It's not your imagination. Legal business development in 2024 will be even more difficult.
in January survey According to BTI Consulting, 53% of lawyers and law firm leaders say doing business will be more difficult this year. And of the 47 percent who said they wouldn't, it's worth noting that one of their main reasons was “It's already very difficult – it can't get any harder.”
When the market feels tight, it's essential to closely monitor buyer behavior. For corporate law firms, it's about understanding what types of matters general counsels are outsourcing (and what they're not) and what firm intangibles are part of their criteria. It means understanding what is.
Let's dive in.
Budget cuts encourage in-house production and shopping around
Nearly 70 percent of general counsel are experiencing “moderate to significant” cost pressure from business leaders, according to Thomson Reuters 2024 edition. Current status of corporate legal department.
To address this challenge, 68% plan to bring more work in-house. Specifically, it includes:
- Contract: 22%
- Litigation: 16%
- Corporation: 14%
- Compliance: 9%
- Transaction: 7%
- M&A: 5%
Furthermore, nearly half (48%) say they are considering moving their work to a less expensive firm, and 22% say they are considering an alternative legal service provider. Affected:
- Litigation: 39%
- Transaction: 13%
- Contract: 11%
- Corporation: 11%
- M&A: 7%
- Compliance: 4%
Law firms that continue to work should expect more aggressive negotiations. Sixty-seven percent of respondents plan to ask for additional rate discounts, and 52 percent want alternative rate arrangements.
What this means: Litigators need to be cautious. More than half of respondents are looking for new solutions.
- For Big Law, it's time to play defense. Begin proactively reaching out to them about rates, value, and new pricing options.
- For more agile boutiques, be aggressive. We never recommend selling based on price alone, but be proactive in building your name recognition, credibility, and network.Internal departments become increasingly receptive to proposals to reduce spending. and Make their life easier.
Secondary factors are important
Beyond expertise and value, how do GCs scout and select companies?
The Thomson Reuters survey also asked which law firm characteristics matter, and how important they are. Respondents rated these as “required” for legal providers.
- Strong purpose and values: 25%
- Use of appropriate technology: 20%
- Transparency in AI use: 14%
- Diversity within the company: 14%
- Guaranteed carbon footprint: 5%
Combined with the next category, “Not a specific requirement, but considered as part of decision-making,” you can find new marketing priorities for your company. These are especially important for boutiques looking to acquire new customers in 2024, and those that may not yet be addressing these topics.
- Strong purpose and values: These are considered by 74% of in-house lawyers. Do you have a genuine and relevant statement of purpose (and can you back it up)?
- Use of appropriate technology: This is important to 72% of potential customers. Don't just list the software you use, try to show how you use it.It's draft time Case Study Demonstrates efficiency and effectiveness.
- Diversity within the company: 71% of legal teams rate companies on their diversity, equity, and inclusion efforts. Many in-house attorneys understand that your demographics may not be perfect. They want a balanced team, a purposeful approach, and an absence of red flags. From a marketing perspective, do you use inclusive language? Is your website ADA compliant? Do you have a progressive policy for your attorneys and professional staff? Are you invested in positive change?
- Transparency in AI use: This is worth paying attention to. In 2024, the importance of transparency will be 34 percent. It will probably rise further in the coming years. Expression here is important. Clients aren't mandating the use of AI, but they want to know where you stand. Decide what you will (and won't) allow, commit to it, and communicate it clearly. (When asked by the other person, american lawyer In January, approximately 30 out of 100 companies shared clear AI policies. )
- Guaranteed carbon footprint: This was noted by 34%, while Thomson Reuters notes that this is a must-have requirement for around 20% of UK-based legal departments. Adjusting the data for the US, only 20% of respondents consider this, making it a long-term issue (for now).
Once again, it feels like business development in 2024 will be a little tougher. Law firms that succeed in a more challenging environment are those that can effectively position themselves for value, either through creative offense or smart defense.person who has clearly defined brand Something that is relevant, authentic, and ownable. And those who translate concepts like “appropriate technology use” into compelling case studies that demonstrate better client experiences.
