I have long held (see this post from September 2017 [‘Do you know who your competitors are?‘] and this post from July 2014 [‘5 steps to take when you client becomes your biggest competitor‘]) that in a hyper competitive legal market, your client – and not any of your more traditional law firm competitors in private practice – is actually the biggest competitor you face when trying to win new work.
Given this, it should come as no surprise that I found the graph below in the recent (September 2020) Gartner publication ‘2021 Legal Planning & Budgeting – Preview: State of the Legal Function‘ of interesting:
Take note all you private practice lawyers, in a three year period between 2018 and 2020, ‘The ratio of legal spend in-house vs outside‘ moved from 50.2% / 49.8% in 2018 to 57% / 43% in 2020.
That equates to a 13% swing of legal spend in-house over this timespan.
In a period when legal spend on outside lawyers actually grew! (Probably providing a false sense of security!).
And, these numbers pre-date COVID. So it is highly likely this movement of work in-house has, and will continue to, grown.
So, next time your firm is doing a SWAT and/or Competitor Analysis, make sure to keep some room for the biggest competitor out there – your client!