Key insights:

• • • AI can help lawyers prepare better, more relevant client conversations 鈥� AI鈥檚 real value lies in synthesizing news, regulatory updates, client activity, and relationship data so lawyers have timely, tailored insights that make outreach easier and more meaningful.

    • AI works best as a foundation for client discussions, not a script 鈥� Panelists at a recent Forum repeatedly stressed that AI-generated briefs and opportunity matrices should only guide lawyers, but authenticity, experience, and interpretation are still what make client conversations effective.

    • Firms must actively and clearly talk to clients about their AI capabilities 鈥� Clients increasingly expect AI-savvy law firms, and those that can confidently explain how AI improves their service offerings while keeping humans at the center will stand out, while silence or vague messaging is a missed opportunity.

AMELIA ISLAND, Fla. 鈥� During the 成人VR视频 Institute鈥檚 recent听33rd Annual Chief Marketing & Business Development Officer Forum听(formerly the听Marketing Partner Forum), one concept became clear very quickly: When it comes to AI in law firms, the technology itself isn鈥檛 the hard part anymore. The real challenge 鈥� and the real opportunity 鈥� is how firms use AI to deepen client relationships and, just as importantly, how they talk to clients about what they鈥檙e doing.

Indeed, more than three-quarters of respondents (77%) say they believe law firms should take the initiative to begin these talks with clients around AI usage, according to the recent 成人VR视频 Institute鈥檚 2026 AI in Professional Services Report.

Across multiple Forum panel discussions, speakers returned again and again to the same idea: AI is becoming a powerful business development engine, but only if lawyers and law firm business development teams are willing to use it proactively and communicate its value in human terms.

AI as an assistant, not a replacement

One of the most practical discussions that arose during the Forum centered on using AI to make client outreach less painful and more effective. Too often, panelists contended, senior lawyers often don鈥檛 send regular client notes 鈥� but it鈥檚 not because they don鈥檛 care. These notes get put on the backburner because crafting them takes time away from billable work and is hard to prioritize.

You can find out more about next year鈥檚 Chief Marketing & Business Development Officer Forum 2027听here

Several panelists talked about how AI can change that equation by pulling together information from news coverage, regulatory developments, earnings calls, relationship data, and even what clients are actively reading. Instead of staring at a blank page, partners can walk into a meeting or send a note armed with relevant, timely insights that actually matter to the client, they explained.

鈥淲e can plant things in our lawyers鈥� and partners鈥� minds to move the needle with clients so they can open conversations with clients that will make a difference,鈥� said one panelist.

Of course, the point isn鈥檛 to automate relationships, rather it鈥檚 to give lawyers a smarter starting point 鈥� a short list of clients to contact, paired with concrete conversation openers that feel tailored rather than generic. 鈥淭hose conversations and what results from those conversations will be revolutionary for your firm,鈥� the panelist added.

Another theme that resonated at the Forum was the idea of matching client needs with firm capabilities in a much more structured way. AI can help generate documents that clearly show what a client is dealing with and where the firm can help 鈥� essentially an opportunity matrix that鈥檚 built from real data.

Strong need for lawyer training around AI

Several speakers were quick to stress, however, that this doesn鈥檛 mean that AI should be left on autopilot. The best results come when firms train their partners before client meetings, using AI-generated briefs as a foundation, not a script. That balance 鈥� between automation and authenticity 鈥� came up repeatedly throughout the Forum. As several panelists described, AI can bring insights to the surface, but lawyers still need to interpret those insights, contextualize them, and deliver them in a way that feels personal.

鈥淎I might get you 90% of the way there, but that last 10% still depends on human judgment, experience, and relationship skills,鈥� said one law firm technology specialist.

Indeed, if there was one clear takeaway from the Forum, it鈥檚 that AI adoption rises or falls on training. Not broad, one-size-fits-all sessions, but bespoke, one-on-one training that shows lawyers exactly how AI helps them prepare for client conversations. Indeed, several panelists argued that it is essential that firms educate their attorneys on how to use these tools effectively or give them very specific guidance 鈥� anything less will lead to hesitation, confusion, or outright resistance.

Of course, the problem is that AI adoption isn鈥檛 waiting for everyone to catch up. As one speaker noted, the train is already leaving the station, and those firms that fail to bring partners along 鈥� especially by showing clear, practical benefits of AI use 鈥� risk falling behind quickly.

In fact, several panelists discussed how the excitement around agentic AI is real, but so are the risks. They warned against assuming these more advanced tools are smarter or more autonomous than they really are. In fact, AI agents are still constrained by the data and tools they鈥檙e given, and a flawed understanding at the leadership level can lead to poor decisions and misplaced expectations.

That said, business development was repeatedly described as an ideal starting point for experimenting with agentic AI. The workflows are less rigid or high stakes than agentic use for legal work, the feedback loops are faster, and early wins are easier to spot.

Talking to clients about AI matters

Overall, perhaps the most important takeaway from the Forum wasn鈥檛 technical at all. It was strategic.

