Law Firm Finance Report 2025
The legal profession is undergoing a significant transformation, with law firms facing unprecedented financial challenges. BigHand’s 2025 Annual Law Firm Finance Report, based on a comprehensive survey of 813 senior legal finance professionals, CEOs, and Managing Partners from firms with 100+ lawyers across the UK and North America, reveals a concerning trend in the industry’s financial practices.
Key Findings
Rising Write-offs and Discounts
Despite achieving double-digit growth, law firms are grappling with increasing write-offs and discounts, which are eroding profitability.
A staggering 72 percent of firms experienced increased write-offs last year, with 75percent predicting further growth in the coming year.
Client Demands for Transparency
The report highlights a significant increase in client demand for financial transparency, rising from 76 percent last year to 85 percent this year.
Additionally, 48 percent of firms note rising client demand for proof of value, including expertise, responsiveness, resource allocation, budget management, and DEI performance.
Strategic Responses
Law firms are adopting various strategies to address these challenges:
- Lawyer Compensation: 91 percent of firms have implemented or plan to implement changes to lawyer compensation to increase profitability margins.
- Commercial Awareness Training: 64 percent of firms plan to train lawyers for greater commercial awareness, although only 52 percent plan to deliver this training in the next 12 months.
- Business Development Focus: 64 percent of law firms confirm an increased focus on business development and client management.
- Business Intelligence: 44 percent of firms now use Business Intelligence tools, with an additional 20% planning to implement them over the next 12 months.
The DICE Framework
To combat these challenges, BigHand emphasizes the need for firms to adopt robust cash flow processes built on the DICE framework:
- Data access
- Insights from business analytics
- Control over financials
- Empowerment of lawyers
This framework is crucial for embedding agility and flexibility while safeguarding profit.
Expert Insights
Eric Wangler, President of Global Legal Market at BigHand, stresses the importance of rethinking financial and business strategies in 2025 to ensure strong cash-flow processes, regardless of the economic outlook.
Briana McCrory, Chief Marketing Officer at BigHand, emphasizes the need for law firms to invest in dedicated Business Intelligence technology to remain competitive and win more of the right work.
Law firms that adapt their strategies and embrace new technologies will be better positioned to thrive in an increasingly competitive market.
Download the full BigHand report here
