2024 Legal Trends
State of the Industry 2024: Key Insights for Law Firm Leaders
The legal industry in 2024 faced a defining moment, balancing economic caution with opportunities for innovation and growth. Leadership transitions, evolving attorney expectations, and the rise of AI reshaped firm operations and talent strategies. As firms navigate increased competition and shifting client demands, those embracing technology, diversity, and strategic hiring are best positioned for success in 2025 and beyond. In this article, you will read about trends and defining moments that have been highlighted by Leopard Solutions.
Navigating a Shifting Legal Landscape
Caution vs. Opportunity: Law firms took varied approaches to economic uncertainty in 2024. Many firms paused growth early in the year, expecting a downturn that ultimately did not occur. Top 200 firms soon resumed hiring and expansion, whereas many smaller firms stayed cautious. This created a widening strategic divide, with some firms capitalizing on unexpected opportunities while others remained in a defensive stance. The lesson is clear: being nimble and ready to pivot can pay off when anticipated challenges don’t materialize.
Client Demand & Fee Pressures: Corporate legal departments increasingly insourced work, with 40% of companies handling a majority of matters in-house. They are also pushing for cost predictability via alternative fee arrangements. This means law firms must balance caution with proactive client service and value-based pricing to remain competitive even as the market shifts.
Leadership Transitions & Succession Planning
Generational Leadership Shift: An unprecedented wave of managing partner retirements hit major firms in 2024. This generational changing of the guard has largely favored a new cohort of leaders in their 50s stepping up to replace those in their 60s. These rapid leadership changes underscore the importance of succession planning: prolonged tenures without clear successors can leave firms flat-footed when sudden transitions occur. Ensuring leadership pipelines and mentorship for future firm leaders is now more critical than ever.
Governance Considerations: The report reinforces earlier concerns that inadequate succession planning and very long leadership tenures pose risks. Forward-thinking firms are responding by instituting formal succession plans, retirement age guidelines, and leadership development programs to prevent gaps in management continuity.
Evolving Talent Priorities: Gen Z & Lateral Hiring
Gen Z Expectations: The new generation of lawyers is reshaping talent priorities. Gen Z attorneys value work-life balance, mentorship, and authentic DEI commitments even over higher pay. In fact, more than half of Gen Z lawyers said they would trade some salary for a reduced workload. This signals that to attract and retain top young talent, firms must offer flexible work arrangements, strong mentorship cultures, and visible diversity values. Traditional incentives like high salaries alone are no longer a guarantee of loyalty from the next generation of talent.
Career Path Shifts: Career aspirations are evolving across the board. A growing number of lawyers are considering moves in-house or into non-traditional roles – 35% aim to go in-house and 52% are open to alternative legal careers. This trend indicates that law firms need to create more diverse career pathways and growth opportunities internally (such as counsel roles, secondments, or specialist tracks) to keep talented attorneys engaged.
Lateral Hiring Dynamics: In 2024, lateral hiring surged by 9% among the Top 200 firms, while partnership promotions internally have slowed. For the first time, lateral hires are outpacing internal partner elevations at many firms. This reflects a strategic emphasis on bringing in experienced lawyers (often with books of business) to drive growth. However, heavy reliance on laterals also means firms must double down on integration and culture-building, so these hires stay for the long term. It’s a delicate balance between quick growth via laterals and maintaining morale and promotion opportunities for homegrown talent.
AI’s Growing Impact on Legal Workflows
Rise of AI: Generative AI emerged as a defining force in the legal industry this past year. Many firms initially hesitated, but the momentum is now unmistakable – nearly half of in-house counsel expect law firms to adopt generative AI within the next year. Tools leveraging AI are already revolutionizing legal workflows by automating research, due diligence, and routine document drafting. Firms that embrace these technologies can improve efficiency and deliver greater client value.
Adoption & Policy: The report strongly notes that while AI offers efficiency, many firms still lack clear AI implementation policies. Without guidelines, there are risks related to data security, accuracy, and ethical use of AI. Corporate clients are increasingly expecting their law firms to integrate technology responsibly for better service. Firms that fail to develop clear AI strategies and training may fall behind more tech-forward competitors. On the flip side, firms with transparent AI adoption (including attorney training on AI tools and client education on their use) will stand out as innovators. In short, having a well-defined AI policy – balancing efficiency gains with risk management – is quickly becoming a marker of a modern, trusted law firm.
Competitive Firm Rankings (LLFI Insights)
Leopard Law Firm Index Trends: Leopard Solutions’ Leopard Law Firm Index (LLFI), a real-time measure of law firm health, shows that competition among top firms tightened in 2024. Notably, 45% of the Top 200 LLFI firms saw their index score decline and 42% dropped in status, while only 4% managed to improve their status. In other words, upward mobility in the rankings was rare last year, highlighting how challenging it is to gain ground in the current market.
