1. Profitability-first approach
As firms find ways to drive towards ambitious financial growth targets, switching the focus from fees to profitability across the firm will be a key focus in 2025.
Firm leaders will drive the prioritization of profitability in pricing legal work at the outset to ensure long-term financial sustainability, and allow for reinvestment in innovation, talent, and client services. Moreover, as clients increasingly demand transparency and value-based pricing, a focus on profitability enables firms to meet these expectations without eroding their bottom line. Ultimately, profitability provides the resilience needed to navigate economic uncertainties and stay competitive in the legal market.
The adoption of legal technology is a critical step in the process and only set to grow in 2025 (our latest research found 19% of firms are planning to implement legal pricing and budgeting tech this year). Tools for better budgeting and tracking, coupled with data analytics provide insights into client and matter profitability, enabling firms to identify inefficiencies and adjust their approach. Budget tracking software that provides real-time updates can also prevent overruns and support accurate cost estimation for fixed-fee or alternative fee arrangements.
Law firms that can transition to a profitability-first approach and balance financial health with client satisfaction, will be in the best place for sustainable growth in 2025.
