Coming off the heels of the record performance seen in 2021, law firms experienced a very different year in 2022. Declining demand, a longer collection cycle and a drop in accrual realization drove modest average industry revenue growth. Meanwhile, the cost of operating law firms continued to rise, with expense growth outpacing revenue gains. As a result, profitability declined for the majority of law firms—a sharp contrast to the extraordinary results of 2021. That said, the past three years since the onset of the pandemic have been highly unusual and we believe that it's worth looking at average annual performance since the last of the more "normal" years—2019. On that measure, the law firm industry has reported very strong average annual performance over the course of these past three unusual years.