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Mid-sized US law firm market starting to stabilise, research finds

'It is more important than ever before for leaders to think strategically'

6 October 2014

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By Manju Manglani, Editor (@ManjuManglani)

The market for mid-sized US law firm services is starting to show signs of stability and improvement, according to benchmarking research covering the first half of 2014.

Overall demand for legal services from mid-sized US firms declined by 0.6 per cent in the first seven months of 2014 compared to a year earlier, Thomson Reuters' Mid-Size Law Firm Report says. That decline was, however, considerably less than the decline of 2.7 per cent seen in all of 2013.

While mid-sized firms continue to lag behind their larger peers in the AmLaw 200, average fees worked have also improved, rising 2.2 per cent through the first seven months of the year. This is a marked turnaround from the 0.7 per cent decline seen in 2013.

"The challenge for mid-size firms will be to capitalise on the positive momentum reflected in the improved demand and rates numbers seen in the first half of 2014," commented Mike Abbott, vice president of client management and global thought leadership at Thomson Reuters.

"Mid-size firms face unique challenges because of their relative lack of scale and greater reliance on litigation practices compared with their larger counterparts. At the same time, there are opportunities for mid-size firms to be more focused and nimble.

"We are seeing indications that leaders of many mid-size firms are bolstering key practices, investing in technology and looking at innovative ways to improve the efficiency of service delivery and be more proactive in their client relationships in order to improve their business."

The report argues that "it is more important than ever before for leaders of mid-size firms to think strategically, to focus on bolstering key practices, to take a careful look at their firms' use of technology and how it might be expanded to better serve their clients, to consider all of the ways in which their firms might improve the efficiency of service delivery, and to be increasingly proactive in their client relationships. Indications are that the leaders of many mid-size firms are beginning to focus their efforts in precisely these ways."

According to separate research by Thomson Reuters covering leaders of 47 mid-size firms, the three most positive factors affecting their firms' performance in 2013 was:

  • winning new business based on their firms' values (45 per cent);

  • becoming more efficient (43 per cent); and

  • growing select practices (38 per cent).


They identified the same three factors as the most important ways for them to drive growth in 2014, but by even wider margins.

The Mid-Size Law Firm Report is based on real-time data on law firm performance for the segment of the law firm market outside of the AmLaw 200, with an average size of 143 lawyers.

 

 

 

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