MALVERN, PA — The CLM (Claims and Litigation Management Alliance) has released new survey findings showing that law firms across the country are facing the most significant talent shortage in decades, forcing many to decline client work and rethink their business models. The results were presented at the CLM Litigation Management Symposium in Chicago on October 15, 2025.
According to the Law Firm Talent Survey, 60 percent of participating insurance defense and litigation firms are currently turning away cases due to capacity limits—a situation nearly unheard of just a few years ago. Recruiting new attorneys has become the industry’s top concern, with 90 percent of respondents reporting greater difficulty than five years ago, and half describing conditions as “much worse.” Attrition rates remain elevated as lawyers seek higher pay, less stressful roles, or move into practice areas outside insurance defense. Retention challenges are particularly acute among small and mid-sized firms, with more than 70 percent citing increased difficulty keeping staff.
Rising salaries, recruiting expenses, and administrative costs are adding financial strain, while 90 percent of firms voiced concern about their ability to meet client expectations. Respondents cited slower reporting, delayed case handling, and reduced trial capacity as common outcomes. The survey also indicated that many insurance carriers are not fully aware of how staffing shortages are affecting legal service delivery.
“The survey was conducted as part of CLM’s Litigation Management Task Force, which we established in the summer of 2024 to foster industry collaboration and address these growing pressures,” said Susan Wisbey-Smith, President of CLM. “The work of the Task Force showcases the value of law firms and carriers working together to address shared challenges through innovative approaches.”
Among the Task Force’s recommendations are stronger career development programs, flexible work arrangements, and the use of generative AI tools to reduce administrative burdens. Other proposals include revisiting billing structures, easing audit-related friction, improving communication around firm capacity, and creating opportunities for younger attorneys—such as dual-attorney appearances—to accelerate training and relieve workload pressures.
The findings underscore a structural shift in the legal labor market, where talent scarcity and rising client demands are converging to reshape the business of litigation. CLM’s full report, “Overwhelmed and Understaffed,” is available at theclm.org.
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