After five years in a row of gains, revenue and billing-rate increases have slowed.
Instead, headcounts and salaries are advancing faster, eating into profit growth.
According to the annual American Lawyer magazine ranking of the top 100 firms in the U.S.: “The great run may be over. The sharp decrease in deal activity is well-known. And the classic countercyclical practices — litigation and bankruptcy — have not yet lifted all boats. Also, there is a structural indicator that points to weakness. For the first time since the bust of 2001, the growth in head count noticeably exceeded the growth in revenue per lawyer. Coupled to the body count was the much brooded-about associate salary increases last year. Many consultants argue that those costs will be fully felt this year, precisely when demand for high-priced legal help may fall.”
