Skip to content
Legal Data & Metrics

2020 State of US Small Law Firms: While many firms talk about challenges, some make changes

· 5 minute read

· 5 minute read

In the "2020 Report on the State of U.S. Small Law Firms," Thomson Reuters turns its attention to this often under-researched segment of the legal market

While nearly every aspect of American life has undergone significant change this year due to the pandemic and ensuing economic crisis, some things have remained relatively constant — at least for the small law firm sector. In fact, some critical aspects of how small law firms run their businesses and the headwinds they face have remained largely unchanged over the past several years.

With that, Thomson Reuters, has turned its attention for the fourth time to this often under-researched segment of the U.S. legal market to produce the 2020 Report on the State of U.S. Small Law Firms.

In particular, the report noted a few key themes:

1. Small law firms continue to face a number of significant challenges, many of which have remained consistent year-to-year — As has been the case in previous versions of this report, the most frequently cited example of a significant challenge for small law firms is acquiring new client business, with 26% of respondents rating this a significant challenge. This is followed closely by spending too much time on administrative tasks and not enough time practicing law (17%).

2. Most small law firms have yet to take meaningful action — Despite several years of reports that small law firms are facing the same set of challenges, relatively few small law firms report that they are actually implementing a plan to address them. For example, of those firms stating they face a challenge either acquiring new business or managing administrative tasks, fewer than one-third have actually implemented a plan to deal with these problems. This too is a trend that’s held consistent through the various editions of the report — recognition of the problems posed by various challenges, even by a large number of respondents, has not led to significant action.

3. There is a real opportunity for those firms willing to make the first move — In business, there is the concept of the “first-mover advantage,” which holds that there is an advantage to be gained by being the first to offer something new to the market. While it is undoubtedly true that some small law firms have already taken a leading role to innovate their service delivery models, there remains ample fertile ground for other firms to implement similar changes, whether by improving business development acumen, creating optimal internal efficiencies for managing their firms, or adopting technology to streamline their practice.

Small law firms — particularly those who rely on individual consumers rather than corporate clients to make their livelihood — should appreciate that the same economic pressures they feel in their personal lives are affecting their potential clients as well. As a result, these potential clients may become even more price sensitive and reticent to seek professional legal help. And this will only compound the challenges faced by small law firms.

For the majority of firms plagued by administrative inefficiencies and the difficulty in cultivating new clients, there is no better time than now to move past the awareness stage of the problem and toward the implementation of a new plan for improvement.


Download a copy of the 2020 State of U.S. Small Law Firms report to see how other small law firms have taken steps toward improvement, and what other actions small law firm leaders should consider.

More insights