Law firms need to prioritize deep client understanding, proactive business development, and transparent use of data and AI to build trust and deliver value in client relationships, according to a recent legal industry forum
Key takeaways:
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Understanding is critical — Law firms must seek to deeply understand their clients’ businesses and proactively use data and AI to build trust and deliver value.
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Transparent communication is needed — Conversations with clients around pricing, value, and staffing — supported by clear metrics — strengthens client relationships and helps firms demonstrate their worth.
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Pull a lot of levers — Proactive business development, creative billing models, and leveraging advanced technology are critical for law firms to differentiate themselves and meet evolving client expectations.
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WASHINGTON, DC — Today, law firms are facing unprecedented pressure to deliver more value, build deeper relationships with clients, and differentiate themselves in a crowded market. The recent Thomson Reuters Institute’s 24th Annual Law Firm COO & CFO Forum brought these developments into sharp focus, highlighting how client management is now seeping into every aspect of law firm operations.
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The 24th Annual Law Firm COO & CFO Forum Executive Summary
The message from industry leaders at this event was clear: Law firms must prioritize deep client understanding, proactive business development, and transparent use of data and AI to build trust and deliver — and demonstrate — value in client relationships.
The not-so-new imperative: Deep client understanding
As many speakers underscored at the Forum event, the foundation of any successful client relationship is understanding — not just of the client’s current needs, but of their business, market, and future ambitions. While not new, this sentiment is now echoed more strongly by many clients who expect their law firms to act as true partners, invested in their growth and success.
For clients, that even seeps down into the minutiae of running a firm, said one corporate counsel. “What clients really look for is outside law firms that have a track record of good work, meet deadlines, and don’t overstaff — of course, those are just table stakes now,” the counsel said. “Beyond that, clients are increasingly looking at how law firms train and retain their lawyers — because it’s a trust issue, and we don’t want any surprises around who is working with us.”
Increasingly, clients seem to be using their legal spend to speak to those priorities, our research shows. The portion of total legal spending going to outside counsel increased this year to more than two-thirds (67%) of the total. And almost one-quarter (24%) of clients’ outside counsel spend goes to the law firm they use most, with 15% of clients saying they plan to use their most-used firm more this year, compared to last year.
To meet these deepening expectations around collaboration and value, law firms are increasingly leveraging advanced, AI-driven technologies that enable them to gain deeper insights into their clients’ industries, anticipate challenges, and proactively offer solutions. Indeed, these pathways to partnership, it seems, run directly through AI, several panelists suggested. “It’s not just about being reactive to client needs but about anticipating those needs and demonstrating value at every turn,” said one speaker.
However, law firms — for the sake of their own economics — need to train their partners to hold sometimes difficult conversations with clients around pricing and be able to explain the value the firm is offering. “We need to show what’s working and what’s not working in a client relationship,” said one law firm leader. “Not just once a year when we set rates, but in conversations all year long.”
Building trust through transparency & metrics
While trust is the cornerstone of any client relationship, it’s built on transparency. Clients want to know not only what their law firms are doing, but also why, and how value is being delivered, several panelists explained, adding that this means having open conversations with clients around pricing, value, and staffing that are supported by clear, objective metrics.
At the Forum, several law firm leaders emphasized the importance of ongoing, transparent dialogue with clients that backed by data, which helps eliminate any surprises and ensures that both sides are aligned on expectations and outcomes.
“I mean, clients are why we’re in business, and client expectations should be a priority for every firm,” said one panelist. “It’s shocking how frequently we ask ourselves, How will this affect the client? — we ask it a lot, because everything naturally does.”
“Law firms will need to get better on their own metrics so they can see — and explain — what is happening.”
Not surprisingly, many firms are beginning to leverage advanced technology to build out these critical metrics to demonstrate value to clients — yet, it’s not a panacea. Lawyers will still need to review and validate AI-generated work, and the anticipated cost savings may not always materialize as quickly as clients hope. This makes ongoing communication and expectation management all the more important.
Clients and law firms must move forward together, several panelists suggested, adding that firms regularly need to ask their clients, “What do you want to do? What problems do you want to solve and what opportunities do you want to seize?” This collaborative approach ensures that the firm’s efforts are always aligned with the client’s goals.
Proactive business development and creative billing
As many speakers at the Forum contended, gone are the days when law firms could rely solely on traditional billing models and reactive business development. Today’s clients expect more flexibility, creativity, and initiative from their outside counsel.
To that end, firms are getting better at using data to help sharpen their pricing prowess, offering more alternative billing structures, flat-fee arrangements, subscription models, and even tech surcharges. “You have to get creative, and you have to have options,” one speaker explained. “Law firms will need to get better on their own metrics so they can see — and explain — what is happening.”
As evidenced by this, many law firms are taking multiple approaches to addressing pricing issues and questions of value with clients. For example, one firm leader said his firm looked at its own billing and revenue data and the client feedback it had gathered and saw with which clients the firm was most successful and where growth opportunities could be identified. “This is extremely helpful information to guide your lawyers as they prioritize their actions,” he said. “It helps you determine where you want to go as a firm.”
Another firm’s goal was to find more green space — those law firm service offerings that clients weren’t using but could, adding that the firm had much more success finding added value for current clients than locating new ones. Yet another firm did tariff modeling by using data analysis to determine how their manufacturing clients could save money by changing locales. The firm provided the tool, trained clients’ in-house lawyers on the tool, gave the data results to clients, and then worked with them on solutions.
Another argued for tech surcharges — fees charged to the clients to help offset the high costs of law firms’ tech investments. While admittedly controversial, the speaker explained that clients may not balk at reasonable charges because they want their law firms to succeed too — an idea that didn’t draw immediate objection, even from the corporate counsel in attendance. “And I think if one big law firm does it, the industry will follow along,” he added.
Putting clients at the center
As many of the panels at the Forum underscored, clients are the reason law firms exist, and their expectations should be the driving force behind every decision. By prioritizing deep client understanding, embracing transparent communication, and proactively seeking new ways to deliver value, law firms can build stronger, more enduring partnerships — while setting themselves apart in a challenging market.
And, several speakers noted, this is going to be increasingly important going forward. “If the legal market is going to get rocky,” one panelist said, “it’s going to be tech investment and client management that will become critical differentiators for many law firms.”
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