While many businesses went down or struggled to stay afloat over the past year, a small number are emerging from the pandemic in better shape than they went in. How did these businesses achieve growth rates that would have been difficult without last year’s disruptions? And, what lessons can we learn from them to lead through forthcoming storms?

The Hinge Research Institute has just released the law firm edition of the High Growth Study 2021. This year’s annual study surveyed respondents from 101 law firms of all sizes. It covers topics such as the impact of COVID-19 and automation technology, firms’ biggest challenges, future priorities, and how they fared compared to professional services firms in other industries such as accounting and financial services, technology services, and consulting. The study takes a special look at  the strategies and techniques of law firms that enjoyed a compound annual growth rate of 20% or greater, which we call High Growth firms. You’ll learn how these firms thrived amid an economic meltdown—and what strategies your firm could adopt to grow through even the most challenging circumstances.

High Growth Firms and How They Achieved Extraordinary Growth in 2020

High growth (HG) law firms grew at a median rate of nearly 26%. For perspective, average growth firms grew at only 11.5% while the no growth group watched their revenues contract by 3%.

Law Firm Growth Rate 2020

So what explains HG firms’s extraordinary growth? How did they pull far ahead of their peers despite an economic calamity that spanned the world? 

Let’s start with what doesn’t explain their growth.

HG firms didn’t forego profitability for growth. In fact, they were more likely to achieve high profits than either of the other two groups. Nearly three in 10 had average profitability, but close to four in 10 were highly profitable. By contrast, no growth (NG) firms were eight times more likely to see low profits.

Law Firm Profitability 2020

Nor did they derive much of their growth from M&A activity, which accounted for only 23% of their revenue.

Size didn’t matter either, as HG firms came in all sizes. However, the largest number fell under the mid-size category with 100-499 employees and revenues between $5-50M.

Perhaps the most important factor was HG firms’ ability to get ahead of a rapidly changing, unpredictable marketplace and put clients’ evolving needs front and center.

Additional Resources

Join the High Growth law firms who use research to guide their marketing and business development efforts by purchasing this full research study here.