Source: LegalDive by Lyle Moran
Demand also ticked up slightly and firms reduced associate hiring to slow expense growth, according to the Thomson Reuters Institute.
For the third straight quarter of 2023, law firms increased their rates at a clip that set a post-global financial crisis high for year-over-year quarterly growth.
The firms raised their rates 6.3% in the third quarter compared to the same period in 2022, according to a Thomson Reuters Institute report. The year-over-year growth in so-called “worked rates” was 5.5% in Q1 and 5.9% in Q2 of 2023.
“This is somewhat counter to historical norms; typically, firms tend to set rates in the first quarter and essentially lock in rates for the rest of the year,” a Thomson Reuters press release said. “So far, rate growth has accelerated since the first quarter of this year.” The rate increases helped law firms maintain profitability in the third quarter. The Thomson Reuters Institute’s Law Firm Financial Index held at its six-quarter high of 50 points.
However, in an effort to trim expenses, law firms have significantly reduced their fall hiring of new associates. “Restrained hiring to reduce expenses and aggressive rate strategies are positively impacting both the top and bottom lines, helping firms set themselves up for what could be a strong finish to 2023,” said Paul Fischer, Thomson Reuters’ president, Legal Professionals, in a prepared statement.
Read full article: https://www.legaldive.com/news/law-firms-raise-rates-2023-thomson-reuters-institute/700627/
