Study shows dip in demand for legal services nationwide
study-shows-dip-in-demand-for-legal-services-nationwide
2 min read

Study shows dip in demand for legal services nationwide

Free on-demand webinar

How to Get Clients to Pay On Time: 15 Tips in 15 Minutes!

Watch Now

Recommended by

ForbesAdvisor - The Best Legal Billing Software Of 2022

Learn How You Can Get More Reviews For Your Law Firm

Download free guide
Share:
2 min read

Thomson Reuters has released its quarterly Peer Monitor Index study which tracks key factors related to the legal industry, including demand for services, productivity, billable rates, and expenses across law firms. Overall, law firms are seeing a slight drop-off in demand for their services after several years of very slight growth. Industry-wide, there is a 0.3% drop-off in demand for legal services, after being up in both 2015 and 2014. Notably, billable rates that lawyers charge their clients is up 3.1% for the third quarter of 2016 alone, while expenses are up more than 4%.

Changes in Demand Varies Greatly by Practice Area

The slight drop-off in demand for legal services in not uniform across practice areas, with several practice areas even showing growth for the year. The relative change in demand in the third quarter of 2016 in various practice areas noted by the report include:

  • Patent Prosecution: +1.0%
  • Corporate/Transactional: +0.5%
  • Labor/Employment: -1.6%
  • Real Estate: -1.7%
  • Bankruptcy: -1.9%
  • Litigation: -1.9%
  • Tax: -2.0%
  • Patent Litigation: -2.6%

Midsize Firms Enjoying Greater Growth than Larger Counterparts

The report points out that the changes in demand are also not uniform across size of firms, with the largest firms (the AmLaw 100) suffering the biggest drops, while the “AmLaw Second Hundred Firms” doing somewhat better. But besting both of those firms are Midsized firms, which actually enjoyed a growth in demand for legal services over the course of the year, including a 1.2% uptick in demand for litigation services. The report suggests this may be due to cost-conscious clients seeking more cost-effective legal representation.

Collection Efforts Remains a Huge Source of Unrealized Gains

While the report focuses on demand, billing rates, and expenses that firms are facing, one notable statistic reported is that, nationwide, firms have a “collected realization” rate on bills of 82.9%. This statistic is actually the highest rate of the year, but the clear implication is that a full 17.1% of bills – or, in other words, more than one-sixth of the work that firms are billing for – is not being collected. This suggests that, while billing rates may go up slightly, expenses might rise, and demand for services will fluctuate, the ability of firms to actually collect what they bill for may well be one of the most significant areas in which profits could rise for firms of all sizes.

Get Started with TimeSolv Today

TimeSolv offers backend automated office solutions that brings big-firm innovation to all types of firms, no matter the size. We provide low-cost automated solutions to optimize your firm’s billing, collection, expense tracking, internal reporting, and project management efforts, and offer free training to ensure that you are maximizing all the features that TimeSolv has to offer. To start your free trial of TimeSolv today, click here.

Stay up to date with the latest articles, educational resources, and news

Subscribe to our newsletter

You might also like

Increase Your Billable Hours Seven Tactics for Optimizing Your Time

Increase Your Billable Hours: Seven Tactics for Optimizing Your Time

As the writer Annie Dillard says, “How we spend our days is, of course, how we spend our...
How Fixed-Fee Billing Can Enhance Law Firm Profitability

How Fixed-Fee Billing Can Enhance Law Firm Profitability

The traditional hourly billing method has been the default in legal practice for the...
Tip of the Week Streamline Time Tracking with Read-Only Task Code Narratives

Tip of the Week: Streamline Time Tracking with Read-Only Task Code Narratives

This week, we're excited to introduce an enhancement that enables users to make task...
How to Leverage Automation for Faster Billing and Payment Cycles

How to Leverage Automation for Faster Billing and Payment Cycles

Any legal professional or administrator can attest to the fact that creating and sending...
Tip of the Week Introducing the Ability to Mark Expenses as Vendor Paid

Tip of the Week: Introducing the Ability to Mark Expenses as Vendor Paid

In the fast-paced world of legal and professional services, staying ahead requires more...
Tip of the Week Create Consolidated Invoice Groups with Ease!

Tip of the Week: Create Consolidated Invoice Groups with Ease!

In the dynamic world of legal and professional services, staying ahead often means...
Tip of the Week Introducing Unique ID for Time Entries

Tip of the Week: Introducing Unique ID for Time Entries

In the fast-paced world of professional services, managing time efficiently is paramount...
Take Your Law Firm’s Expense Tracking to the Next Level

Take Your Law Firm’s Expense Tracking to the Next Level

When it comes to your legal firm’s success, every minute counts—and so does every...
Five Mid-Year Mistakes Every Law Firm Makes and How to Fix Them

Five Mid-Year Mistakes Every Law Firm Makes and How to Fix Them

It’s official: we’ve made it halfway through 2023. And while there’s not a big mid-year...

Law Firm Time-Saving Hack: Making eSignatures Faster with LexShare, LexSign, and Outlook

As an attorney, you’re no stranger to the frustrations of obtaining signatures on legal...