The challenges faced by large law firms in 2022 – including but not limited to inflation, war in Ukraine, fears of recession, and rising interest rates – led many to fall short of expectations set after a record-breaking 2021. Demand for legal services in 2022 did not dry up by any means, but any bit of slowing, when paired with the rising costs of the hiring frenzy Big Law went on the year before, would inevitably impact bottom line growth.

The emerging challenges these firms faced last year have not gone away through Q1 2023, but indications from ALM's recently released Q1 2023 Economic Flash Survey point to a resilient group poised to rebound.

While expectations were surely adjusted, it appears that firms are closer to getting back on track after Q1 2023. When asked about firm performance so far in 2023, the plurality of respondents (38%) replied 'slightly better than expected,' while another 36% remain in line with expectations. Among Am Law 200 respondents specifically, 52% have exceeded expectations thus far in 2023, compared to 37% of responding firms outside of the Am Law 200.