Because clients are increasingly expecting their law firms to be AI鈥憇avvy, firms have to be proactive in their response. Firms have to not just be using AI internally, but understanding how the technology improves their service, efficiency, and insight. Those firms that can clearly and confidently explain to their own partners and clients how AI supports their best efforts 鈥� and where humans still play a critical role 鈥� will stand out. Staying silent about AI, or worse, being vague and generic about its value, is a missed opportunity, several panelists explained.

Those law firms that thrive, especially around business development and client service, will be the ones that treat AI not as a back-office experiment, but as a client-facing capability 鈥� something to be discussed openly, thoughtfully, and authentically.

You can read the full听Executive Summary of the 成人VR视频 Institute鈥檚 33rd Annual Chief Marketing & Business Development Officer Forum听here

Register below.

Notes from previous attendees

“From the quality of the content to the caliber of colleagues in legal marketing and business development, this is one of the standout events I look forward to every year.” 鈥� Ian Ribald, Chief Business Development & Marketing Officer, Willkie Farr & Gallagher LLP

“2024 was my first time at the CMBDO Forum鈥攁nd as we wrapped up, I knew it wouldn鈥檛 be my last. Connecting with peers, sharing real stories, and learning from their experiences was invaluable.” 鈥� Oliviana Mingarelli, Head of Marketing and Business Development, Fasken Martineau DuMoulin LLP

Key points:

• • • Southwest strength spans all practices 鈥� Firms in this region show balanced growth, with labor, litigation, and M&A practices leading the way.

    • Southeast signals dual priorities 鈥� Transactional practices such as corporate and real estate remain strong, while bankruptcy is becoming increasingly relevant.

    • Tailored strategies and flexibility drive success 鈥� Firms that align with regional strengths while remaining adaptable to shifting economic conditions may be best positioned to thrive in an uncertain future.

Despite persistent economic and political instability in the United States, law firms are demonstrating remarkable resilience. The 成人VR视频庐 Institute鈥檚 Law Firm Financial Index (LFFI) climbed to 63 points the third quarter, signaling stronger-than-expected performance across the legal industry. This increase reflects a surge in demand, particularly among transactional and counter-cyclical practices, even as broader market volatility continues to raise concerns.

While the overall story for law firms is one of growth, further insights lie beneath the surface, especially in the regional variations that reveal how different parts of the country are responding to the current uncertainty. Two regions, in particular, stand out for their contrasting yet equally compelling narratives: the Southwest and the Southeast.

The Southwest: A model of stability and counter-cyclical strength

The Southwest region of the US has emerged as a beacon of growth in an otherwise uneven market. It is the only region that did not experience contraction in any major practice group in Q3, a remarkable achievement given the economic backdrop. This broad-based strength suggests that firms in the Southwest could be benefitting from a unique combination of factors, including geopolitical ripples and robust client demand across multiple sectors.

Labor & employment practices have experienced a notable upswing. This surge reflects the heightened complexity of workforce issues during times of uncertainty, from regulatory compliance to disputes over layoffs and restructurings. Litigation similarly continues to strengthen, underscoring the strength of counter-cyclical practices in this part of the country.

The mergers & acquisitions practice also has shown remarkable momentum, signaling that businesses in the Southwest are not shying away from strategic transactions despite broader economic challenges. In fact, this resilience may reflect structural and political dynamics. Southwestern states 鈥� often aligned with pro-business policies 鈥� could be benefiting from preferential treatment under an administration that favors red states over blue states. Such advantages may translate into stronger economic performance and, consequently, increased legal spending in transactional practice areas.

The Southeast: Transactional momentum amid signs of stress

The Southwest, on the other hand, reflects a narrative of steadiness, as the region maintains a consistent performance across key practice areas. For example, bankruptcy has emerged as a key area of growth in the Southeast, making this region unique in showing increased activity in insolvency matters.

This duality 鈥� strong corporate and real estate activity alongside rising insolvency work 鈥� highlights the complexity of regional economic conditions. For law firms, it also underscores the importance of maintaining a balanced portfolio of practices to allow them to navigate both opportunity and risk.

The Southeast鈥檚 performance also raises questions about the durability of its transactional momentum. Will corporate and real estate growth continue if bankruptcy trends accelerate? Will bankruptcy demand decline? These are critical considerations for firm leaders in this region as they make strategic plans for the months ahead.

Regional divergence and its implications

The contrast between the Southwest and Southeast illustrates a broader truth: Regional dynamics matter, while national averages can obscure the localized realities that shape client demand and law firm performance. In the Southwest, the absence of contraction across any of the major practices suggests a level of economic resilience that other regions may struggle to match. In the Southeast, the coexistence of transactional strength and financial distress may indicate a more volatile environment in which opportunities and risks are closely intertwined.

For law firms, these patterns carry significant strategic implications. Firms operating in the Southwest may prioritize investments in labor & employment and litigation capabilities to sustain counter-cyclical strength, while continuing to capitalize on M&A opportunities. In the Southeast, firms may need to adopt a dual strategy 鈥� supporting transactional practices while expanding expertise in bankruptcy and restructuring to meet rising demand. It鈥檚 critical to note that current growth patterns do not guarantee long-term demand.

