Credit: AdobeStock Realization Rates Keep Falling in the Am Law 200. But Does That Matter?
While a few firms attributed declining realization to market factors, the majority are gladly exchanging lower realization for strong rate increases.
March 25, 2024 at 05:00 AM
3 minute read
What You Need to Know
- Realization rates continue to decline in Big Law, with many Am Law 100 firms reporting 1% to 3% lower realization in 2023.
- While some firms blamed market factors, others said that several years of strong rate increases more than offset smaller declines in realization.
- Firm leaders are hoping a more certain economy in 2024 will yield higher realization.
Compared to law firms' advertised rack rates, collections in Big Law continued to slump in 2023, according to reports from Am Law 200 firms that disclosed last year's realization rates to The American Lawyer this spring.
In a group of 86 Am Law 200 firms, those within the Am Law 50 saw an average realization decline of 2% in 2023. Smaller firms fared better: The Am Law 51-100 had realization fall by an average of 1.6%, while the average decline was 1.3% for the Second Hundred. Meanwhile, realization at midsize firms remained flat.
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