Written by: Karen Sloan
(Reuters) - U.S. law firms ended 2022 with a whimper thanks to a worsening drop in client demand, declining productivity and rising expenses, a new report found.
Demand was down 3.9% in the fourth quarter, while productivity fell more than 7% year-over-year, according to the latest edition of the Thomson Reuters Institute’s Law Firm Financial Index, released Tuesday. The index tracks key financial metrics across 170 large and midsized law firms.
Lawyers billed an average 112 hours per month in the fourth quarter of 2022 — down from 121 hours the previous year. Every practice area tracked by the index saw a decline in client demand over the fourth quarter of 2021.
Demand for M&A work was down nearly 17%, followed by real estate, which was down 11.5%. Demand was down by 10% for both bankruptcy and tax practices. Profits per partner declined 4.5% over the past 12 months, the index found.Full Article