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<\/figure>\nLegal Spending is Poised for Another Record Year \u2014 and Record Rates<\/h2>\n
Law firms will be busy\u2014or have the opportunity to be busy\u2014over the next 12 months as clients try to navigate the growing demands, risks and complexities of the economy and the legal world. As discussed in the 16th Annual BTI Market Outlook and Client Service Review, the biggest increases in spending for outside counsel are clustered in key industries and practices. <\/p>\n
BTI\u2019s 2025 forecast \u2014 based on detailed responses from more than 350 corporate counsel and 23 years of analysis \u2014 reveals the top growth practices and industries. This is where clients with the fastest growing legal spend live.<\/p>\n
Use these coordinates to turbocharge business development and target clients with climbing spending and needs. <\/p>\n
BTI\u2019s 2025 Forecast for Top Growth Practice Areas<\/h2>\n
BTI research reveals seven practice areas with the most growth:<\/p>\n
- \n
- Labor & Employment<\/li>\n
- Litigation<\/li>\n
- M&A<\/li>\n
- Bet-the-Company Litigation<\/li>\n
- Class Actions<\/li>\n
- IP Litigation<\/li>\n
- Private Equity<\/li>\n<\/ol>\n
1. Labor and Employment<\/strong><\/h3>\n
The top drivers for the fastest-growing practice include:<\/p>\n
- \n
- An activist workforce<\/li>\n
- Regulations at the state and federal level<\/li>\n
- Union activities reaching levels not seen since the 1960s<\/li>\n
- Social activism \u2014 with workforces protesting against employer positions on geopolitics, DEI, sustainability, and social issues<\/li>\n<\/ul>\n
In addition, the growing wave of layoffs \u2014 including backdoor layoffs through return-to-office mandates \u2014 add to the needs demanding immediate client attention.<\/p>\n
2. Litigation<\/strong><\/h3>\n
Clients face a record number of cases. They are spending at record levels to resolve it. High-stakes matters are surging. They are the fastest-growing segment. These exceptionally risky matters consume the bulk of client mind share. Risk is sky-high due to new and novel matters \u2014 and the skyrocketing size of the financial claims.<\/p>\n
3. M&A<\/strong><\/h3>\n
Large companies sit on enormous pent-up demand. Midsize and smaller companies are targets \u2014 and these smaller clients are making acquisitions of their own.<\/p>\n
Companies are looking to acquire technology and digital-first companies. There is also a robust market for divestitures as companies look to strategically streamline operations.<\/p>\n
4. Bet-the-Company Litigation<\/strong><\/h3>\n
The number of bet-the-company matters is up almost fourfold over last year. Little of this work is going out to RFP. Clients broadened their definition of bet-the-company as more threats can pose a devastating blow.<\/p>\n
5. Class Actions<\/strong><\/h3>\n
More companies face class actions than ever. Like litigation, class actions are more complex. Clients suggest courts are allowing more diverse classes and novel claims to get certified. The stakes are bigger than ever \u2014 and clients see no end to the deluge of claims.<\/p>\n
6. IP Litigation<\/h3>\n
The keywords in IP Litigation are: \u201cintractable,\u201d \u201caggressive\u201d and \u201cbigger.\u201d<\/p>\n
Technology owners and developers are out looking for infringers \u2014 and don\u2019t want to settle. Claims are bigger as technology moves more into businesses\u2019 critical path.<\/p>\n
At the same time \u2014 defendants are mounting aggressive defenses.<\/p>\n
7. Private Equity<\/strong><\/h3>\n
Sitting on more new investable funds than ever, look for private equity firms to ramp up activity. Deal closings will increase \u2014 as will exits.<\/p>\n
These investors are looking for new deal structures and want to develop new capital structures to boost returns and attract new funding.<\/p>\n
Fastest-Growing Industries<\/h2>\n
Understanding a client\u2019s industry is one of the most powerful law firm differentiators in the market. Studying the dynamics of the fastest-growing industries can sharpen your understanding of the industry and its opportunities. <\/p>\n
1. High-Tech<\/h3>\n
With more than 13 acute legal needs, tech is the fastest-growing industry. These needs range from complex litigation to new and boundary-defining litigation \u2014 especially in AI. IP strategies and data privacy remain in strong demand. Large and small M&A are a key focus.<\/p>\n
2. Financial Services<\/h3>\n
These clients are developing a new array of financial products. Most are complex and designed to boost returns \u2014 they also bring new and unseen risks. This drives the need for regulatory analysis and new litigation.<\/p>\n
3. Pharma<\/h3>\n
A few big pharma companies are enjoying blockbuster hits, while others are building their product pipeline through acquisitions and joint ventures. These clients want dealmakers who understand industry regulations, relationships, and the nuances of how things get done.<\/p>\n
4. Food\/Agriculture<\/h3>\n
Increasing M&A activity, regulatory oversight, and new products drive nine acute legal needs in the food and agriculture industry.<\/p>\n
Deal activity is up as companies look to grow in key markets. Food companies face intense regulations and are looking to understand how to leverage new product lines and formulations within these frameworks. Food technology is playing a larger role with new products and existing offerings \u2014 requiring novel approaches to IP protection.<\/p>\n
5. Healthcare<\/strong><\/h3>\n
A flurry of competitive pressures, consolidation, labor issues and standard-of-care issues drive healthcare to be one of the fastest-growing industries for outside counsel needs. These clients need capital to maintain or improve their market position and meet all the regulatory demands of delivering services.<\/p>\n
6. Consumer Products<\/h3>\n
