Daniel Grimsrud, Board Chair, Best & Flanagan

In an interview with Invest:, Daniel Grimsrud, board chair of Best & Flanagan, identified private wealth planning and business services as drivers of growth, and noted that talent retention and AI integration remain key priorities for future success given wider consolidation trends.

What is your overview of the legal and advisory sector in the Twin Cities, and what trends stand out?

One significant trend is consolidation. There is ongoing movement of national firms into our market, as well as every other market. The large firms are getting larger and consolidating. At the same time, there is more opportunity for boutique firms, which are small groups of professionals specializing in niche areas.

For Best & Flanagan, we find ourselves positioned between these two trends. Some may question whether this middle ground will continue to exist, but we have been encouraged by the fact that our client base continues to be well-served by a firm like ours. This is not always the case with some of the larger firms.

Given that Best & Flanagan operates in a wide range of legal practices and services, which practices and services do you expect to be the main drivers of growth?

The two main areas that come to mind are private wealth planning and business services. Private wealth planning includes estate planning and generational transition planning. There is currently a tremendous wealth transfer underway, primarily from the baby boomer generation. I believe this is the largest generational wealth transfer in history, making this area particularly active right now. Additionally, real estate and litigation have always been cornerstones of our practice, and that continues despite the fact that 2024 was slower in real estate.

Our community also has a significant number of Fortune 500 and Fortune 1,000 companies per capita, likely more than any other community in the country. This creates an ecosystem of smaller, family held or closely held businesses that grow around these larger companies. These smaller businesses form a key part of our client base, presenting ongoing opportunities for us.

Which industries or sectors do you expect to be the main drivers of growth moving forward?

For us, it is less about specific industries and more about the makeup of the client. We excel at serving closely held family businesses with annual revenues ranging from $10 million to $250 million. These businesses often serve, either directly or indirectly, the larger companies that are typically served by national firms. This is why even as we work across many industries, I would not say we have an industry-specific focus. We tend not to work as much in heavily regulated industries, such as those requiring FDA approval for products. Those cases are better suited for larger firms with highly specialized teams. Our clients are generally large enough to need regular legal help but not so large that they have in-house counsel or are best served by the large national firms that are built to serve large public corporations.

What differentiates Best & Flanagan from other law firms operating in the Twin Cities?

We strive to focus on practical solutions, efficiency, and being entrepreneurial partners with our clients. It is rare that the best answer from a client’s business perspective aligns perfectly with a theoretical answer from a law school exam. Therefore, we work hard to find professionals who are entrepreneurial, practical, and solution oriented.

One of our core principles is to avoid presenting clients with a list of risky or dangerous options and leaving them to choose. Instead, we aim to sit alongside our clients, helping them determine the best answer that serves both their business and legal objectives. This collaborative approach is what we aim to accomplish.

What are some common legal mistakes made by businesses and individuals that can be easily avoided?

One common mistake is that clients often engage in self-help at the front end. Many clients have had suboptimal experiences with lawyers in the past, which leads them to try to handle legal matters on their own initially. This can complicate situations that could have been resolved more easily with early legal intervention. The old saying, “an ounce of prevention is better than a pound of cure,” applies here, which is why we encourage clients to reach out early. A five-minute conversation can often prevent a problem that might take six months to resolve. After all, our business thrives when our clients are successful and their businesses are strong, as it is a win for everyone in the long run.

Are you paying attention to any changes in the legal and regulatory landscape that could potentially affect your business and your clients?

Consolidation continues to be an ever-present factor and something that we are trying to think about and understand. The conventional wisdom over time has been that the legal industry will evolve into a landscape dominated by a bunch of giant firms and a bunch of tiny firms. However, we continue to find that there is great opportunity in our space for clients who are not necessarily well-served by the really large firms but have broader needs than can be served by a small boutique.

The other ever-present factor, not just in our world but societally, is the AI conversation and the impact it is going to have. This is obviously an ongoing discussion. It is not just about the client-facing aspects of the business, such as getting the legal work done, but also about all the back-office tasks that every organization needs to manage. Figuring out how to stay on top of this and understanding how to leverage AI will, in my view, be the story of the next five years. The challenge will be to do this well without losing focus on the rest of the business that also needs attention.

What are the biggest challenges for Best & Flanagan, and how do these challenges relate to what is happening in the wider legal industry as a whole?

One of the biggest challenges, even though AI and other technology platforms are important, is people. To the extent we have a “secret sauce” it’s people. Almost all of our team members have direct exposure to clients, so we need individuals who engage well with clients, inspire confidence, and deliver excellent service. Finding and retaining such talent is a significant challenge.

In today’s environment, the focus on business generation has continued to increase. Other firms are always trying to find individuals who have a strong client base and lure them over. This phenomenon has been present in other industries for a long time but is relatively recent in the legal sector. Striking a balance between taking care of the people who generate a lot of business and valuing those who are not as focused on business development but are excellent professionals and practitioners is a tricky balancing act. This challenge is something that will continue to be difficult and unavoidable for the rest of my career.

What is your outlook for Best & Flanagan and for the overall legal sector in the next two to three years?

I have been at the firm for 23 years, and while we have grown a little bit organically here and there, we have always remained around the same size. We do not have a particular growth objective in terms of numbers. Instead, I would like to see us lean into and be disciplined about maintaining our practice focus. This means pursuing the right kinds of clients and the right kinds of work, as well as continuing to build relationships with others in our space.

For example, we want to be able to refer clients to a big firm when they have an FDA issue or an SEC issue that is beyond our capability. At the same time, we want to build relationships that allow us to receive opportunities when there is a situation where we can serve a client better in a particular circumstance. There is always a temptation in our industry to take on every piece of work that comes our way due to the pressure to generate business. However, I believe we will be better served by staying aware of what we are best at and focusing on that. While it might be easier to say we want to grow by 15%, that is not really our focus. Instead, we aim to be disciplined and strategic in our approach.