We saw some rays of hope in our industry results for the first half of 2023, amid the continuing challenges we have reported since early 2022. It's true that expense growth continued to outpace revenue growth as demand declined and the collection cycle lengthened. However, that demand decline has moderated from the first quarter and a good number of firms reported demand growth. We also saw expense pressure moderate. And while revenue growth slowed from the first quarter, firms could end 2023 with decent revenue growth if they are able to collect strong levels of mid-year inventory.

These results are based on a sample of 209 firms (85 Am Law 100 firms, 59 Second Hundred firms and 65 niche/boutique firms). 46 of these firms fit our definition of either international (less than 25% but more than 10% of lawyers based outside the United States) or global (at least 25% of lawyers based outside the United States). Citi Global Wealth at Work's Law Firm Group provides financial services to more than 900 law firms around the world and approximately 50,000 lawyers. Each quarter, the Law Firm Group confidentially surveys firms in the Am Law 100 and Second Hundred, along with smaller firms. In addition, we conduct a more detailed annual survey and produce the Law Firm Leaders Confidence Index semiannually. These reports, together with extensive discussions with law firm leaders, provide a comprehensive overview of financial trends in the industry as well as forward-looking insight.

The law firm industry saw modest average revenue growth of 4.0% through the first half of 2023 as demand declined and the collection cycle continued to lengthen. While the dollar value of hours logged increased, demand declined by 0.9%. This was a far better result than the average 2.0% decline in demand reported for the first quarter. Behind the averages, we see wide dispersion in the demand experience of individual firms, depending on their practice mix. Firms who are more dependent on M&A and capital markets work continue to have a challenging year. Meanwhile, litigation, regulatory, and bankruptcy and restructuring practices have been busy. We also heard that funds and investment management, private credit, energy, infrastructure and intellectual property practices have been active.