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Small law firms are navigating rising costs, evolving client demands, and rapid technological change, but according to the Bellwether Report 2025, it’s not external pressures that pose the biggest threat to growth. It’s internal hesitation.

The report paints a clear picture: the firms that are falling behind aren’t necessarily underperforming or under-resourced. They’re simply stuck, unable or unwilling to make the decisions that would move them forward. Whether it’s fear of change, lack of time, or uncertainty around investment, it’s these internal roadblocks that are doing the most damage.

The numbers don’t lie

When asked what’s preventing their firm from achieving its goals, 37% of respondents cited the tough economic climate. That’s hardly surprising. But close behind were challenges rooted in the day-to-day running of the firm:

• 34% said lack of time for business development
• 24% pointed to fear of change
• 18% cited poor staff retention
• 14% highlighted growing competition

Strikingly, only 2% said poor client retention was an issue. The work is there. The clients are staying. So what’s the problem?

Paralysis by caution

Many firms appear caught between knowing they need to change and fearing the consequences if they get it wrong. Whether it’s investing in new technology, refining pricing models, or improving internal processes, decision-making often stalls due to perceived risk.

This hesitation is understandable, especially in small firms, where time and budget are tight, and the margin for error is slim. But as the report makes clear, doing nothing can be more damaging than doing something imperfectly.

Tim Rayner, small law market lead at ��˾����ҹ���� UK, puts it simply:

“Rather than major transformation, the story is about small but deliberate investments designed to sharpen competitive edge without overextending resources.”

 

The business development blind spot

The most common internal barrier? Time. Specifically, time for business development. For small firms already stretched by fee-earning, compliance, and client management, carving out hours for future-focused activity can feel like a luxury.

But it’s not. It’s essential.

Without active investment in business growth, whether through marketing, networking, or nurturing referrals, firms risk becoming invisible, even to their existing client base. The report shows that while some firms are beginning to increase their marketing and BD spend, for many it remains a “tomorrow task.”

The cost? Missed opportunities, stagnant client rosters, and overreliance on word-of-mouth.

Fear of change: the silent blocker

Fear of change is another major factor. One in four firms admitted that hesitation to embrace change was a barrier to growth. It’s easy to dismiss this as conservatism or stubbornness, but in reality it often comes down to fatigue, uncertainty, and the sheer volume of competing priorities.

Introducing a new tool, workflow, or pricing model means taking a leap—and potentially disrupting something that’s “good enough” in the short term. But good enough rarely stays that way for long.

Most firms already know where the inefficiencies are—they just struggle to find the time, headspace, or confidence to fix them. The intention is there. The execution is the challenge.

It’s not about radical change. It’s about marginal gains

The good news is that change doesn’t need to be disruptive to be meaningful. The firms seeing the most progress in 2025 aren’t the ones making dramatic moves. They’re the ones making small, strategic changes consistently, what the report calls “marginal gains.”

These firms are:

• investing in technology they know their teams will use
• setting clearer expectations with clients
• tweaking pricing structures to improve transparency
• making time for relationship-building, even in small ways.

None of these actions require a complete business overhaul. But together, they add up to greater agility, stronger client loyalty, and better profitability.

The real risk is standing still

In a market that’s moving fast, inertia is risky. The Bellwether findings show that the biggest growth barriers aren’t fierce competition or lack of demand. They’re internal delays: putting off what we know needs to be done.

For firms willing to step out of maintenance mode and into movement, even small steps can lead to big advantages.

The future of small law won’t belong to the biggest or the boldest. It will belong to the firms willing to keep moving—decisively, deliberately, and one smart decision at a time.