Adapting for Success: Strategic Insights for Law Firms in 2025 and Beyond

By Dan Safran

The legal industry is at an inflection point, grappling with challenges that range from rising client demands to technological disruption. There are five critical areas where firms can take a proactive, strategic approach, including actionable insights and recommendations for navigating 2025 and beyond.
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1. Market and Financial Dynamics: A Balancing Act

The financial performance of the legal industry has been remarkable in recent years, with Am Law 200 firms experiencing a staggering 32% revenue growth from 2019 to 2023. While metrics like revenue per lawyer and partner compensation have risen sharply, markedly higher revenues and profits were largely fueled by rate increases rather than heightened demand. Many of our clients have raised rates 10-15% over the past two years and are working to do similar in 2025, even though the annual 2024 inflation rate at end of October was at 2.6%
This reliance on rate hikes poses a fundamental question: how long can firms sustain growth without addressing underlying challenges?
The competitive landscape is becoming more intense, with the big accounting/law companies and alternative legal service providers (ALSPs) capturing greater market share. While Europe and Asia have embraced alternative fee arrangements (AFAs), U.S. law firms remain heavily dependent on the billable hour. We are continually surprised that US chief legal officers have not be as proactive as in other markets, however we strongly believe that AFA and rate pressure will increase.
Pricing innovation is another critical lever. Advanced analytics and dedicated pricing teams enable firms to set more competitive rates while maintaining profitability.
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2. Client Expectations: Delivering Flexible, Tailored Value

The modern legal client is informed, selective, and demanding. Increasingly, clients seek firms that offer tailored, flexible services and deliver value beyond transactional advice. Generative AI has added another dimension, with some clients embracing its efficiency while others remain cautious due to data security concerns. Beyond technology, clients now scrutinize law firms’ Environmental, Social, and Governance (ESG) initiatives and demand meaningful, material contributions from diverse law firm fee earners. Diversity, Equity, and Inclusion (DEI) requirements are now becoming standard requirements as evidenced through many law department Requests for Proposal.
Law firms have and are continuing to invest in pricing and matter budgeting resourcing and practices. Client collaboration is improving as we are seeing increasing engagement of law firm business processionals, working alongside lawyers, meeting and working with clients to drive better transparency and expectation setting and understanding. This is a recent innovation at many law firms.
This being said, firms should differentiate by further prioritizing transparency and collaboration. Digital platforms and client portals, for example, can foster better communication, allowing clients to track progress and stay informed. Education also plays a key role — particularly around emerging technologies like generative AI. Firms should position themselves as trusted advisors, guiding clients on the practical and ethical implications of these innovations.
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3. Operational and Productivity Improvements: Efficiency, Retention and Cost Opportunities Abound

While many firms recognize the need for greater efficiency, operational improvements often lag behind intentions.
Centralization is key to modernizing law firm operations.
Transitioning to shared legal assistant teams, for instance, not only reduces overhead but also enhances service delivery. Most firms that start working with Unbiased Consulting are at 3:1 to 4:1 legal assistant ratios. Best in class law firm clients are achieving ratios of 10:1.The changing model has delivered significant cost savings and improved efficiency and client service to law firm fee earners. The savings are material with a very quick return on investment..
Most law firms continue to use archaic associate work allocation and staffing models. Centralizing and modernizing how associates are allocated to matters, leads to far less expensive attrition, reduced time spent by senior lawyers, higher associate utilization/realization, better DEI outcomes, etc.
Many other operational improvement opportunities exist.Firms must continue to streamline their revenue cycles by adopting end-to-end financial management processes, minimizing write-offs and accelerating cash flow, versus today’s siloed approaches. Invoicing to cash workflows are suboptimal requiring improvements in process, skilling and automation. While business intake and conflicts technology has been widely adopted, fewer firms have re-engineered their work processes and organization to accelerate client/matter opening, and better managing business conflict risk. Likewise, information governance/records management policies, retention schedules, processes, organization models and technology are inconsistently adopted, and compliance varies widely. Further firm focus is required.
Practice and lawyer work improvement efficiency also represents a trend and opportunity set. Lawyers continue to do their day to day work somewhat inefficiently, tracking work on legal pads, Microsoft Teams, whiteboards vs. using existing matter/work management solution sets, designed expressly for this purpose. Calendaring, status reporting, tracking internal progress across matter teams are oft cited as frustrations for firm lawyers.Last, commoditized legal practices require re-evaluation of work processes, lawyers and support resourcing and skilling and automation to reduce inefficiencies.
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4. Technology and Automation: Innovating with Purpose

Technology continues to disrupt the legal industry, with private equity investment driving both innovation and cost escalation. Generative AI has sparked significant interest for its potential to transform everything from legal research to operational tasks. However, many firms are still grappling with basic inefficiencies, such as decentralized matter management systems and manual workflows.
Firms must approach technology adoption strategically, focusing on areas with the highest return on investment. AI-driven tools can automate routine tasks like document drafting, document summarization, legal research, but there is great reluctance due to early stage solutions lack of trust, among other reasons. Predictive analytics offer another avenue for innovation, enabling firms to forecast case outcomes and anticipate client needs.This being said, most firms have not adopted structured, business centric approaches to requirements, use case development, desired outcome identification, robust and systemized prototyping/pilot tests, or proactive managed adoption with strong focus on return on investment. GenAI is in its formative stages and great cost and resource investment is being expended, with unclear law firm outputs. While GenAI is promising, there is much work to be done.
Workflow automation is essential for improving consistency and reducing manual errors and spurring greater efficiency. Checklist and form automation, via newer AI based solutions, is becoming more available, to meet practice specific use cases.
Finally, firms need to invest in more robust data analytics capabilities, including centralized dashboards that provide real-time insights, and quantitative data, useful for decision-making.
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5. Talent Management: Retaining and Developing the Best

Hybrid work models have become the norm, yet they remain fraught with challenges. Firms struggle to strike the right balance between flexibility and in-office collaboration. Firms that frame in-office time as an opportunity for team building and mentorship — not just a policy requirement — are more likely to engage their employees.
Education remains a priority. By investing in their people, firms not only address immediate staffing needs but also build a stronger foundation for the future. Enhanced training and development programs help associates and young partners feel valued and prepared for future roles within the firm.
Meanwhile, the war for talent has intensified, with recruitment cycles starting earlier and retention becoming increasingly difficult.
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Conclusion: A Call to Action

Firms that embrace change, prioritize client-centric strategies, and modernize their operations will position themselves for success in 2025 and beyond. By focusing on sustainable growth, leveraging technology, and investing in their people, law firms can adapt to this era of transformation and emerge stronger than ever.