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The latest ³ÉÈËÓ°Òô Bellwether Report reveals a strong preference amongst independent law firms for organic growth over mergers and acquisitions (M&A), with 63% planning to achieve this growth through their own means.

This trend highlights a strategic choice, reflecting both practical considerations and long-term vision within the legal sector. But why is organic growth so highly favoured, and what are the best strategies to achieve it?

Why small firms prefer organic growth

Organic growth is the process of expanding a firm’s capabilities and client base through internal development. There are several advantages over M&A.

Firstly, it allows for a more controlled and gradual increase in business scale, minimising the risk and disruption associated with merging different corporate cultures and operational systems. Small firms value their close-knit teams and personalised client relationships, which can be strained in the aftermath of an acquisition.

Moreover, organic growth supports a firm’s brand identity and values. By hiring selectively, investing in technology, and expanding client services incrementally, small firms can maintain the integrity and quality that define their practice. This approach ensures that growth aligns with the firm’s long-term strategic goals and client expectations.

Tactics for achieving organic growth

1. Workforce expansion

   Strategic hiring is a cornerstone of organic growth, with 40% of small law firms planning to hire more lawyers, and 16% having done so already. By carefully selecting new talent that aligns with the firm's culture and values, small firms can enhance their expertise and service offerings. For instance, adding specialists in niche areas of law can open up new revenue streams and attract a broader client base. At , we recently hired a corporate law expert to support our work in the childcare and education M&A sector, enabling us to better serve clients in the fast-growing tech sector. This strategic hire not only broadened our expertise but also positions us as leaders in a niche market.

2. Investing in legal technology

   Leveraging legal technology is crucial for boosting efficiency and staying competitive. And it’s high on the agenda: almost half (56%) of firms have either spent or are planning to spend more in this area in the next 12-18 months. Tools such as case management software, AI-driven research platforms and secure client communication systems can streamline operations and reduce overhead costs. For example, investing in and leveraging our case management system has significantly improved our workflow, allowing us to handle more cases with the same number of staff. This investment has been instrumental in supporting our growth while maintaining high standards of client service.

   Want to transform your legal workflow? Find out how Lexis+ AI can help here.

3. Marketing and business developmentIncreasing visibility and expanding the client base through targeted marketing and business development efforts are essential for organic growth. Utilising digital marketing strategies such as SEO, content marketing and social media engagement can increase your personal brand, attract new clients and enhance the firm's reputation. Networking and establishing partnerships with other businesses also play a pivotal role.

We launched a comprehensive digital marketing campaign that includes presentations, webinars, speaking opportunities and blog updates (such as this one). This strategy, combined with our social media marketing strategy, has not only boosted our online presence but also positioned us as thought leaders in the SME law firm community.

Are there advantages in an M&A growth strategy?

While the focus here is on organic growth, it's important to acknowledge the potential advantages of M&A. Acquiring or merging with another firm can provide immediate access to new markets, clients and expertise. It can also offer economies of scale, potentially reducing costs and increasing profitability.

For example, a merger can quickly expand a firm's geographical reach or diversify its practice areas, providing a competitive edge in the marketplace. Our firm are actively searching for such opportunities, but organic growth remains our primary strategy.

Takeaways for independent firms

1. Develop a recruitment strategy: identify areas where additional expertise is needed and seek out candidates who fit your firm's culture and values. Hiring a specialist in a growing field can position your firm as an industry leader.
2. Invest in technology: allocate resources to modernise your practice with legal tech solutions that enhance efficiency and client service. Evaluate the latest tools and implement those that offer the best return on investment.
3. Increase marketing initiatives: create a robust marketing strategy that includes online and offline tactics. Use SEO, content marketing and social media to increase your firm's visibility and attract new clients. Hosting webinars or writing informative articles can position your firm as a thought leader.
4. Strengthen client relationships: focus on creating lasting relationships with clients through exceptional service and regular communication. Personalised service can set your firm apart and lead to repeat business and referrals.

By adopting these strategies, independent law firms can achieve sustainable growth while maintaining their unique identity and client-focused approach. These steps have allowed us to grow organically, ensuring that we remain true to our values and continue to provide exceptional service to our clients.

Read the Bellwether 2024 report here