BigHand has released its 2025 Annual Law Firm Finance Report, offering insights into the evolving financial landscape of the legal industry from cash recovery strategies, changing client behaviors, and emphasis on business development and commercial awareness among lawyers. Based on a comprehensive survey of 813 senior legal finance professionals, CEOs and Managing Partners in law firms of 100+ lawyers across the UK and North America, this year’s report reveals the striking truth that in the push for growth, the fundamentals of good financial business practices have been sidelined.
While many firms achieved double-digit growth, challenges such as rising write-offs, discounts, and client demands for financial transparency are eroding profitability.
85% of firms report an increase in client demand for financial transparency, up from 76% last year
72% of firms experienced increased write-offs last year, with 75% predicting further growth in the year ahead
48% of firms note rising client demand for proof of value. Clients demand expertise, responsiveness, resource allocation, budget management and DEI performance.
Firms are planning to meet key cash-flow challenges with different strategies.
91% have already implemented or plan to implement lawyer compensation to increase profitability margins
64% of firms planning to train lawyers for greater commercial awareness – although only 52% plan to deliver this training in the next 12 months
64% of law firms confirm they have more focus on business development and client management
44% now use Business Intelligence and 20% plan to implement it over the next 12 months
The findings emphasize the urgent need for firms to adopt robust cash flow processes built on the DICE framework of Data access, Insights from business analytics, Control over financials, and Empowerment of lawyers. This will be key to embedding agility and flexibility while safeguarding profit.
“The report captures pressing challenges facing the legal industry from poor cash-flow management to the need to build financial acumen among lawyers to drive sustainable growth. It urges law firms to rethink their financial and business strategies in 2025 to ensure strong cash-flow processes, regardless of the economic/business outlook. By using the insights in this report, firms can strengthen client relationships, drive sustainable growth, and position themselves as leaders in a changing market.” says Eric Wangler, President – Global Legal Market at BigHand.
"Law firm leaders are focused on embedding a growth mindset into their client management, but this can only be done by training lawyers with support from the right business intelligence tools. Firms that invest in dedicated BI technology are setting themselves up to win more of the right work and remain competitive in the market. It’s not just about understanding the data—it’s about turning insights into action," comments Briana McCrory, Chief Marketing Officer at BigHand.
Download BigHand’s Annual Law Firm Finance Report for more valuable insights and strategies on boosting profitability.
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