside counsel spending at big pharma will rival financial services.
  16. Litigation will see the most growth of any area with more than a 5% increase in outside counsel spending.

Use these trends to guide your business plans. Target your clients and talk to your top clients about their plans; put these trends in front of them to learn their point of view. Asking is the only way to find out.

The firms who are discussing how these trends are impacting their clients, with their clients, are the firms first in line to get the new work.

We will be discussing these opportunities and much more in our upcoming Market Outlook and Client Service Review webinar on January 18 at Noon Eastern. You can learn more or register here.


14 Best Opportunities and Trends for 2017

Good cheer and optimism abound. This year The Mad Clientist has examined more than 300 in-depth interviews with corporate counsel and 150 in-depth interviews with law firm marketing leaders. There is one goal: spot the opportunities and trends which will have the most impact on law firms in the new year. The top 14 for 2017 are:

  1. Clients with bet-the-company work have quadrupled over the last 3 years.
  2. Top legal decision makers report a bevy of new complex matters coming in the door but almost no new budget to accommodate these bigger, more complex cases.

  3. Corporate counsel spending at large companies hit a record in 2016 but was driven by in-house spending.

  4. The largest law firms will continue to spend 1/3 more on client development than other firms and use this tactic as a tool to gain share.

  5. Employment Litigation, IP Litigation, and Class Actions will get more of the legal budget in 2017 than in prior years.
  6. Banking, Financial Services and Pharmaceuticals have the biggest need for complex work.

  7. Rates are becoming polarized—clients are paying higher rates for more complex work and putting more price pressure on routine work to help fund the new complex needs.

  8. The overall flat to sluggish market is masking enormous opportunity in the rise in demand for complex and bet-the-company work.

  9. Pharmaceuticals shows strong demand in 8 areas of legal practice.

  10. Corporate counsel are hiring new law firms at a pace not seen in 10 years.

  11. More law firms will conduct large-scale client feedback initiatives.

  12. New generation General Counsel will continue to take over for retiring baby boomers and will be more demanding of law firms and less forgiving.

  13. Banking has strong demand for 7 areas of legal practice.
  14. Law firm marketing leaders will face unprecedented workloads as RFPs increase, new generation GCs continue to take over, and pressure to drive revenue increases.

The nature of these opportunities is more client specific than prior years. The broad trends are being driven by client behavior instead of economic trends. Success demands more individual understanding of client thinking and less focus on macro trends. The law firms with a client-centric approach will have a clear advantage.

We will be discussing these opportunities and much more in our upcoming Market Outlook and Client Service Review webinar on January 12 at Noon Eastern. You can learn more or register here.


6 Defining Trends for the Litigation Market Ahead

Opportunity abounds in litigation despite an overall flat market. Companies are facing a mounting stream of new complex and bet-the-company matters, while adding 5 new law firms to their litigation rosters.

Clients demand you bring an understanding of their business, culture, and risk tolerance along with your strategy, to win litigation work. This understanding requires investing non-billable and billable time to make it happen—where the reward is a coveted lead position in the largest segment of the legal market.

Every law firm can take advantage of the 6 defining trends for the litigation market ahead:

1. Companies with Bet-the-Company Work Quadruple

More organizations than ever before are facing high-stakes litigation. 

50.6% of large companies report they have active bet-the company matters in 2016, up from 12.8% in 2014. This marks the continuing shift to new opportunities at the high end of the litigation market.

2. Resolution Rates Remain Robust

As top legal decision makers face more complex work—they are more resolute than ever in finding a path to settlement.

These settlements are as much a risk containment strategy as a cost management strategy. Settlement eliminates the risk and the cost—the only question is: at what price does settlement become worth it?

3. Little Change in Litigation Spend, But Opportunity Abounds

Clients see fewer matters and no change in spending. 

This translates into more spending on the matters which do arise. Most of this is going to the higher-rate, complex matters.

4. Twice as Many Companies Expecting Their Law Firms To Do Double Duty

The number clients looking for one firm to handle both the everyday litigation and the more complex and bet-the-company work doubled. 

This poses a challenge for high rate firms to use AFAs for the lower rate work. It also means all but a few firms may have to develop more of an appetite for routine litigation.

5. Employment, IP and Class Actions See Rare Increases in Spending

Spending increases are concentrated in 3 areas of litigation. 

Employment is grabbing more of the budget as clients face ever murkier issues and reinterpretation of existing regulations. IP is surging as companies see more patent trolls and a few activist operating companies. And Class Actions continues a multiyear uphill climb fueled by the scrutiny of financial services, global sales distribution, and more large-scale product failures.

6. Clients Add 5 New Law Firms to Litigation Rosters

Corporate counsel added 5 new law firms to their litigation roster bringing the total count up to a record 22.

