Stability, investment and organic growth are the order of the day rather than the riskier strategy of merger and acquisition, the report, ‘Bold ambitions?’, found. Instead of re-invention, small firms are focusing on acquiring new clients or expanding the work they do for existing clients. Only 46% of firms expect to grow in the next 12 months (compared to 66% of those surveyed in 2021), with 38% expecting to remain stable.
‘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.’
In order to achieve growth, firms are embarking on a major marketing push. 81% cited attracting new business as one of their top challenges. This is clearly reflected in their investment priorities—in 2023, an incredible 81% of firms plan to increase investment in marketing (compared to only 24% in 2022), and 88% intend to boost investment in business development.
In contrast, less than a quarter intend to implement new technology in the next 12 months.
The research, conducted among 169 solo and smaller firms, found small firms leading the way when it comes to flexible billing and tailoring fee options to fit the client rather than the firm. The overwhelming majority—92%—offer flexible payments such as fixed, capped or flat fees (a mere 8% charge exclusively by the hour). The report highlights that this is ‘drastically different’ from the wider market—a 2021 survey by tech firm BigHand found alternative fees were offered by just 43% of firms with 100 or more fee earners.
Geraldine Morris, a family law practitioner before moving to head up LexisPSL Family, says smaller firms are offering ‘more creative funding solutions… with “pay as you go” or “unbundled services” more commonplace’.
The 2023 Bellwether survey report, published this week by LexisNexis, is available here.
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