Navigating an uncertain future

As law firms plan for the next quarter and beyond, the question is not whether regional differences will persist but how firms can best adapt to them. Continued economic and political volatility could sustain demand for counter-cyclical practices nationwide, while transactional activity may fluctuate based on business confidence and capital availability.

Those law firms that succeed will be those that embrace agility and regional specialization. Understanding local economic drivers, anticipating shifts in client needs, and aligning resources accordingly will be critical.

You can download a full copy of the 成人VR视频 Institute鈥檚 Q3 2025 Law Firm Financial Index here

Indeed, according to panelists at the 成人VR视频 Institute鈥檚 32nd annual Marketing Partner Forum, held in late-January, securing the buy-in may be a more difficult task than actually getting the financial resources needed to undertake the new initiative.

Today, many law firm leaders are most worried about addressing their firm鈥檚 talent issues and trying to mitigate any potential revenue loss, one panelist said. However, that does offer firm marketing professionals and opportunity 鈥� if they can focus management鈥檚 attention on these worries, it may be easier to make a case for an investment in tech innovations or client programs to alleviate some of these concerns.

鈥淔ear and risk mitigation are powerful ways to convince firm management to act,鈥� the panelist explained.

Firms seem eager to invest in tech

In fact, according to recent data, law firm leaders already may be getting the message about the necessity of investing in advanced AI-driven tech solutions to improve workflow efficiency and leverage data for better decision-making. Tech spending by law firms has been on the rise, growing at a historically high rate of 9.4% at the end of 2024, with a notable year-end acceleration coming in the last month of the year.

According to the recent 成人VR视频 Institute鈥檚听2025 Report on the State of the US Legal Market, many law firm leaders see tech investment as a way to gain an advantage with clients in a highly competitive legal market. And as clients increasingly expect the integration of tech solutions in the work of their outside law firms, law firms are feeling the pressure to invest heavily in data infrastructure and AI tools, even given the increasing costs of development and maintenance.

While many legal market experts 鈥� and more than a few at the Forum event 鈥� expect tech spending to continue to increase as generative AI (GenAI) investments become non-negotiable for law firms, the path to getting the rest of the firm on board with these investments, especially around adopting the new technology and properly training lawyers and staff to use it, is daunting.

Still, as is evident by the numbers, many law firms are gearing up to explore new AI-driven tools to help their lawyers and staff in a myriad of ways 鈥� from conducting legal research, crafting documents, leveraging matter management, and engaging in predictive analytics. Yet, in addition to the considerable capital investments, as well as the costs of maintenance and training, firms may also need to spend sizeable sums to optimize and maintain their data in order to capitalize on the potential benefits of GenAI.

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And that鈥檚 all before you get to securing the necessary buy-in from your team.

Indeed, many a firm has seen its investment in the latest tech tool or client management platform wreck on the rocks of lawyer indifference or outright hostility to the way their workflow will need to adapt to make best use of the new innovation. And that, as many panelists pointed out, is just one of the problems.

鈥淵ou also have to rapidly adapt to lawyers鈥� refusal to cede territory,鈥� said one panelist at the event. 鈥淭oo many lawyers want to be 鈥榯he only salesman鈥� and the only one having any interaction with key clients, which can make creating a new client program very difficult.鈥�

How to secure the buy-in

Many panelists at the Forum had their own success stories in how to best secure the needed buy-in, especially from top lawyers. For example, one panelist suggested framing the investment in new tools, programs, or data initiatives around an insistence to act on it. 鈥淵ou need to create scarcity, or a FOMO [fear of missing out] in managers鈥� minds,鈥� the panelist said. 鈥淵ou need to make them afraid to not act.鈥�

Another panelist suggested that marketing and business development professionals pitch new initiatives as a need to follow what the firm鈥檚 biggest clients are doing in order to remain competitive. 鈥淲e looked at creating a client program with a careful eye on which clients fit the program and which didn鈥檛,鈥� said the panelist. 鈥淎nd we were able to move forward on it by positioning it was a way to use the program as a proving ground for client strategy plans that we could then take further down our client list and increase our work with those clients.鈥�

鈥淔ear and risk mitigation are powerful ways to convince firm management to act.鈥�

For lawyers, the strategy may be a little different. One panelist recommended that when trying to get lawyers on board with new tech innovations or client management programs, you should stress the innovation鈥檚 expanded ability to create opportunities, especially those that will help lawyers interact and engage with clients. 鈥淲e wanted to help our lawyers find the micro-actions that can allow them to see what their clients are doing,鈥� the panelist said. 鈥淵ou have to help them put two and two together and really see how it benefits them without placing a lot more work on their plate.鈥�

Another Forum participants urged taking the long view and seeing securing the buy-in as a process. 鈥淭ake small steps 鈥� get one meeting, get small wins, and foster a coalition of the willing,鈥� the participant said. 鈥淒on鈥檛 let naysayers derail it, and don鈥檛 name the program 鈥� just do the work.鈥�

Once the early work is done and some small wins have been wracked up, it鈥檚 much easier to move on to the next critical step of developing ROIs to show management how to pursue the most profitable areas. 鈥淎nd don鈥檛 let the perfect be the enemy of progress,鈥� she explained. 鈥淲ork with what you have and show success early 鈥� that really helps.鈥�

And never forget, the participant continued, you have to bring the lawyers around. 鈥淪ome lawyers will be uncomfortable with the tech and AI, but they still have to be brought in. Just sell it internally, whet the lawyers鈥� appetite, and then bring them along for the ride.鈥�

Always remember, she added, you eventually have to draw a line to revenue, because that makes the world go around.

