The BTI Practice Outlook 2022 shows the 10 industries with the biggest legal spending increases and 6 top growth legal practice areas.
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Law firms are enjoying strong and steady market-based tailwinds as 2022 unfolds. These will drive another year of growth for the law firms who can deliver — and target the best spots. A recent study based on more than 240 interviews with top legal decision-makers reveals these tailwinds include:
- Record levels of workloads for the second year in a row.
- Sending more of the budget to outside counsel than last year.
- The biggest legal spenders lead the list of companies increasing spending on outside counsel.
The 10 Industries Showing the Most Growth in Legal Spending
We found 10 industries with the largest increases planned.
The first group shows the largest increases:
- Media
- Biotech
- Technology
- Big pharma
- Food/Agritech
- Private equity
1. Media
Companies are jockeying for positions in the streaming and content-driven world. Look for transactions and deals of all sizes. Tech companies often include themselves as media companies too. And content is not limited to news, movies, TV and sports — add in gaming, music catalogs and education content.
2. Biotech
The COVID-19 vaccine race increased the pace of R&D and transactions across all drug development. These companies will be raising capital, cutting deals, and entering into transactions.
3. Tech
Despite public scrutiny, most tech companies will keep making acquisitions — especially at the small and midsize level. Some large-cap tech still plans large transactions to establish market position.
4. Big Pharma
Big pharma is looking to build out their pipeline and streamline their product lines and will look to biotech startups and larger targets.
5. Food/Agritech
Advances in food technology are driving IP, regulatory work, transactions, and capital raising along with litigation. The rate of change in this arena rivals other technology markets — and brings a host of legal issues with it.
6. Private Equity
These funds have record levels of capital to invest — and they are eager. These funds will look to large firms for the biggest deals and small and midsize firms for smaller deals. Look for them to be the buyers when large companies sell off non-strategic businesses.
These four industries expect heady growth as well:
- Financial services
- Investment banking
- Health care
- Banks
7. Financial Services
Financial services face regulatory demands, class actions and labor actions. They also are under intense pressure to lower costs by getting larger (acquisitions) or selling off non-core assets.
8. Health Care
Health care faces regulatory scrutiny, labor issues, capacity management, and the same demands for capital pre-pandemic. In addition, health care organizations are acquisitive as the industry consolidates.
9. Investment Banking
Both the large and boutique investment banks are benefiting from record levels of M&A, private equity and IPOs. They are big consumers of legal services and referral sources — offering double-edged growth. Investment banking will remain robust as the M&A and private equity markets stay exceptionally strong.
10. Banks
Look for banks to consolidate to reduce costs and help justify the technology investment they will have to make to stay competitive. Look for more activity at regional and midsize banks.
The 6 Top Growth Legal Practice Areas
The top growth practices for 2022 include:
- M&A
- Data privacy/Cybersecurity
- Investigations
- Labor and employment
- Litigation
- Class action
Last year, M&A, cybersecurity, labor and employment (in the form of employee-related litigation and employment law), and class action litigation also showed major growth.
The opportunities will go to the firms that bring unmatched industry understanding and early thinking about the strategy for the matter at hand — the earlier the better.
You can get all the details and target business development strategies for 18 industries cross-referenced against 15 practices for the best opportunities in the newly released The BTI Practice Outlook 2022. You can also view our discussion and analysis of industry opportunities in the recording of “The BTI Client Service Review and Market Outlook 2022.”
Illustration ©iStockPhoto.com
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