LexisNexis Bellwether report: small law firms prioritise sustainable growth and client retention
46% of firms expected to grow over the next 12 months, with 38% expecting to remain stable. Rather than merging, there is a strong desire to grow organically, with investment in business support functions.
Today, LexisNexis Legal & Professional, a leading global provider of legal information and analytics has released their latest Bellwether report entitled “Bold Ambitions?”. It reveals that, whilst there is a desire for growth, the industry is less bullish than it was in 2021 when 66% predicted growth.
“The previous Bellwether surveyed the legal market during the post-lockdown legal boom and prior to the cost-of-living crisis, so this shift in sentiment is understandable,” says Debbie Sumner, Go-to-Market consultant at LexisNexis. “Organically growing revenue will be the theme of the year for many firms”, Sumner continued.
When it comes to achieving growth, the Bellwether report reveals that most firms hope to acquire new clients and increase their business with existing clients. Only 13% of respondents said they plan to grow through Mergers or Acquisitions, a drop from 16% in 2022 and 15% in 2021. An easy plan in theory, but 81% said that attracting new business is going to be one of their top challenges.
This focus on organic growth is reflected in firms’ investment priorities. In 2022, only 24% of firms planned to increase investment in their marketing. In 2023, an incredible 81% of firms now plan to increase investment in marketing and 88% in business development. The results suggest that a strategy of retention is sensible. 88% felt that their firm enabled them to offer a good service to clients – which might help to balance the fact that 79% of respondents were concerned about client retention.
However, this investment in business development seems to be at the cost of implementing new technologies to improve the lawyer and client experience. Only 24% plan to implement new technology over the next 12 months, choosing to maintain systems rather than upgrade. Yet – a desire for legal intelligence technology was strong, with two-thirds making use of free and paid digital legal research tools and legal practical guidance.
