Differentiation is key in competitive legal market, survey shows
The new “US Law Firm Brand Index 2022” shows that US law firms really need to hone their legal skills in order to stand out in this competitive market.
Thomson Reuters’ US Law Firm Brand Indexshows that the legal market in the United States remains one of the most competitive in the world, and that tight competition is largely driven by the growth potential that the US provides to law firms.
Of course, the caveat is that for a law firm to differentiate itself in the minds of clients or to even simply stand out in this marketplace requires firms and their top lawyer to hone an ever-evolving set of skills.
For example, responsiveness to clients no longer makes a law firm stand out as unique, nor can firms tout their responsiveness as anything beyond simple table stakes. However, newer skills — like being proactive communicators — still will allow a firm and its key lawyers to appeal to what their clients are saying they want to see in their external legal counsel.
From a brand perspective, you can see this post-pandemic shift clearly happening as traditional law firm differentiators like historic reputations or relationships with individual lawyers gave way to other factors such as clients’ need to have fast, trustworthy advice from their external counsel. The rapid response aspect of legal work was increasingly important to clients, especially as in-house lawyer workloads continue to grow.
Further, our survey data shows that clients in almost every country or region are planning to increase the level of their legal spend in 2022 — and that was true in the US legal market as well. In fact, it seems that the lingering impact of the pandemic has kept clients’ legal budgets robust and corporate law departments’ reliance on outside counsel at a high level, much to the benefit of traditional law firms and other providers of legal services.
<b>Reacting to clients’ changing needs</b>
The impact of the global pandemic demonstrated to law firms within the US legal industry — as well as to firms within legal markets around the world — that the importance of having a respected and clearly defined brand when it comes to attracting clients, gaining their trust, and cementing strong relationships was paramount. Now, as law firms seek to help their clients navigate still uncertain waters in the pandemic’s wake, they’re seeing how critical it is to their success that they maintain these high-quality relationships.
Thomson Reuters’ showed how those law firms that were able to establish high firm favorability and brand awareness in the minds of clients, and thereby strengthen these client relationships saw the most growth in this year’s Index. The Regional Index covers the legal markets in five separate countries or regions — the United States, the United Kingdom, Mainland Europe, Canada, and the Asia-Pacific region. Each Index is based on data compiled in 2021 from Thomson Reuters Sharplegal study.
This year’s US Law Firm Brand Index clearly reflected this new reality — and for the first time, Latham & Watkins steps into the number one spot in the US Brand Index. Not only does the firm generate the most top-of-mind awareness score with US-based clients, but the firm is also the one to which clients turn to most for high-value work matters.
Second place went to Kirkland & Ellis, which continues to solidify its brand as a top-level firm. For the last two years running, the firm was cited as the one most frequently considered for top-level litigation and M&A work. Also, this year’s Index showed that two new firms reached the Top 20 for the first time: Alston & Bird and Winston & Strawn. Both firms have scaled the ranks by leveraging their strong regional reputations into a national presence that has resonated with clients.
As we start to move away from the worst of the pandemic crisis, clients clearly began shifting their focus as to what they wanted from both their in-house legal teams and their external law firms. As a result, legal demand became more focused on forward-facing factors like how well law firms understood their clients’ business and market sector. Now, as we move forward, clients in the United States and elsewhere continue to desire this specialist expertise and holistic service from their legal partners.