Here’s one of our favorite time-series from Thomson Reuters’ “Peer Monitor” showing “Growth in Demand” for law firms (defined as billable time for non-contingent matters) going back 10 years. You can see that it took a swan-dive from a healthy ~5% annual growth level before the meltdown to a low of nearly -10% but since then has been tracking right around +/- 0%. This is a classic pattern for a mature industry, to wit one characterized by a battle for market share among competitors.
Next we segregate litigation from transactional services using the same dataset. You can see that since the meltdown–a full decade in the rear-view mirror at this point–litigation demand has never been positive with the exception of two brief blips above water.
Finally, we zoom in on the past six years, breaking litigation demand into various law firm “sectors”–the AmLaw 100, Second 100, “Midsize” firms, and then “all segments.” This clearly shows that for the last five years the growth of litigation demand/all segments has been below 0%.
Without naming names, we will venture the opinion that a fair amount of what’s published and discussed about demand by practice area is anecdotal. Although there’s hopefully-untrue lore in journalism that “three examples constitute a trend,” we strenuously try to avoid that temptation.
And we would be the first to roundly affirm that this has been a discussion of averages; some firms will have enjoyed vastly different experiences–for better and for worse. Just because more Americans are obese than ever before doesn’t mean skinny people have disappeared.
Upcoming installments in this series will address additional evidence, as well as the long-run impact of newish developments on this landscape including predictive AI, litigation funding, and the changing composition of the sources of supply for “legal services”–of which law firms are a subset.