Thomson Reuters Peer Monitor — in conjunction with Georgetown University Law Center’s Center on the Study of the Legal Profession — recently issued its annual report on the legal market, which you can find here. Some highlights of 2012:
- growth in demand for legal services up by a mere .5%
- the number of lawyers increased by 2% (which put growth in productivity, i.e., number of hours a firm bills divided by number of lawyers, in negative territory)
- profits per partner grew modestly at 3.58% (partners at non-AmLaw 100 firms fared better than those from AmLaw 100)
- it was a banner year for global expansion of U.S. and international law firms (96 cross border law firm mergers took place)
The report analyzes some of the longer term trends behind these numbers. It’s a must-read.
As for 2013, the authors of the report predict “that most firms will continue to struggle to maintain profitability as the combined effects of slow demand growth, declining realization rates, and persistent overcapacity will continue to eat into profit margins. We do expect to see some growth in revenues and continued rigorous efforts to manage expenses, but overall we anticipate that there will be only modest growth in profits per equity partner in the current year – probably in the low single digit range.”