Strong Fourth Quarter for Law Firm Market
The large law firm market had a surprisingly strong fourth quarter as demand, rate growth and productivity all rose in the same quarter for the first time in almost five years.
The Thomson Reuters Peer Monitor Index (PMI), which measures the relative health of the U.S. large law firm market, rose a sharp 11 points to 60 — one of the largest quarterly gains in the index in several years.
Demand for law firm services rose 1.0 percent, the biggest quarterly gain since Q1 2016. Demand declined slightly for all of 2017, shrinking 0.2 percent — marking the second consecutive yearly decline in demand.
Rates rose 3.4 percent — the highest growth in almost four years. For all of 2017, rates rose 3.1 percent — the best annual performance since 2014.
While productivity gained only 0.1 percent, it was the first positive quarter since 2013, reflecting both rising demand and restrained headcount growth.
All of the largest practice areas — litigation, corporate and labor & employment — were up in demand for the first time in more than six years. Litigation broke a string of 22 consecutive quarterly declines, and rose 0.3 percent.