You can find out more about听recent Marketing Partner Forum events听here

鈥淭he key question 鈥� not just for marketing purposes, but for law firms鈥� overall success 鈥� is what is your firm鈥檚 data strategy? What is its structure?鈥� asked one panelist at the recent 成人VR视频 Institute鈥檚 32nd annual Marketing Partner Forum, held in late-January. 鈥淗ow best can your firm cut through the clutter and getting to what your clients really want to talk about.鈥�

Indeed, panelists went through numerous impactful ways that law firms can leverage their internal data to refine their marketing strategies, including by collecting and analyzing information about past and current clients and identifying common characteristics among them, which could enable more personalized marketing campaigns and engagement. Firms can also build out case studies and success stories using their own internal data that can be highlighted on the firm鈥檚 website, shared on social media, or used directly in client proposals.

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Also, running the data on firms鈥� performance metrics around various marketing campaigns 鈥� determining such key indicators as email open rates, website traffic, and conversion rates 鈥� which can help optimize future campaigns for better results. Overall, panelists discussed how by effectively using their own internal data in these ways, law firms can create more targeted, efficient, and impactful marketing campaigns that attract and retain clients, enhance the firm鈥檚 reputation, and ultimately drive growth.

鈥淓ven those law firms that don鈥檛 have a lot of time or money can still get insight and value out of analyzing their data,鈥� one panelist said.

Understanding what you have in your data

Ideally, this requires marketing professionals to look at their firm鈥檚 data more holistically, before deciding what client-centric data could be used to help lawyers in writing pitches and engaging with clients, several panelists explained. 鈥淭he best data is that which gets looked at and understood,鈥� offered one panelist, adding, however, that many law firms simply aren鈥檛 there yet. 鈥淐learly, so many firms are still struggling with the use of their own data,鈥� the panelist noted. 鈥淚t is daunting 鈥� however, data will take you farther down the road than you would have gotten with index cards in a recipe box.鈥�

Several panelists described their own experiences with trying to wrestle their firm鈥檚 data into a structure that could be leveraged to provide marketing and business development professionals 鈥� and by extension, the firm鈥檚 lawyers 鈥� with the insights and understanding to more effectively pitch work or write the kind of proposals that will get clients鈥� attention.

鈥淭he best data is that which gets looked at and understood… Yet so many firms are still struggling with the use of their own data.”

鈥淲e looked at our data overall and saw what worked and what didn鈥檛 work,鈥� another panelist explained, adding that this data included the RFPs the firm won, the ones it didn鈥檛, the business mandates it received, and the situations in which it lost out to other law firms or legal service providers. 鈥淎nd once we looked at the data we had, we had to figure out what we should do with it. There were a lot of expectations and challenges right off the bat.鈥�

Very quickly, however, once a firm is involved in the data retrieval and analysis process, other questions rise to the surface. 鈥淵ou need to draw up a roadmap for innovation,鈥� a panelist explained. 鈥淎nd that means taking inventory of the data you have, no matter what form it is in, and then examining who within the firm uses what and how it鈥檚 being used.鈥�

For example, using data for client mapping can reveal key touchpoints and areas where clients may drop off, become disengaged from the firm, or worse yet, take their business elsewhere. By leveraging internal data, panelists said, the insights gained can be used to enhance the client experience, from initial contact to matter resolution, and ensure a smoother and ultimately more satisfying process.

Getting the data in front of people

Of course, one of the primary ways to make all this work is collaboration among the parts of a law firm that touches the data as it makes its way to utilization. 鈥淭he key to collaboration is that you all have to speak the same language 鈥� those that collect the data, own the data, and ultimately use the data. And there is a lot to do to make kind of collaboration happen.鈥�

Yet, firms that undertake this process can see benefits immediately. 鈥淲e needed to create a plan that would keep our data strategy in front of people,鈥� explained another panelist. 鈥淎nd one thing we found right away was that we could cut down on the number of meetings we had by using more actionable data that team members could follow up on.鈥�

While clearly, an AI-driven examination of the characteristics of successful work pitches, for example, could be quite useful, one panelist explained that their firm saw almost right away that it had too few professionals who could analyze this data in that way. 鈥淲e saw that data cannot be a side-project, rather there has to be someone in a role that manages it, whether that鈥檚 within the practice innovation team or somewhere else, someone has to own this data,鈥� the panelist said.

鈥淭he need to solve for the disconnect between data that offers insights and those business development professionals who may be uncomfortable bringing this to lawyers is crucially important.”

