Clients are poised to spend a lot more on outside counsel to tackle their litigation matters head-on. They have bigger budgets and the motivation to work off their litigation backlog — and the new matters as well. The market is set for a healthy round of spending increases on outside counsel.
Here are the 9 trends behind the remainder of this year and the 2022 litigation market.
1. Spending is increasing faster than caseloads for the first time in 6 years
Clients will spend more to deal with the surge in cases and the cases to come.
2. Increases are concentrated in key industries
4 industries show the largest increases and 2 more are strong. Just like the beginning of the pandemic — much of the growth is industry-specific.
3. Clients are back to cutting law firm rosters after a hiring surge
The hiring surge is over for now. Clients will cut their law firm rosters even while spending goes up.
4. More companies are preparing defenses as settlements become elusive
The percent of cases settled is essentially unchanged from 2 years ago. Clients are more selective about where — and if they settle. This results in clients thinking about more aggressive defense strategies.
5. Most spending is going to complex and high-risk matters
The more difficult cases are slated to get a disproportionately large part of the litigation spending on outside counsel. This means higher rates for the law firms who can prove they are worth it — spoiler alert — it’s a lot more than the number of cases a law firm tries to verdict.
6. Budget certainty is back in demand
Budgets are more important than your rate. Clients want to know the total cost of the matter before they get started. Budgets are a proxy for your commitment, risk assessment, and confidence in your approach.
7. 4 of the 8 largest segments show outsized growth
The biggest litigation segments are getting bigger. At current growth rates, employment litigation is poised to become the largest segment of litigation in a year or 2.
8. 5 industries face the most complex needs and are paying premium rates
The thorniest issues reside in a small number of industries — bring your best industry prowess to land this business.
9. 62% plan serious increases in litigation spending — targeting is key to success
It is rare to see almost 2/3 of the market increase spending. There is only a 1 in 3 chance your client is among the clients looking to work off the backlog. Talking to clients or getting feedback will help you sort this out quickly.
The good news for law firms: outside counsel spending on litigation is heading up. Expect more spending per case and more spending per law firm.
You can get all the details, and countless recommendations on how to make one of the most attractive markets in years work for you and your firm, in the just-released BTI Litigation Outlook 2022: Post-Pandemic and Beyond.
See where and how clients are spending their litigation dollars in 2022 — and the firms they think are best. Order today.