According to the latest Bellwether report “Bold Ambitions?” released by LexisNexis Legal & Professional®, a global leader in legal information and analytics, small law firms are adjusting their growth strategies, focusing on steady and sustainable expansion alongside client retention.
The report reveals that 46% of surveyed firms expect growth in the next 12 months, while 38% anticipate maintaining stability. Unlike previous years, there is a stronger preference for organic growth rather than mergers, with a significant emphasis on investing in business support functions.
Debbie Sumner, Go-to-Market consultant at LexisNexis, explained the shift in sentiment, saying,
“The previous Bellwether survey was conducted during the post-lockdown legal boom and before the cost-of-living crisis, so this change in attitude is understandable. Many firms are focusing on growing revenue organically, which will be the prevailing theme of the year.”
The report highlights that most firms aim to achieve growth by acquiring new clients and increasing business with existing clients. Only 13% of respondents plan to pursue growth through mergers or acquisitions, marking a decline from 16% in 2022 and 15% in 2021. However, attracting new business remains a significant challenge for 81% of respondents.
Investment priorities align with the focus on organic growth, as 81% of firms plan to increase investment in marketing and 88% in business development in 2023. The data suggests that a retention strategy is viewed as prudent, with 88% of respondents feeling their firm enables them to provide a good service to clients. Despite this, 79% of participants expressed concerns about client retention.
Interestingly, while firms plan to allocate more resources to marketing and business development, the adoption of new technologies to enhance the lawyer and client experience is lagging. Only 24% of firms intend to implement new technology in the next 12 months, choosing to maintain existing systems instead. However, the report indicates a strong desire for legal intelligence technology, with two-thirds of firms utilizing free and paid digital legal research tools and legal practical guidance.
Read the report here.
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