Clients are auditioning law firms for future work by testing the 5 newly hired firms. This says clients are not getting what they want from existing firms—a clear opportunity to step in and give clients what they want: superior client service.

Clients See Ghosts of 2008 Return—This Time Will Be Different

The risk/reward ratio for law firms and top legal decision makers has just made its biggest change in 8 years. Your client’s concern about risk is soaring to levels not seen since the last economic crisis. In this context, it is not surprising to see top attorney rates hit new highs and associate salaries jump. More risk means more clients are willing to pay more for safety. And this means more reward for law firms.

You can read about the underlying risks and rewards below:

1. Client See Risk Return to 2008 Levels

Threats from risk are back with a vengeance. Clients place their priority on risk management at 2008 levels—when they reached an all-time high. Global reach, new technologies, complex supply chains, new regulatory decisions, regulations and investor scrutiny all drive heightened risk. The last time concern over risk hit current levels was just before the market crash, credit crunch and 30% cuts to outside counsel spending in the 1st quarter of 2009.

In 2015, GCs* tell us risk management surged to become the second biggest goal for top legal decision makers, up from a lowly number 4 in 2014 (and 2013 and 2012).

The heightened concern over risk, combined with the institutional memory of the 2008 economic crisis and the large perceived cost of failure, is creating a robust market for preventive strategies and strategic planning.

2. Monster Global M&A Work Is Here to Stay—So Is Middle Market M&A

Global economies make it almost impossible for the largest companies in the world to drive organic growth. This compels global companies to make big acquisitions to drive growth. These monster acquisitions create economies of scale and favored market positions for the acquirers which all serve to drive their stock prices higher.

The insatiable appetite for corporate growth is driving middle market M&A as large companies add product lines, technology, market access and talent.

3. Associate Salaries Showing Froth

Starting salaries for associates just hit $180,000 while the top attorneys now command $2,000 an hour. Any market where starting salaries and record-setting rates make the headlines is either amazingly robust or in a bubble. Clients will learn about the bull market in associate salaries from their law firm relationship partners, or as they receive the new bills—if they don’t learn from the headlines first.

This will invite new cost pressure for the firms not handling global deals or delivering the most complex work. Clients have proven they will pay top dollar for the most complex work. The rates for the remaining work will suffer as they subsidize the premium work.

The firms who can package these higher rates into alternative fee structures will likely escape the rate pressure.

4. High-End Litigation Is Going Global

Product failures (think Takata airbags) and global investigations (Volkswagen) are giving us a preview of what the global market for litigation will look like. We are witnessing the advent of cross-border cases which will grow into a large segment of the market. The combination of large companies rolling out products on a global scale, bigger supply chains who supply more parts and play a bigger role, and the embedded technology which works most of the time (and fails spectacularly when it doesn’t) is bringing many countries into product liability, labeling and performance standard legal issues. In addition, Latin America and the EU are slowly developing vehicles to allow class action or equivalent law suits in these regions of the world. These suits are large, piggyback each other, and spread.

5. Strategic Planning and Proactive Strategies Enter the General Counsel’s Office

Large-scale risk, expected increases in these risks and pressure to deliver business value are driving a small and growing movement to adopt formal strategic planning. The leading GCs are looking forward and incorporating all the relevant factors including: business unit plans and preferences, predicting the nature and extent of litigation they will face and designing strategies to mobilize large teams—including outside law firms—to be able to handle large-scale deals or investigations should they arise.

Law firms will want to be part of this strategic planning team. The planning process will identify known risk, potential outcomes and action. This strategic thinking process is where clients will decide which law firms to use if something big happens.

Note to law firms: this hiring decision is being made well before any specific need. The law firms who win this work will be talking to their clients about their business and risk—and offer suggestions to advance client thinking without ever being asked.

Finding the Reward in the Risk (and the Trend)

Unlike the ominous signs posed 8 years ago, you can find reward in these risks and market changes. Your clients are the most concerned about risk as they have been in almost a decade and are taking active steps to manage these risks. You can make yourself part of your client’s risk management team or watch some other law firm take the role. The window of opportunity will close and the firms who help clients now will be the ones who worry the least about passing along the new record rates for associates.


*Based on BTI research conducted between March 2015 and September 2015. BTI conducted more than 300 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations.

The Legal Trends Your Top Clients Face

It’s tough to make predictions, especially about the future. ― Yogi Berra

The most accurate part of making predictions is how people can always be counted on to make predictions. People predict the weather, the outcome of stories and, right now, the presidential election—often with heated passion.

Predicting future legal markets may seem like it invokes less emotion than predicting the 2016 election. Not true. My discussions with law firm leaders, partners and corporate counsel suggest these closeted futurists have many predictions—passionate predictions—about what to expect. As tough as predictions are to make, everyone exercises their right to make them.