To solve this problem, many law firms make the mistake of simply creating data positions often using those existing team members who may be more data-inclined; but it鈥檚 actually more important to bring on a data specialist 鈥� whether internally or through outsourcing 鈥� because someone has to have the knowledge and skill to interpret the data and guide against any misuse.

Then, panelists explained, comes perhaps the most difficult, yet potentially rewarding, challenge: Once you have identified and collected the data and used it to identify critical insights, you have to make sure the firm鈥檚 lawyers will accept and use what you鈥檝e found.

鈥淭he need to solve for the disconnect between data that offers insights and those business development professionals who may be uncomfortable bringing this to lawyers is crucially important, as is making sure your lawyers have a way to discuss these insights and opportunities with clients,鈥� another panelist offered. 鈥淎ll of this has to be brought through, ultimately to sales, for the use of your firm鈥檚 data to be considered a success.鈥�

And as advanced AI-driven tech evolves, it will become more important for lawyers to have the skills to use this tech themselves, which will allow them to see first-hand the interactions, the engagement, and the opportunities. 鈥淭hat will be the ultimate test 鈥� when lawyers are using these data-driven insights themselves to improve their clients鈥� experience, that鈥檚 the win.鈥�

You can find out more about听recent Marketing Partner Forum events听here

In the panel, which dealt with talent retention and attraction issues, panelists explained that firms鈥� marketing partners and their teams are seeing their roles become more critical for attracting and retaining talent through deliberate efforts involving messaging, branding, and storytelling. 鈥淢arketing partners need to be creative and offer ways to tell their firms鈥� stories by connecting the dots throughout their firms,鈥� one panelist said, adding that hiring, integration, and on-boarding of new employees are the key areas where this can take place.

As compensation levels have challenged some firms to keep up, the legal industry overall also is experiencing much less stickiness since the global pandemic, one panelist noted, and this is creating an environment in which many legal professionals are looking to move to other firms.

Marketing partners need to be creative and offer ways to tell their firms鈥� stories by connecting the dots throughout their firms.

Other panelists agreed, stressing that it鈥檚 important for firm recruiters and marketing professionals to understand the motivations of their prospective hires in seeking out a move in the first place. Indeed, one panelist noted, underlying the lateral hiring process is the critical question of why do talented people in the legal industry move? 鈥淭hese firm professionals need to understand this motivation on a personal level and create a narrative around the firm that helps bring top talent over,鈥� another panelist offered.

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Surveys over the years have shown that compensation isn鈥檛 traditionally the main reason for a move, often ranking behind such factors such as feeling underappreciated and a lack of progression. In fact, a firm鈥檚 focus on these other factors 鈥� along with other considerations such as professional well-being, mentorship, flexible working arrangements, and improved work culture 鈥� can create an overall environment that is far more conducive to fostering higher satisfaction among lawyers who then in turn will want to stay at the firm, resulting in the kind of stickiness that has faded from the legal industry since the pandemic.

Not to mention that fostering a work culture that promotes higher satisfaction among its professionals is a much less expensive proposition than paying increasingly higher salaries each year.

Telling your firm鈥檚 story

The panel also observed that it is this internal conflict of feeling underappreciated or not being valued 鈥� whether the feeling comes from brand or origination issues or from problems with management or personnel 鈥� that is critical for firms鈥� marketing professionals to understand. And this is important not only to improve recruitment of top legal talent to the firm, but to mitigate any outward migration of the firm鈥檚 own top talent. 鈥淲hatever the cause that results in lawyers not feeling valued, that feeling is often at the heart of their leaving,鈥� one panelist explained.

A key part of solving this question of why is being able to tell the firm鈥檚 story and leveraging that information to improve recruitment and retention, the panelist added.

Another panelist explained that she saw marketing budgets going up across the board because many new hires are insisting on a level of marketing support that they were missing in the places they left. 鈥淎nd that means that firms need to ask themselves, 鈥楧o we have a marketing team ready and deployed to support our partners?鈥欌�� she asked.

Other panelists agreed that while platforms and support are important, it is the ability to tell the firm鈥檚 story that will determine success much of the time. The panel stressed that those marketing and recruitment professionals who use their resources and cite real-world examples and real-life numbers 鈥� such as examples of past hires or laterals who then thrived at the firm 鈥� often see those factors make a greater impact.

For example, one panelist described how their own firm 鈥� using its own data around previous legal talent hires made over the past decade 鈥� determined which individuals succeeded and what particular attributes those hires had. The firm then was able to go into the market for new hires with a clear blueprint for what kind of talent would best thrive at the firm. In this way, the firm saw some clear strategies it could enact to increase the chances that any new hires would thrive at the firm, the panelist explained. 鈥淲e saw that if we immediately kept new hires engaged in work and didn鈥檛 lose sight of giving new and younger talent a voice in the firm, that we were better able to create that glue that keeps our talent satisfied,鈥� the panelist said.

