According to Brightflag’s recent report, Am Law 100 firms increased their rates by under 5% in 2023, far less than expected.
I’m back for a third consecutive year to offer my predictions. Read on for my self-scored 2023 predictions, and my 2024 predictions.
Scoring my 2023 predictions
- Reductions in force continue: Hit. I take no pleasure in this prediction having come true. According to TechCrunch, the tech industry has lost more than 240,000 jobs in 2023, 50% above 2022 levels. The failures of Silicon Valley Bank and First Republic Bank didn’t help.
- Growth investment remains frozen: Hit. It’s a very bad time to need to raise money, to put it mildly. According to Crunchbase, venture funding in October 2023 was down 24% year over year, and down by more than two thirds compared with the 2021 monthly average.
- (Some) CLM vendors feel the pain: Hit. My scoring of this prediction is based in large part on nonpublic information. Google Trends shows a cooling-off in buyer interest. Consolidation is coming; whether it happens this month or next year, I can’t be certain.
- Legal ops becomes the GC’s right hand: Hit. My many conversations with General Counsel this year confirm what I predicted: the head of legal ops increasingly is their go-to person. Increases in senior-level legal ops compensation also validate this trend.
- The US enacts a national privacy law: Miss. According to Business Insider, this year’s Congress is the least productive in modern history. And it’s only gotten worse: a week after that analysis was published, the Speaker of the House was deposed.
- Am Law 200 revenue growth halves: Hit. Am Law 200 revenue growth was 2.9% in 2022, down from 13.9% in 2021. Is this a reflection of the economy or a sign that Big Law’s glory days are coming to a close? Keep reading to see my prediction for 2024.
- AFAs slow, but ALSPs grow: Unclear. This was a poorly framed prediction. In hindsight, what I was trying to say was that alternatives to hourly billing need not be conflated with alternatives to law firms. I really can’t tell if this has happened or not.
- Contract standards break out: Miss. According to oneNDA’s global directory, year-over-year growth is around 40%. That’s solid, but not a break out. And most adoption has come from startups, meaning the percentage of total NDAs impacted is even lower.
- Big Tech makes a legal acquisition: Miss. Rumors have been swirling for a few months that Salesforce is close to acquiring a CLM vendor. That would make sense, but I think the rumors are just that, and we’re now unlikely to see an acquisition this year.
- Brightflag has a great year: Hit. We added great new customers, launched important features like PDF Check and enhanced budgeting, and had a blindingly bright billboard on the Las Vegas Strip during CLOC Global Institute. What could be better?
Dartboard with red and green darts; image by Afif Ramdhasuma, via Unsplash.com.
Six hits, three misses, and one unclear. Not bad!
Okay, let’s move on to my 2024 predictions.
2024 predictions
- Legal ops hiring (re) heats up: While senior legal ops hiring continued apace in 2023, it wasn’t a good year for creating junior and mid-level positions. I expect that trend to reverse in 2024 as more General Counsel realize “do more with less” isn’t a winning strategy.
- Legal ops compensation normalizes: When we conduct and release our third annual legal ops compensation survey early next year, I expect to see something different: consistency. Specifically, I expect the interquartile range to be smaller.
- Legal looks for outside help on AI: Attorneys are indoctrinated in the art of risk avoidance. Today’s climate demands a different mindset: one that encourages and rewards taking calculated risks. I expect legal to follow other departments’ lead on AI.
- The AI craze dies down (a bit): AI is transformational, but is it any more transformational than the Internet, smart phone, and social media? I think these are similar and predict we’ll all shift into “we know how to handle change like this” mode in 2024.
- Corporate legal’s remit expands: Legal is already deeply involved with compliance, ESG governance, and privacy efforts. Look for formal ownership to become the norm in 2024, as the General Counsel is the best-positioned executive to lead these functions.
- Am Law 100 rate increases slow: According to Brightflag’s recent report, Am Law 100 firms increased their rates by under 5% in 2023, far less than expected. I expect an even lower average increase in 2024 as Big Law finds itself under continued pressure.
- LinkedIn launches community features: There’s a huge untapped market for technology to support the growing number of online and hybrid professional communities. As the largest professional social network, LinkedIn is well positioned to fill this gap.
- SaaS proliferation resumes: Zylo, a SaaS management software company, this year saw a first-ever decline in the average number of SaaS products used. I expect the trend to reverse in 2024, as there are simply too many untapped opportunities.
- The CFO remains in the driver’s seat: Every initiative will come under the CFO’s intense scrutiny, with “no” continuing to be the most common response. General Counsel and legal operations professionals will need to sharpen their financial acumen to be successful.
- Brightflag has a great year: It’s part of my job to believe this each and every year, and I do believe it. We enter 2024 in a strong financial position and with a better product, a better team, and more customers than ever before. Again, what could be better.
I hope you have a safe and happy holiday season.
Join the conversation!