Despite this challenge, LLFI-ranked firms still outperformed many peers in growth. 79% of LLFI firms reported positive headcount growth (vs. 61% of AmLaw 200 firms), and far fewer LLFI firms saw lawyer headcount shrink compared to the broader market (42 vs. 76 firms). The Index’s Top 10 rankings also shuffled: Kirkland & Ellis claimed the #1 spot with a perfect score of 500, and firms like Simpson Thacher, Gordon Rees, and Jones Day entered the top tier for the first time. These shifts suggest that even top performers are jockeying for position amid competitive pressure. For firm leaders, the takeaway is to continuously monitor key performance metrics (beyond just profits) – such as talent growth, retention, and client expansion – to maintain a strong position in these rankings.
Diversity, Equity & Inclusion Challenges
DEI Under Scrutiny: The industry made some diversity gains (particularly within the AmLaw 200), but significant DEI challenges persisted in 2024. There were widespread reports of bias, and many attorneys questioned the authenticity of their firms’ diversity initiatives. In fact, in one survey 39% of attorneys disagreed that their firms were racially diverse, and over a quarter felt their firms did not prioritize pro bono or social justice efforts. Such perceptions indicate lingering skepticism about how deeply diversity and inclusion values are truly embedded in firm culture.
External Pressures: Law firm DEI programs also faced societal and political pushback this year. Some firms responded by scaling back – for example, letting go of Chief Diversity Officers or downsizing DEI teams. These setbacks show that commitment to inclusion is being tested. The report suggests that these tensions will likely intensify in 2025, meaning firms will need to be both strategic and resilient in advancing DEI goals.
Strategies for Meaningful Inclusion: The whitepaper emphasizes moving beyond “performative” efforts. Leading firms are advised to set measurable DEI goals tied to recruiting, promotion, and leadership representation. It also helps to bake these values into everyday culture – for instance, by encouraging pro bono and social justice involvement (with credit given to attorneys who contribute) and by publishing transparent progress reports. Cultivating a true culture of belonging not only is the right thing to do, but also boosts retention of diverse talent and strengthens client relationships. In summary, even amid external challenges, doubling down on authentic diversity and inclusion will be crucial for law firm longevity and reputation.
Strategic Growth: Lateral Hiring vs. Mergers, and Office Expansion
Lateral Growth vs. Mergers: Law firm growth strategy in 2024 often weighed targeted lateral hiring against large-scale mergers. Mergers remained at record levels industry-wide, but they brought significant post-merger integration challenges. Unlike a lateral recruit who chooses a new firm, a merger can force attorneys into a combined entity that might not fit their goals – leading to higher attrition. A Leopard Solutions analysis of recent mergers found that nearly 75% of firms achieved better retention via strategic lateral hiring than through mergers. One striking example: after a major 2020 law firm merger, only 54% of the acquired attorneys stayed on. This suggests that while mergers can quickly boost size and reach, they also risk culture clashes and unwanted departures. Many firms are therefore cautious about “growth at any cost,” and are leaning toward selective lateral additions to expand capabilities.
Key Takeaway: Heading into 2025, the report notes that firms best positioned for success will be those who embrace innovation and align with talent expectations, while growing strategically and sustainably. Expansion is still on the table (especially with favorable regulatory conditions for law firm combinations), but it should be weighed carefully. A smart lateral hire – bringing on a high-performing lawyer with a strong client following – can often deliver growth with fewer integration headaches than a full merger. Of course, well-planned mergers can still offer transformative benefits, but the data shows they must be executed with great care for culture and retention. Ultimately, each firm will need to strike the right balance between lateral recruitment and merger opportunities to secure a competitive edge.
Office Expansion Trends: Despite economic jitters, office openings outpaced closings in 2024. Overall, office losses were minimal nationwide, with only a few states seeing a net loss of a single office. These slight contractions were overshadowed by significant expansion in key markets. California led the way with the most new offices – a net gain of 27 (Los Angeles alone saw 6 new offices, more than any other city). Other growth hotspots included Texas (+24 net new offices), Florida (+19), New York (+15), and New Jersey (+8). This reflects a continued bet on growth markets, often tied to booming industries (tech in California, energy in Texas, etc.), and underscores that many firms are still investing in geographic expansion as part of their long-term strategy. Notably, even firms outside the AmLaw 200 contributed to this trend, as the total of 94 new offices indicates broad-based confidence in select regional markets. For leadership, these patterns may inform decisions on where to open a new office or bolster presence to stay competitive in client access and talent recruitment.
Conclusion & Next Steps:
These themes – from leadership changes and generational shifts, to AI adoption, DEI challenges, and strategic growth choices – all paint a picture of an industry in thoughtful transition. Law firm leaders who stay informed and adaptable in the face of these trends are positioning their firms to thrive. I share these insights to support your strategic planning and to reaffirm my commitment to adding value as we navigate this evolving landscape together.
Please let me know if you would like to discuss any of these findings in more detail or how they might affect our firm’s direction. The full “State of the Industry 2024” whitepaper is available upon request, and I would be happy to provide it or talk through any section of interest.
Thank you for your time, and I look forward to continuing our conversation on how to leverage these insights for our firm’s success.