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Law Firm Growth and Challenges in 2024: Marketing and Technology

Jennifer Anderson

Written by

Jennifer Anderson


January 19, 2024

Law Firm Growth and Challenges in 2024: A Global Survey, Pt I

In preparing our 2024 Global State of Law Report, it became evident that modern law firms are growing and adapting in the face of global economic fluctuations and rapid technological advancements. Although many firms reported this was an “above average” year, it was also a period of challenges and transformation. We surveyed over 750 legal professionals globally to understand how law firms navigate this changing world's complexities.

This article explores some dynamics that shaped law firms this past year. We’ll look at law firm challenges and their varying growth patterns with an eye on how different sectors responded to the year’s economic stressors. The story of 2024 is not just about growth figures but also the strategic decisions behind these numbers. In particular, it involves a closer look at how law firms leveraged resources and vendors to stay ahead in a competitive landscape in 2024.

Studying successful firms encompasses the evolving marketing strategies that law firms adopted, the role of technology in enhancing client satisfaction and operational efficiency, and the challenges of budgeting for and integrating new technologies into existing frameworks. Through this article, we aim to offer insights into the collective psyche of the legal industry, highlighting its triumphs and the challenges it continues to navigate.

Law Firm Performance and Growth in 2024

Last year was a year of dichotomous growth for law firms. The spectrum of growth experienced by these firms mirrored the tumultuous economics of the time. More than half of the law firms we surveyed, irrespective of size, reported growth rates varying from a modest 5% (less than inflation) to an impressive 20%. 

This statistic, however, tells only half the story. The other half of the firms were enshrouded in uncertainty, unaware of whether their billings grew or declined – a testament to the unpredictable market conditions of the year.

The real estate law sector, in particular, faced its own set of unique challenges. The fluctuating interest rates directly impacted mortgage rates and cast a long shadow over this sector. The numbers were stark – over 50% of real estate law firms reported no growth, and an additional 30% could not ascertain their growth status. These figures highlight the sector's struggle in an environment where economic variables played a significant and, at times, capricious role.

Cautious optimism

Despite these challenges, a sense of optimism permeated the industry. Half of the firms surveyed expressed a positive outlook, predicting an increase in billings over the next 12 months. This optimism was not without its caveats, as less than 5% of firms anticipated a decrease in billings, reflecting an overall cautious yet hopeful stance towards the future.

Technology and growth

2024 is also a year that underscored the importance of adaptability and strategic decision-making. A surprising number of firms simply weren’t aware of their growth metrics – something that could be resolved with a legal practice management solution like Smokeball that provides insights into key performance indicators like revenue growth, sources of new business, and more. 

The 2023 State of Law Report was dubbed “The Great Automation” because the highest impact objective was connecting software systems and reducing manual tasks to save time for billable work. The 2024 State of Law focuses on how legal professionals will take automation further into artificial intelligence, where software learns and makes decisions based on feedback and inputs.

Biggest challenges of 2024

Law firms have grappled with formidable challenges over the last 12 months: client growth and retention, managing inflation, and ensuring employee well-being. Approximately one-third of the firms identified growing and retaining clients as their primary hurdle. While this is an age-old challenge for firms, its prominence at the top of the list is notable.

Inflation posed another significant challenge, cited by nearly 30% of the firms. Of course, rising costs affect operational expenses, pricing strategies, and client billing. Firms have no choice but to navigate these economic pressures while maintaining competitive and client-friendly services.

Employee well-being emerged as a closely ranked third challenge, highlighting the industry's growing recognition of the importance of work-life balance, mental health, and overall employee satisfaction. Again, this is not a new challenge for law firms, but the factors influencing employee well-being shift with each generation of new lawyers.

Client Growth and Marketing Trends

2024 illuminates a critical (if not perpetual) challenge for law firms: the pursuit of client growth and retention. This endeavor was especially pronounced in smaller firms, where the stakes for acquiring and maintaining a robust client base remain remarkably high. Yet, what emerged from our survey was not just a tale of struggle but one of evolving strategies in the face of adversity.

Marketing challenges

One primary obstacle lies in marketing – a crucial yet often underutilized tool in the legal sector. Surprisingly, one in every four law firms admitted not engaging in marketing. This trend, however, shows signs of improvement compared to the previous year. In 2022, nearly half of the law firms had internal marketing efforts (often as an added responsibility), and a meager 6% employed external marketing vendors. Resultantly, a staggering 47% of firms were without any marketing initiatives at all. The shift in 2023, albeit gradual, could indicate a growing recognition of the importance of marketing in client growth and retention into 2024.


Referrals continue to reign supreme as the most effective channel for acquiring new clients, with over half of the firms attributing their recent client influx to this traditional method. That said, the landscape is not static in this regard. 

Digital marketing

Digital footprints began to gain traction, with one in seven firms citing search engines as their top source for new clients. This digital shift pointed towards a broader trend: the legal industry's slow yet steady embrace of online platforms and digital marketing strategies.


The data from 2022 further elucidated this shift. In that year, the most popular channels for attracting potential new clients included referrals (31%), firm websites (17%), and search engines (14%). Other digital avenues like advertising (both digital and physical), social media, and pay-per-click advertising collectively contributed to a significant portion of new client sources.