Another panelist agreed, adding that integration during the on-boarding process is also key. 鈥淔irms should look for organic situations in which to place new talent to help them find those opportunities within the firm,鈥� the panelist noted, adding that law firms need to invest in their marketing professionals to enable them to tell their firms鈥� story. 鈥淓quipping the messengers to be the hands and feet of the organization brings the brand to light,鈥� she said. 鈥淪torytelling is the key.鈥�

Many on the panel agreed that the role of law firm marketing professionals in talent matters is not something that just happens upon hiring but should continue throughout any new hires鈥� tenure with the firm. 鈥淚t鈥檚 important for the firm to remember why this or that particular person was hired in the first place,鈥� one panelist said. 鈥淎nd it鈥檚 not just about whether new hires are meeting expectations or are meeting their metrics 鈥� rather, it鈥檚 about whether we, as a firm, are meeting their expectations that we set out when they were hired.鈥�

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On one side of this split are those law firms and corporate law departments that are successfully using ALSPs for a wide variety of work; and on the other side is a segment of the market that has yet to reach that level of comfort and shows little inclination to do so, with just 5% these firms saying they will use an ALSP in the next year.

Jump to 鈫�

Alternative Legal Services Providers 2025 Report

To study this divergence more deeply, the 成人VR视频 Institute 鈥� in partnership with the Georgetown University Law Center on Ethics and the Legal Profession and The Professional Service Firms Group at Said Business School at the University of Oxford 鈥� have produced the latest edition of their biennial Alternative Legal Services Providers report.

As the 2025 report shows, avoiding ALSP use may be a risky strategy for law firms, as corporate law departments anticipate shrinking spending with these more traditional firms. For ALSPs themselves, it suggests that future growth may be more likely to come an expansion of services offered to existing customers, rather than enrollment of new customers.

The new report also identifies a potential wildcard within this market: generative AI (GenAI). In the short term, ALSP leaders said they believe their use of GenAI could make them more attractive partners to both law firms and corporate law departments 鈥� and for now, their clients tend to agree. But some law firm leaders, traditionally cautious in their technology investments, said they believe that in the longer term, their own use of GenAI will surpass that of ALSPs.

Key findings in the report

Some of the most important revelations in the report include:

Strong growth 鈥� The ALSP market continues to grow quickly. The estimated size of the ALSP market is $28.5 billion as of 2023, with a compound annual growth rate of 18% from 2021 to 2023.

ALSPs prove their value 鈥� The business model and expertise of ALSPs is becoming increasingly clear. Law firms that have set up their own ALSPs are more likely 鈥� not less likely 鈥� to engage independent ALSPs. Among both law firms and corporate law departments, ALSPs get particularly high marks for their specialized expertise, cost-efficiency, and ability to manage high-volume tasks.

Increasing comfort levels 鈥� As corporate law departments become more comfortable with alternative delivery models, they expect to increase spending with ALSPs, particularly in areas such as legal managed services and software. And law firms that use ALSPs are also moving to more fully integrate them into their practices. Among corporate law departments that use ALSPs and have panels, 45% include a law firm-affiliated ALSP on their panel, and 25% include an independent ALSP.

A short-term boost from GenAI 鈥� Some 35% of law firm respondents and 40% of those from corporate law departments said that ALSPs that are leaders in the use of GenAI are more attractive, as they expect these providers to be able to cut costs and streamline processes. The long-term picture is less clear, as both law firms and corporate law departments expect to ramp up their own use of GenAI.

In addition to ALSP market鈥檚 strong and steady growth through 2023, the Alternative Legal Services Providers 2025 report finds that legal services buyers expect to increase their spending with ALSPs. Among law firms, 40% expect to increase their use of independent ALSPs in the next year, while only 1% expect to decrease such use. And 16% of corporate law departments plan to spend more with independent ALSPs, while only 4% say they鈥檒l spend less.

These projections may even underestimate the strength of the market, as ALSPs have historically been successful at introducing new services. Interviews with ALSP leaders indicate that this innovation will continue, potentially spurring more spending on the part of corporate law departments.

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The strong demand and rate growth in 2024 was accompanied by expense growth that remained high by historical norms, although it has cooled off considerably from the inflation-driven cost spikes seen in 2022 and 2023.

The temptation may be to assume that further belt-tightening is in order to drive greater profitability, or that firms are giving up some of their gains in demand and rates on the back end because of high expenses.

In truth, the opposite may actually be the case. Deeper analysis shows that current expense growth may largely reflect firms鈥� opportunistic spending, which in turn is helping firms to capture a share of the growing market demand.

Expense breakdown

It鈥檚 important to breakdown what the current major drivers of overhead expense growth are 鈥� indeed, much of the expense spike in 2022 and 2023 was attributable not only to inflation but also to return-to-office costs. Yet today, associated expense categories such as occupancy and office expenses have since generally normalized, and cost controls are largely succeeding in reining in these expenses across most firm segments.

The exception is Am Law 100, in which many firms may still be focusing on getting more lawyers back in the office.

