In recent years, litigation has emerged from the shadow of corporate law, presenting significant growth opportunities for law firms, particularly mid-sized ones operating outside major financial centers like New York City. This shift reflects a broader trend where clients increasingly prioritize litigation services, offering firms a chance to distinguish themselves in a competitive legal market.
According to data from Thomson Reuters, litigation demand grew by 3.3% in 2024, surpassing the 2.8% growth rate observed in 2023. Alongside labor and employment work, litigation accounted for nearly 40% of all lawyer work hours last year, helping to offset slowdowns in other practice areas such as bankruptcy and patent prosecution. Notably, this surge in demand was evident across all market segments, including mid-sized firms, which attracted price-conscious clients seeking alternatives to larger law firms.
Looking ahead, litigation practices are expected to continue their upward trajectory. A survey by BTI Consulting revealed that 57% of clients plan to increase their litigation budgets in 2025. Overall, BTI predicts a 6.9% rise in U.S. companies’ spending on outside counsel for litigation—the largest increase in a decade. This uptick is driven by the growing complexity of litigation, an increase in the number of claims, and the emergence of novel legal challenges, all of which necessitate the expertise of outside counsel.
Several factors contribute to this trend. The rise of litigation finance has played a pivotal role, enabling firms to manage the financial risks associated with lengthy and costly legal battles. The litigation finance industry has expanded to a $15.2 billion market, up from $9.5 billion five years ago. Major law firms have increasingly embraced this model, using third-party investments to fund lawsuits in exchange for a portion of any successful court awards or settlements. This approach allows firms to take on more contingency cases without bearing the full financial risk, making litigation a more attractive practice area.
Additionally, the evolving landscape of corporate governance and regulatory scrutiny has led to a surge in shareholder litigation. Investors are increasingly utilizing legal avenues to address concerns over corporate practices, leading to a rise in lawsuits that challenge company decisions and seek greater transparency. This trend underscores the growing importance of litigation in holding corporations accountable and reflects a broader shift towards stakeholder capitalism.
For mid-sized firms, these developments present a unique opportunity to carve out a niche in the litigation arena. By leveraging their agility and cost-effectiveness, these firms can attract clients seeking high-quality legal representation without the premium fees often associated with larger firms. As litigation continues to gain prominence, firms that strategically invest in this practice area are well-positioned to capitalize on the expanding market and meet the evolving needs of their clients.
In recent years, litigation has emerged from the shadow of corporate law, presenting significant growth opportunities for law firms, particularly mid-sized ones operating outside major financial centers like New York City. This shift reflects a broader trend where clients increasingly prioritize litigation services, offering firms a chance to distinguish themselves in a competitive legal market.
According to data from Thomson Reuters, litigation demand grew by 3.3% in 2024, surpassing the 2.8% growth rate observed in 2023. Alongside labor and employment work, litigation accounted for nearly 40% of all lawyer work hours last year, helping to offset slowdowns in other practice areas such as bankruptcy and patent prosecution. Notably, this surge in demand was evident across all market segments, including mid-sized firms, which attracted price-conscious clients seeking alternatives to larger law firms.
Looking ahead, litigation practices are expected to continue their upward trajectory. A survey by BTI Consulting revealed that 57% of clients plan to increase their litigation budgets in 2025. Overall, BTI predicts a 6.9% rise in U.S. companies’ spending on outside counsel for litigation—the largest increase in a decade. This uptick is driven by the growing complexity of litigation, an increase in the number of claims, and the emergence of novel legal challenges, all of which necessitate the expertise of outside counsel.
Several factors contribute to this trend. The rise of litigation finance has played a pivotal role, enabling firms to manage the financial risks associated with lengthy and costly legal battles. The litigation finance industry has expanded to a $15.2 billion market, up from $9.5 billion five years ago. Major law firms have increasingly embraced this model, using third-party investments to fund lawsuits in exchange for a portion of any successful court awards or settlements. This approach allows firms to take on more contingency cases without bearing the full financial risk, making litigation a more attractive practice area.
Additionally, the evolving landscape of corporate governance and regulatory scrutiny has led to a surge in shareholder litigation. Investors are increasingly utilizing legal avenues to address concerns over corporate practices, leading to a rise in lawsuits that challenge company decisions and seek greater transparency. This trend underscores the growing importance of litigation in holding corporations accountable and reflects a broader shift towards stakeholder capitalism.
For mid-sized firms, these developments present a unique opportunity to carve out a niche in the litigation arena. By leveraging their agility and cost-effectiveness, these firms can attract clients seeking high-quality legal representation without the premium fees often associated with larger firms. As litigation continues to gain prominence, firms that strategically invest in this practice area are well-positioned to capitalize on the expanding market and meet the evolving needs of their clients.