This transition to a more integrated marketing approach may reflect an awakening within the industry. While still effective, more than the traditional reliance on word-of-mouth and referrals is needed in a digitized world. Law firms are acknowledging the potential of a diverse marketing strategy that blends the reliability of referrals with the expansive reach of digital platforms.

The Increasing Role of SaaS Vendors

2023 also marked a significant pivot in the legal industry's relationship with technology, particularly with Software as a Service (SaaS) vendors. Our survey unearthed intriguing patterns in how law firms of various sizes integrated technology into their operations to prepare themselves for 2024 and beyond. The overarching trend was a decisive move towards embracing SaaS solutions, reflecting the industry's need to stay agile and efficient in a dynamic business environment.

Number of vendors used

A striking 60% of law firms, regardless of size, reported using one to three software vendors. This statistic underscores the widespread acknowledgment across the legal industry of the value brought by SaaS platforms. However, the narrative shifted when scrutinizing the size of the firms. 

Smaller firms with just one to two employees demonstrated a surprising inclination towards a more extensive technological arsenal, with many using upwards of eight vendors. This number contrasted with larger firms, which tended to consolidate their software needs to fewer providers.

This information mostly aligns with the Tech Staked Firm Report we published for 2023. It revealed that 77% of law firms used five or fewer software solutions. This pattern hints at an ongoing struggle within the industry – the balancing act between diversifying technology tools and managing a cohesive, streamlined workflow. 

Too many firms still find themselves entangled in a web of disparate software platforms, each catering to specific legal workflow needs but often overlapping in functionality. This clutter ranges from client portals and legal document management systems to e-billing platforms and video conferencing tools.

Integrating technologies

While law firms’ attempts to cover all bases with various technologies is a positive step, the challenge lies in integrating these systems. Often, these platforms operated in silos, failing to communicate with each other effectively. The burden of bridging these gaps falls on the staff, who are forced to become manual messengers between systems, ironically reducing the efficiency that technology was supposed to enhance.

Evolving views on technology

This year is not just about adopting technology; it is about the realization that effective technology adoption means choosing solutions that solve specific problems and seamlessly integrate into the firm's overall workflow. Law firms are beginning to recognize the need for technology that works in harmony and creates a cohesive firm ecosystem rather than a fragmented array of tools.

Priorities and Trends in Choosing Saas Vendors

Law firms' criteria for selecting SaaS vendors highlight a discerning and strategic approach to adopting technology. Our survey revealed intriguing insights into the priorities that guide these choices, reflecting an ever-evolving understanding of the role of technology in enhancing legal practice.

Just make it easy

A predominant 50% of law firms prioritized “ease of use” as the most critical factor when choosing a SaaS vendor. This preference underscores a pragmatic approach; law firms want technology solutions that are user-friendly and integrated into their existing daily operations without requiring steep learning curves. The emphasis on ease of use is a clear indicator of the industry's recognition that the actual value of technology lies in its accessibility and straightforward application.

Automation is key

Automation and workflow features were also high on the priority list, selected by about one in five firms. This choice points to a growing awareness of the benefits of streamlining tasks and optimizing workflows. Law firms increasingly seek software that performs isolated functions and brings efficiency and structure to their operational processes.


Interestingly, price, often a primary consideration in many sectors, was less of a deciding factor for law firms in selecting SaaS vendors. It ranked as the third most important attribute, with less than one in ten firms citing it as a critical determinant. This trend departs from traditional cost-centric approaches and indicates a shift towards valuing functionality and efficiency over cost.

Evolving trends

The comparison with data from 2022 brought additional depth to this narrative. The priorities then were effectiveness (79.13%), ease of use (71.84%), and cost (58.5%). The shift in 2024 towards an even greater emphasis on ease of use and the relatively lesser focus on cost illustrates an evolving mindset. Law firms are not just seeking tools to get the job done; they’re looking for solutions with minimal disruption and maximum efficiency – the essence of value for many businesses.

Technological Advancement and it’s Role in Success

2024 presents a legal landscape marked by growth and challenges, showcasing the resilience of law firms in adapting to global economic dynamics and technological shifts. Despite dichotomous growth and uncertainties, a prevailing cautious optimism prevails, emphasizing the importance of strategic decision-making and adaptability. Integrating Software as a Service (SaaS) solutions transitioning from "The Great Automation" to a focus on artificial intelligence underscores the industry's commitment to technological advancements.

Challenges such as client growth, managing inflation, and employee well-being remain prominent, urging law firms to prioritize marketing strategies for client acquisition and retention. While referrals persist, a slow but steady embrace of digital marketing signals a shift towards a more integrated approach.

The growing reliance on SaaS vendors is evident, with law firms recognizing technology's value in enhancing workflows. However, the challenge lies in seamless integration avoiding siloed operations. Prioritizing ease of use, automation, and workflow features over cost in choosing SaaS vendors reflects a shift toward valuing functionality and efficiency.

As law firms navigate 2024 and beyond, embracing technology strategically, ensuring seamless integration, and prioritizing user-friendly solutions will be crucial. Staying abreast of evolving trends and maintaining flexibility will be key to sustained success in the ever-changing legal environment.

Part II of this article explores how Legal Case Management Software helps drive success with clients and law firm employees. Read it here.

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