The current high-growth expense categories are largely business development & marketing, knowledge management, and technology 鈥� spend that is intended to enable firms to capture more business and then perform the work more efficiently. Firms are largely in unison in increasing their spend for these categories, with Am Law 200 firms leading in terms of driving those investment growth rates as well as in support staff compensation.

Overall, many law firms are increasing investments into the overhead categories that drive capacity and differentiation of legal service delivery when it comes to technology and knowledge management, and in further growth with business development & marketing.

The cost of chasing opportunity

The recent State of the Legal Market report refers to these types of expenses as 鈥淭he cost of chasing opportunity鈥� and states:

鈥淗igher expenses appear to be the table stakes for firms chasing the cornucopia of business opportunities available to them, as well as the cost of adapting to a shifting technological environment.鈥�

The challenge will be how firms respond if demand growth begins to taper off from the historic broad-based growth of 2024, as 成人VR视频 Financial Insights is predicting may happen in 2025.

Regardless of where demand trends go from here, indications are that firms will continue to invest strongly in technology. The combination of inflation and deferred spending because of the pandemic caused high volatility in tech spend from 2020 to 2023. The gap between tech spend and inflation is now back to normal levels or even slightly higher than before, making this high level of tech spend a key part of the aforementioned table stakes for firms going forward.

We expect tech spend to further increase as GenAI investments become a non-negotiable item for firms in order for them to remain competitive. As a result, firms are gearing up to explore new AI-driven tools across multiple functions 鈥� from legal research, writing, and matter management to back-office functions such as pricing, billing, and predictive analytics. In addition to the considerable capital investments, as well as the costs of maintenance and training, firms may also need to spend sizeable sums to optimize and maintain their data in order to capitalize on the potential benefits of GenAI.

While the timing of widespread GenAI adoption may be an open question, there is little doubt that it will occur and that the impact on both the practice of law and the business of law will be significant, if not transformative.

Special Report Embracing change in the era of innovation   View full report

It will be critical for firm leaders to strategize how they will plan to evaluate, implement, and fund these technologies. And they will likely need flexibility 鈥� depending on how quickly the technologies are introduced and adopted by the market 鈥� as well as ability of those technologies to enable firms to establish competitive advantages. Here again, the key word is opportunities. GenAI brings opportunities for many law firms to improve efficiency and identify avenues for new growth.

Opportunities vs. uncertainties

At the same time, however, uncertainties abound. As mentioned previously, the path and timing of GenAI adoption is a wild card, and economic uncertainty is growing as we head further into 2025. Firms will need to weigh their needs 鈥� both current and anticipated 鈥� and balance those against potential scenarios.

Firms certainly can鈥檛 control market demand, but they can, to a large degree, manage their expenses. And whether they view expenses as strictly a cost rather than the costs of opportunity will largely dictate their expense strategy. The uncertainty about the future may cloud visibility into the opportunities that lie ahead, but there will be opportunities nonetheless 鈥� even if the exact extent, specifics, and timing of those opportunities are unclear.

Capitalizing on strength

Indeed, the level of profit growth seen in 2024 puts firms in as strong a position as ever to invest in the future. Conversely, waiting to invest in hopes of preserving current cash flow could risk putting off needed investments until a market downturn occurs, at which time the costs would be even more painful.

Nevertheless, due to firms’ short-term capital structures, internal investment hurdles will be challenging. Initiating conversations and securing buy-in from key partners is essential, and those discussions should begin now.

With December鈥檚 data showing that many firms doubled down in the final month of the year with a surge of overhead spending, it may be that many firm leaders have come to the same conclusion: Never miss a good opportunity to improve your long-term prospects and competitiveness.

Leonard Lee, of Perfectense, contributed to this blog post

Couldn’t make it? Check out our Executive Summary under the 鈥淒ownloads鈥� tab and highlights from the 32nd Annual Forum below:

Through my interview process, I realized that little was being said about the values of the firm and the culture it was creating and exhibiting both internally to its lawyers and staff and externally to clients and the overall market. If we were going to have success in moving our strategy forward, we first had to start with our culture and values, conducting a major evaluation of what both meant to us as a firm.

Just as importantly, we needed to determine what our purpose should be as a firm in helping shape New Zealand鈥檚 future. To that end, we began to talk about culture and strategy as appropriate bedfellows, but probably not in a way that many partners at the firm had thought about previously.

Beginning the process

I decided that I would use an upcoming annual partner conference 鈥� on the calendar for just six months after I started at the firm 鈥� to hold a major exercise around our values, starting with an externally facilitated workshop.

In this workshop, we asked the partners what they considered to be the firm鈥檚 values and priorities. We then broke into groups and rotated around a large conference room with flip charts and whiteboards in the corners, talking about the potential for values centered around a few key concepts. And at the end of that first day, I honestly felt that we were probably halfway there.

I was very proud how the partners took to it because I think it could have gone terribly badly. I was concerned that the partners would approach the exercise with skepticism, especially because I had so little history with the firm. However, even though they had never done an exercise like this, most put that natural lawyer cynicism aside and really engaged in the exercise.

But that was just the first step. Right away we knew that this exercise would not succeed if our staff did not feel that these were their values as well. So, we then ran 17 workshops across our Auckland and Wellington offices with me, our HR director, and facilitators present at all of them. We discussed what the partnership had come up with and asked staff for their honest feedback. Do we have the right number of values? Have we got the right kind of core concepts? Have we got the right language?

You can imagine what that kind of exercise in language might be like when you鈥檙e involving lawyers and other business professionals. However, there was a lot of good humor, energy, and a deep sense of engagement. Not surprisingly, they did fantastic work.

Each core value resonates much further beyond its initial meaning. For example, the first value 鈥� Respect Individuality, Work as One 鈥� is about teamwork, of course, but also the idea that individuals can turn up as themselves and that we鈥檙e stronger as a diverse group. That level of respect for individuality flows right into the second value.

We wanted to capture the way we look at our performance and service both internally and how we work with our clients. Many years earlier, a young partner had come up with the phrase listen, care, and deliver, and we thought that continued to fit almost perfectly. Then it was suggested that we add with excellence to the end of that phrase to show that we鈥檙e very deliberately raising the bar for our firm.

If we were going to have success in moving our strategy forward, we first had to start with our culture and values.

We latched onto this value so solidly that we use the acronym 鈥淟CDE鈥� as shorthand to sort of embed that phrase into how we work, especially with clients. We created our LCDE Awards for staff who were recognized as going that extra mile.

Our third value was probably the most controversial 鈥� Bring on the Future! Admittedly, this is not what you鈥檇 typically expect from a law firm. However, as a firm we have always had a strong future-facing focus including in tech and innovation. We were a founding shareholder in an artificial intelligence start-up a few years ago, and I remember thinking, 鈥榃ow, that鈥檚 a really radical thing for a law firm to do.鈥� It鈥檚 not our core business, but the firm鈥檚 idea was that we want to demonstrate to the market that we are genuinely interested in this stuff, and that we think like a business because we are a business. To that end, we鈥檙e going to align with our clients and demonstrate that we鈥檙e part of the business community, not some professional services provider sitting on the sidelines.

After we affirmed these three values, we translated them into te reo M膩ori, the language of M膩ori, the indigenous people of New Zealand. Our country has a strong bicultural foundation as a nation, and there鈥檚 been a real M膩ori renaissance. We wanted to be a part of that because it鈥檚 reflective of the kind of modern liberal firm that we are. Through that process, working with an advisor from the local iwi (tribe) we envisioned our idea as a kind of journey, of traveling and momentum. That translated into the image of a canoe, or waka, with a three-paddle motif, with those representing individual paddles as well as the collective effort to get all of our team paddling in unison to really make the waka go faster 鈥� that was our first value of Respect Individuality, Work as One or waka eke noa.

Our second value (Listen, Care, Deliver with Excellence) is waka whakarei. The actual symbol for that is the very ornate panel at the back of the waka 鈥� something that took a lot of care and attention to produce.

Finally, the symbol for our third value, waka hourua, is a double-hulled canoe with an outrigger, which is the next generation of waka 鈥� Bring on the Future! The whole waka journey theme really works quite nicely, and while not a literal M膩ori translation, it does provide a foundation that conveys the idea that binds those three values together and speaks to us as a firm.

We talk openly about our culture, values, and our cultural alignment with new clients.

It鈥檚 also a depiction of a partnership, as opposed to a corporation, because the structure is 鈥� and the real power comes from 鈥� the collective effort of partners (and staff) each with a paddle, working in unison toward a common goal, to literally make the boat go faster, rather than having a corporate engine to power the boat, with a captain on the bridge.

It鈥檚 our New Zealand-centric and more modern motif for the age-old expression of getting the right people on the bus. For us, it鈥檚 having the right people 鈥� each with a paddle in the MinterEllisonRuddWatts waka.

The launch

Almost five years ago, we did a big launch for our core values in our offices in Auckland and Wellington. We didn鈥檛 let the staff know in advance where we鈥檇 landed as a final concept, but I remember distinctly seeing the pride on the faces of the staff who had been in the workshops and now saw their particular changes come through in the final idea.

Today, we talk openly about our culture, values, and our cultural alignment with new clients. For example, we will talk about our Community Investment Programme (pro bono and volunteering) efforts, and clients will talk about where they鈥檙e involved in the community 鈥� and then we鈥檒l see whether we鈥檝e got alignment there. However, it鈥檚 been even more interesting with existing clients. I remember about two or three years ago, we were re-pitching for an existing client鈥檚 work, and we thought we were going to get really squeezed on price.

But the client didn鈥檛 mention price. They knew us well and didn’t need to be convinced that we were the right firm in terms of legal expertise, service, or understanding their sector. Instead, we spent the whole time talking about our culture and values, about our empowerment, our diversity and inclusion policies, and our embracing of te ao M膩ori or the M膩ori world.

In my mind, that interaction really validated our efforts. And these three core values have continued to be an important part of telling that story to clients, to our current team, and to young recruits 鈥� the story of who we are and what we stand for as a firm.

You can access the interactive Spring 2024 issue of the 成人VR视频 Institute’s .