Client spending remains resilient — fueled by new needs and lingering issues, more companies than ever are pursuing innovative business models and adopting digital processes.
Combine this with strong regulatory headwinds, employee activism, and the emergence of Generative AI — and 56% of clients plan to increase legal spending — with another 30% holding at last year’s levels which are historically high.
We found 6 industries with outsized increases in spending. These include:
- High Tech
- Pharma
- Financial Services
- Healthcare
- Private Equity
- Food/Agritech
We discuss the top spending industries and practices below:
High Tech
Generative AI, regulatory scrutiny, antitrust efforts, and export controls along with copyright and IP issues drive growth for outside counsel. Add in the acute issues driven by labor unrest and layoffs and you have clients of every size facing these issues.
These clients want industry insight and aggressive approaches.
Pharma
These clients are looking to rebuild pipelines and develop new marketing channels. At the same time, they sit squarely in the government’s crosshairs for pricing issues. Pharma companies are changing their business models to sell directly to consumers through telehealth.
Industry insight and new ideas win the work here.
Financial Services
A plate of new regulations, the rise of crypto ETFs giving new credibility to cryptocurrency, and Fintech drive the need in one of the largest spending legal industries.
Your deep understanding of regulatory demands and Fintech helps differentiate your firm.
Healthcare
Healthcare delivery is facing a need for restructuring and capital as it undergoes dramatic change. In addition, the acquisitors, especially private equity, are coming under scrutiny — adding a new legal need for acquiring organizations.
Knowledge of both healthcare and business combinations between profit and nonprofits is prized.
Private Equity
Sitting on more fresh investable capital than ever, these investors are looking for deals. At the same time, portfolio companies are beginning to age to the point where limited partners are asking about exits — driving more legal needs.
Deep relationships and industry insight rule. Referral deal flow is highly valued.
Food/Agritech
Facing a dual set of needs as large companies restructure themselves and spin-off divisions, and smaller companies develop new products and enter new markets. Every size company is developing new food production techniques. The typical Food/Agritech company spends 2x more than the average company on litigation.
Industry knowledge and strategic planning are stand-out differentiators for law firms.
BTI research reveals 6 practice areas with the most growth. These include:
- Labor & Employment
- Cybersecurity
- Commercial Litigation
- Bet- the-Company
- Class Action
- IP Litigation
Labor & Employment
The combination of a regulatory firehose, layoffs, company restructurings, creation of new jobs, demanding new skills, heightened union activity, and employee activism set the backdrop for the fastest-growing practice. Clients of all sizes face increasing needs in almost every industry segment.
Cybersecurity
Ever-increasing public scrutiny combined with state-by-state adoption of new privacy regulations serve to drive demand. In addition, new regulations in California and the European Union have far-reaching impacts on companies across the US. Add in the data leaks posed by the use of Generative AI and you have a robust need.
Commercial Litigation
In a reversal from last year, outside counsel spending is growing faster than the caseload — meaning clients are spending to try to work down the caseload even though it keeps rising. Complex and high-risk matters are the sweet spot. Clients face a bevy of new and novel claims around data, the use of social media, false claims, and new issues from renegotiating supply chains. Early assessment and levels of aggressiveness are growing as differentiators.
Bet-the-Company
New and novel claims combined with aggressive government enforcement are driving bet-the-company matters up. The claims are bigger — as are the risks. The firms who win will know their clients’ risk tolerance cold — or watch this business get shopped to firms with the best strategies and command of the risk.
Class Actions
The plaintiff’s bar keeps getting more creative. Companies going through any kind of business transformation (as 80% are), changes to the business model, and the organization — attract class actions. In addition, companies face claims from unintended use of social media. These clients select law firms that can pinpoint risk and early assessment.
IP Litigation
AI copyright issues are stealing headlines, but the growth goes beyond AI. More companies are feeling the need to find those who infringe on their patents as technology becomes more a part of every product and company. Midsize companies are finding themselves brought into IP litigation by acquiring products or adding technology to their products — and finding the vendor may have infringed. Clients want law firms who are aggressive and creative in assessing both AI-related claims and defenses — and are relentless and comfortable being aggressive.
You can get all the details and target business development strategies for 18 industries cross-referenced against 15 practices for the best opportunities in the newly released report BTI Practice Outlook 2024.
You can also view our discussion and analysis of industry opportunities in the newly posted recording of BTI’s 15th annual BTI Client Service Review and Market Outlook 2024.
