Credit: Grispb/Adobe Stock 'We Knew It Would Get Worse Before It Got Better': Law Firm Profitability Index Hits New Low
Law firms can see some signs of improvement, including moderating expenses and transactional demand that remains above pre-pandemic levels. But a shaky economy in 2023 could put that in jeopardy.
February 14, 2023 at 12:01 AM
4 minute read
A law firm profitability index reached a new low at the end of 2022, as hits to revenue and productivity "have nearly eaten through" record profits from 2021, according to a new analysis.
The latest Law Firm Financial Index report from Thomson Reuters shows contracting demand, along with a big dip in productivity, combined to take a significant chunk out of firm profits toward the end of the year. Those factors, as well as a historically high baseline of the fourth quarter in 2021, dropped the index—a composite score of firm profitability—to its lowest point ever.
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