Law firm leaders are getting their arms around 13 issues impacting their strategies — 4 dominate.

Based on the survey my longtime friend and collaborator, internationally recognized law firm consultant Patrick McKenna, and I conducted with more than 200 law firm leaders — we uncovered the top strategic issues standing in the way of law firms getting the edge they want.

The top strategic issues look like this:

Growth at 46.95% of leaders

No law firm wants to let a competitor grow in its client base. Growth is now both offense and defense. But it’s all about growing the right way — offering career opportunities for rising stars, engagement for all, an advantage in attracting laterals, better margins, and protecting market share and clients.

Lateral poaching remains the preferred method to drive growth. But law firm leaders are looking for the industries where it would be wise to double down. Despite the talk of law firm mergers picking up — most firms don’t want to see a merger as their first choice.

Generative AI at 32.65% of leaders

So many lovers and haters. These law firm leaders see Generative AI as a serious disruptor — while others see AI as something to be avoided.

A few firms will make big bets on client-facing tools. Others are betting on workflow. Only 5% of law firm leaders think Generative AI will be a big nothingburger. This contrasts with the 32.65% who think it is the defining issue. The bets are on.

Improving Culture at 26.53% of leaders

Strong and strategic culture drives success. It drives engagement, productivity, branding, client service, business development, and retention. Improving culture solves so many problems law firm leaders face. Strong cultures are also more open to change — something law firms will see more of instead of less.

Talent Retention at 26.53% of leaders

A great lateral means a lot if you are on the receiving end. A loss hurts. Just over 1 in 4 law firm leaders see retention as the top strategic issue. Retention is a first cousin to improving culture. Those leaders able to improve culture are simultaneously improving retention.

(Note: total percentages are greater than 100% as a result of multiple responses.)

Law firm leaders also point to a set of smaller but significant issues. They deserve time and attention — but most can be dealt with by solving the dominant 4. These smaller strategic issues include:

Strategy

Rate Increases

Transformation

Productivity

Every year, we ask more than 300 corporate counsel about the law firms they recommend to a peer — no name, prompts, or suggestions provided. It’s all organic. The results:

• Only 35% recommend their primary law firms to a peer — down from 69.1% a mere 4 years ago. This rivals an 18-year low.

Delivering Yesterday’s Client Service

One big contributor to the drop in client service is corporate counsel’s new expectations. Law firms targeting yesterday’s expectations are at a clear disadvantage. These new expectations include:

• Including clients early in strategy and approach
• Being trusted enough to be relied on for cost control
• Higher client service standards for their primary law firms
• Being easy to work with
• Fielding the absolute best team

All these new components make clients’ lives easier and get them to their goals. We discuss these expectations and the law firms best at each here, here, and here. But, that’s not all.

7 Reasons Why Clients Don’t Recommend Their Primary Law Firm

Our research shows corporate counsel point to 7 reasons for not recommending their primary law firm:

1. Little interest in understanding corporate counsel’s goals. Almost all the new goals are focused on advising management on transforming their business — and using it as a career booster.
2. Hard to work with. The legal prowess may be there, but the administrative obstacles are enough to ruin the most elegant of strategies. Clients point to:

• Time and effort to start a new matter
• Renegotiating rates for every matter
• Negotiating conflict waivers
• Delays between conflict clearance mobilization

3. Getting the B Team. Clients don’t know who is performing the work, some see a flurry of names on the bills. These experiences make clients think there is little thought into who is doing the work.
4. Reluctance to provide an early assessment in litigation.
5. Learning new deal strategies and structures their primary firm used from a 3^rd
6. Ghosted when their relationship partners leave the firm.
7. Don’t share ideas and strategies about current issues and problems.

Corporate counsel are busy managing their own journey while relying more on outside counsel than at any other point in the last 23 years. BTI research reveals that 67% of corporate counsel are busy helping pave their company’s path for transformational change. They want advice and advanced thinking — and excellent client service depends on law firms meeting today’s and tomorrow’s expectations.

These firms are making a bet.

They are betting investments in client service in a perceived fragile market will deliver immediate and lasting value — both strategic and financial.

Only 64 law firms managed to improve client service performance in 2024 — according to corporate counsel. This equates to just shy of 10% of all law firms. And client service still remains the biggest differentiator among law firms.

One key driver — corporate counsel have new roles and responsibilities. They don’t announce their new goals — they simply change their behavior. Only the firms with keen institutional eyes and ears pick up on these new objectives. These 64 firms are amping up on both counts.

Please join me in congratulating the most improved law firms in client service performance for 2024: