The world’s largest companies added 8 new law firms to their rosters in 2012[1]. The typical large company uses 54 law firms, up from 46 in 2011. The additional law firms are a poignant reminder of the hyper-competitive nature of the legal market. With only 1.8% growth in outside counsel spending projected for 2013, we remain in Predator’s Paradise. Law firms are either predator or prey—and clients just invited 8 new predators into the fray.
BTI research found 48.1% of corporate clients replaced one of their 2 primary law firms in 2012—up from 38.6% in 2010—with the new work going to a firm who graduated from the secondary role. The fallen primary firm is now a secondary firm.
The predators will be treating their top clients as “markets-of-one”—developing budgets and plans to build their turf. We recommend current providers implement markets-of-one strategies before the new firms gain traction.
Down the road, clients want to use fewer law firms—but the remaining panel of firms may look different than today. Law firms can find opportunity as these new rosters unfold.
MBR & JPD
[1] Based on BTI research conducted from March 2012 to September 2012. BTI conducted more than 300 independent, individual interviews with CLOs and General Counsel at Fortune 1000 companies and large organizations.