The race for new products is bringing a flurry of unwanted litigation and claims. These clients are embracing social media to market products and engage customers. This social media outreach is attracting new and novel claims, including impacting mental health and causing overeating.<\/p>\n
New product introductions keep increasing \u2014 and adopting technology is increasing at the same rate. This is driving business but results in unexpected performance or other impacts \u2014 bringing litigation.<\/p>\n
Get the Complete 2025 Legal Services Outlook Report<\/h2>\n
The newly released BTI Practice Outlook 2025<\/a> provides details and target business development strategies for 18 industries cross-referenced against 15 practices for the best opportunities.<\/p>\n
You can also view our discussion and analysis of industry opportunities in the newly posted recording of BTI\u2019s 16th \u00a0annual BTI Client Service Review and Market Outlook 2025<\/a>.<\/p>\n
\nA Look Back: Top-Spending Industries and Top Growth Practice Areas in 2024<\/h2>\n
Client spending remained resilient in 2024 \u2014 fueled by new needs and lingering issues, more companies than ever pursued innovative business models and adopted digital processes. Combined with strong regulatory headwinds, employee activism, and the emergence of generative AI \u2014 and 56% of clients planned to increase legal spending \u2014 with another 30% holding at last year\u2019s levels (which were historically high).<\/p>\n
We found six industries with outsized increases in spending. <\/p>\n
1. High-Tech<\/h3>\n
Generative AI, regulatory scrutiny, antitrust efforts and export controls, along with copyright and IP issues, drive growth for outside counsel. Regulatory scrutiny, including federal law, plays a significant role in shaping the legal landscape for high-tech companies. 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.<\/p>\n
2. Pharma<\/h3>\n
These clients are looking to rebuild pipelines and develop new marketing channels. At the same time, they sit squarely in the government\u2019s crosshairs for pricing issues. Additionally, the evolving cannabis law is creating new opportunities and challenges for pharma companies as they navigate the regulatory landscape. Pharma companies are changing their business models to sell directly to consumers through telehealth. Industry insight and new ideas win the work here.<\/p>\n
3. Financial Services<\/h3>\n
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 legal spending industries. A deep understanding of regulatory demands and fintech helps differentiate your firm.<\/p>\n
4. Health Care<\/h3>\n
Health care delivery is facing a need for restructuring and capital as it undergoes dramatic change. Knowledge of both health care and business combinations between profit and nonprofits is prized. In addition, the acquisitors, especially private equity, are coming under scrutiny \u2014 adding a new legal need for acquiring organizations.<\/p>\n
5. Private Equity<\/h3>\n
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 \u2014 driving more legal needs.<\/p>\n
6. Food\/Agritech<\/h3>\n
The industry is 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 two times more than the average company on litigation. Industry knowledge and strategic planning are stand-out differentiators for law firms.<\/p>\n
Top Growth Practice Areas in 2024<\/h2>\n
BTI research reveals six practice areas with the most growth:<\/p>\n
- \n
- Labor & Employment<\/li>\n
- Cybersecurity<\/li>\n
- Commercial Litigation<\/li>\n
- Bet-the-Company Litigation<\/li>\n
- Class Actions<\/li>\n
- IP Litigation<\/li>\n<\/ol>\n
1. Labor & Employment<\/h3>\n
The combination of a regulatory firehose, layoffs, company restructurings, creation of new jobs, demanding new skills, heightened union activity, employee activism, and evolving labor law set the backdrop for the fastest-growing practice area. Clients of all sizes face increasing needs in almost every industry segment.<\/p>\n
2. Cybersecurity<\/h3>\n
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 U.S. Add in the data leaks posed by the use of generative AI and you have a robust need.<\/p>\n
3. Commercial Litigation<\/h3>\n
In a reversal from last year, outside counsel spending is growing faster than the caseload \u2014 meaning clients are spending to try to work down the caseload even though it keeps rising. Commercial litigation often intersects with criminal law, especially in cases involving serious offenses and complex legal violations. Complex and high-risk matters are the sweet spot. Clients face a bevy of new and novel claims around data, social media use, false claims, and new issues from renegotiating supply chains. Early assessment and levels of aggressiveness are growing as differentiators.<\/p>\n
4. Bet-the-Company Cases<\/h3>\n
New and novel claims combined with aggressive government enforcement are driving bet-the-company matters up. These high-stakes cases require the best strategies and command of risk, making them a critical area within the legal profession. The claims are bigger \u2014 as are the risks. The firms that win this business will know their client\u2019s risk tolerance cold \u2014 or watch this work get shopped to firms with the best strategies and command of the risk.<\/p>\n
5. Class Actions<\/h3>\n
The plaintiff\u2019s bar keeps getting more creative. Clients facing class actions are increasingly seeking legal advice to navigate the complexities and potential risks involved. In companies going through any kind of business transformation (as 80% are), this results in changes to the business model, and the organization\u2019s structure and business processes \u2014 all 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.<\/p>\n
6. IP Litigation<\/h3>\n
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<\/a> by acquiring products or adding technology to their products \u2014 and finding the vendor may have infringed. Clients want law firms that are aggressive and creative in assessing both AI-related claims and defenses \u2014 and are relentless and comfortable being aggressive.<\/p>\n
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