The BTI Consulting Group combines its own research, based on in-depth interviews with 300 or more corporate counsel in each of the last 15 years, with key trends to see where the legal market is headed.

We see these new areas of law emerging and likely to grow within three to five years:

DNA-Based Drugs

Diagnostic labs and life sciences companies are betting big on personalized medicine. Some companies plan to offer custom drugs designed for an individual’s DNA. The companies and their investors are looking for strategies to protect and use the drugs and processes when a core component of the drug (a patient’s DNA) is not their property. In addition, these same companies are thinking about litigation arising from unintended and unexpected outcomes.


Food companies already spend triple the amount a typical company spends on litigation. The food industry sits at the epicenter of GMOs, an extended and complex supply chain, and more performance- and health-based ingredients. Food companies expect challenges and claims from new ingredients and use of GMOs.

Food companies expect a continued increase in mergers, joint ventures, licensing and patent protection as the food chain continues to reinvent ingredients and offerings.

Genetically Modified Organisms

Expect a broad range of litigation to develop—especially along the lines of class actions and mass torts—for unintended, unforeseen consequences. Corporate counsel also expect IP litigation, including patent infringement, to crop up. The demand for regulatory analysis, lobbying and counsel will grow substantially.

The growth will be driven by biotech, life sciences, pharmaceuticals and chemicals. Look for substantial growth in agriculture and throughout the food industry supply chain.

Global Regulations

Clients are looking for globally coordinated regulatory strategies and compliance efforts. This area of law includes regulatory advice and counsel, lobbying and government relations. Clients want one central source against which they can monitor their business, product development and compliance. Like other emerging service areas, success will require deep understanding of clients’ business.

New and Growing Opportunities for Getting Hired

The hiring process in these new and growing practices will be different from the past. Each of these new practices poses large-scale legal and business risk. Corporate counsel are under mounting pressure to define the business risk along with the legal. This pressure to define business risk is driving corporate counsel to first look for attorneys who understand the nature of the business. Then and only then, will these corporate counsel consider other factors.

The law firms that can demonstrate deep business understanding will have first access to these growing practices. The winning law firms also will have a penchant for mapping out new areas of law and legislation. But in the end, the new practices are becoming more complex and pose more risk. This is good news for law firms’ economics—and good news for law firms who talk to their clients on a regular and systematic basis, as these firms are best positioned for the new business.

Click here for the full article in Law Practice Today to see where our client-centric crystal ball shows the most growth for established key practices in 2016.

15 Best Opportunities and Trends for 2016

It’s a special time of year for The Mad Clientist as he clears his desk and combs through each of the 319 in-depth, independent interviews with corporate counsel BTI wrapped up in October of 2015. The goal: find the best opportunities for law firms in 2016.

15 opportunities to drive growth in 2016 stand out:  

1.          The number of companies with bet-the-company litigation tripled.

2.          Cybersecurity is growing at 3 times the market rate.

3.          More clients expect outside counsel to understand their business.

4.          Corporate counsel reverse course and are now sending more work to law firms.

5.          Health care companies plan to increase spending in 10 legal segments—the most of any industry.

6.          Top legal decision makers believe law firms are becoming less flexible in handling unexpected changes in their matters.

7.          Telecom companies plan to increase spending across 8 legal segments.

8.          Corporate counsel report a decline in value overall.

9.          Complex litigation has been reborn after 3 years of dormancy.

10.      More companies will be using RFPs to hire new law firms.

11.      IP clients look for law firms they can use for both prosecution and litigation.

12.      Almost 20% of General Counsel are new to their role within the last 3 years—and just starting to make serious strategic changes.

13.      Middle market M&A continues to grow from already high levels of activity.

14.      Class action is officially in growth mode.

15.      Clients are adding new law firms to their panels after cutting them to a 15-year low.

You can find opportunities in practices, industries and changes in outside counsel management strategies—truly equal opportunities across the board for law firms. We recommend you map these opportunities against practice development plans to spot the ones best suited to your firm. You can move forward even without this strategic formality—inform partners so they can chase the opportunities most likely to yield the best results in 2016.

You can view our annual BTI Market Outlook and Client Service Review Webinar, which covered this topic and much more here. 


5 Trends Clients Want You To Jump On

Early seeds of change often present the best new opportunities. BTI’s new research has uncovered 5 emerging trends—2 are client driven while 3 originate from law firms. Each presents new tactics, or in some cases a new and much better version of an old tactic. But none of these are in widespread use—yet. 

1. Ratcheting Up Client Retention

Law firms large and small are working to turn “my clients” into firm clients. Law firms are developing truly robust client teams and taking deep dives to understand a broad set of client needs and how clients want their law firms to change and improve. These newly energized client teams are led by senior partners with budgets to fund them. Clients are noting these client service improvements—and the firms choosing not to make these investments—and awarding work accordingly.

Read More