The 21 Biggest Takeaways from BTI’s Annual Market Outlook and Client Service Review

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So many lessons, so many questions; but so little time. Here is a recap of our 10th annual BTI Market Outlook and Client Service Review. We would like to thank the 1,682 individuals who joined us and appreciate all the feedback—especially considering how much client feedback we develop for our clients. Here are the highlights:

Uncertainty is the biggest driver in the market today. It is the reason clients are:

  • Increasing spending in outside counsel

  • Cutting corporate counsel’s internal spending

  • Demanding more engagement from their law firm

  • Ramping up RFPs

  • Paying higher rates for complex work while applying unrelenting rate pressure on their standard work

Where the Growth Is by Industry and Practice

  • High Tech boasts 9 practices with premium needs and growth—more than all others

  • Health Care, Pharma, and Insurance (non-defense) show 7 premium practice opportunities each

  • Energy and Financial service see premium needs in 6 practices

  • Telecom, Transportation, and Professional Services have the fewest premium needs

  • Demand for Cybersecurity, M&A, and Private Equity leads the growth charge with IP Litigation, Class Actions, and Regulatory close behind

The BTI Client Service 30 are using these new strategies across their client base:

  • Tapping into their largest clients’ needs through client feedback and customization

  • Pinpointing clients’ risk before they do

  • Developing tools for clients to better manage and identify risk

  • Helping clients manage uncertainty

  • Becoming more aggressive in business development

The Most Innovative Law Firms

  • Hail mostly from The BTI Client Service 30—suggesting client service gives you a better on-ramp to the most compelling client innovation and technology needs

  • Tackle the most basic needs—such as historical document access and performance indicators—with scale across the client base

  • Customize technology solutions for their largest clients

  • Ask clients about their specific needs and then build out solutions to meet these needs

Changes in Client Service Expectations

  • Your ability to deal with complexity is now a part of client service—the 17 activities clients use to evaluate law performance and hireability

  • You can’t fully understand risk without understanding your client’s business

Again, this is a brief recap, watch the full recording here to gain vital insights for your firm.

The law firms delivering on all these demands across the client base are outperforming all others. This shows consistency, ability to scale, and your commitment to help—the most influential aspect of client service.

You can use these insights to improve your performance tomorrow. No law firm on the planet can tackle all these demands and changes at once, but you can prioritize, reallocate resources, and focus on the ones which make the biggest difference. You are best served by picking a small number of high-impact tactics for your firm—and scaling across clients. Rogue acts of greatness can’t compete with systematic excellence.

MBR

12 Top Trends Defining the 2019 Legal Market

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Buckle up. It’s going to be an exciting ride. Clients are spending more money on outside counsel than ever. Top legal decision makers are redefining their approach to hiring and managing their law firms. This translates into direct opportunity.

But you will find the biggest wins by targeting your client’s new needs and hiring plans, focusing on the industries where you can win, and getting there before other law firms. Please use these top trends to your immediate and lasting advantage—and join us for the BTI Market Outlook and Client Service Review 2019 where we will discuss these and much more:

  1. Cybersecurity leads all outside counsel spending increases at 9%

  2. M&A spending closely follows Cybersecurity in planned outside counsel spending increases

  3. The number of clients reporting high-stakes matters more than doubled in the last 18 months

  4. Complexity and uncertainty dominate client thinking

  5. Clients are settling less than half as many cases as 2 years ago—increasing risk and outside counsel spending

  6. Clients are cutting internal budgets to fund increasing use of outside counsel for the 3rd straight year

  7. Top legal decision makers are hiring more new law firms than ever to find the firms who can meet their needs

  8. High tech clients plan to increase spending in 9 major areas

  9. Health care clients plan to increase spending in 7 major practice areas

  10. Pharma plans the 3rd largest outside counsel spending increases of all industries

  11. Clients now look for law firms who can scale into teams quickly to manage cases, which could become large or attract other matters—these teams can come from small, medium, and large firms

  12. Clients are most impressed by law firms using technology to provide core information (i.e., updates, budgets, access to current and historical documents)

Match these trends up against your business plans. These opportunities are here now and finally big enough to drive strategic growth in law firms. We have all been waiting for the market to return to the good old days—this is the closest we have seen in a long time.

Please join us for our annual webinar BTI Market Outlook and Client Service Review 2019 on January 17, 2019 at 12:00 pm ET to discuss these trends and much more. You can also learn about these and more detailed trends and opportunities in BTI’s report BTI Practice Outlook 2019, available immediately.

Best in the market ahead and a happy, healthy new year!

MBR

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.)