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8 Statistics that Indicate Big Law Firms are in for Big Changes in 2017

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If 2017 proves to be anything like the past two years for Big Law, brace yourselves, warns David Lat. The founder and managing editor of Above the Law warns that the sky could very well be falling for big law if the latest American Lawyer Am Law 100 report is any indication. It notes that while Big Law has shown overall growth in revenue, revenue per lawyer, and profits per partner, “the continued flattening of demand for legal services and patchy conditions in core markets…saw growth slow to its lowest level since the Great Recession.”

If you think your firm is immune to these issues, consider these statistics:

1. In its analysis of the 2015 Am Law 100 list, The American Lawyer noted that the gap between the highest-performing firms and others included in the Am Law 100 ranks has continued to widen.

2. The $5 million gap in average profits per partner between the most- and least-profitable firms in the Am Law 100 is the largest in its history, according to The American Lawyer.

3. The demand for law firm services, as tracked by Thomson Reuters Peer Monitor, was essentially flat in 2015. They expect this to continue through 2017.

4. While there was slight growth in real estate and corporate practices, demand has declined for litigation and practice litigation. This has been a trend for several years, even though litigation practices make up a third of the legal work, according to Thomson Reuters Peer Monitor.

5. Corporate law departments are getting more work than law firms. In its 2015 Chief Legal Officer Survey of some 258 corporations, Altman Weil found that:

  • 51% of respondents reported increasing the internal budgets of their law departments.
  • 25% percent reported decreased in-house spending.

6. Law firms are feeling the shift. According to the 2016 Law Firms in Transition Altman Weil Flash Survey that received responses from 356 firms with at least 50 lawyers, 68% reported that they had already lost work to corporate law departments and 24% view it as a threat.

7. The same survey reports that most firms say they’re overstaffed – overcapacity is affecting profits at 60% of all law firms and 76% of the larger ones.

8. Seventy-one percent of the top-performing law firms use technology that helps them “monitor the progress of matters, resource commitment and budget status in real time on a matter basis,” according to Altman Weil.

Do you want to defy the trends and thrive in 2017? Take a minute to find out how you can stand out in a crowded marketplace by checking out this blog post: Build Your Law Practice with 27 Marketing Ideas Straight from the Experts.

Introhive | Sharpen Your Law Firms Competitive Edge | 8 Statistics that Indicate Big Law Firms are in for Big Changes in 2017

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Sharpen Your Law Firm’s Competitive Edge