'Big Law' finds renewed strength at the top — Thomson Reuters Peer Monitor Index shows strength at the largest firms, weakness elsewhere in large law market

Eagan, Minn., The large law firm market slowed across several key metrics including demand, rates and productivity in the second quarter, according to the Thomson Reuters Peer Monitor Index (PMI). The PMI, which measures the relative health of the U.S. large law firm market, fell three points to 50.

Demand for the large law firm market was down 0.1 percent. Year-to-date, demand growth is nearly neutral, up barely 0.1 percent. Only the Am Law 100 market segment showed demand growth during the quarter, while demand fell for Am Law Second Hundred (101-200) and Midsize firms (firms outside the largest 200). Am Law 100 also is the only market segment with positive demand growth through the first six months of the year.

Worked rates grew 2.8 percent in the second quarter, slightly less than in the first quarter.

Transactional practices were mixed. Corporate practices were flat despite continued growth in M&A activity. Real estate declined. However, tax work was up during the quarter.

Litigation work fell 2 percent, but the decline was not across all segments. Am Law 100 firms saw flat demand for the quarter, and have grown litigation 0.2 percent year-to-date. Meanwhile, the other market segments, Am Law Second Hundred and Midsize, saw litigation decline both in the second quarter and year-to-date.

“While the overall market continues to struggle to find traction this year, we are seeing signs of improved strength across ‘Big Law,’” said Mike Abbott, vice president, Client Management and Global Thought Leadership, Thomson Reuters. “The market tier made up of the largest firms is showing more widespread stability and growth than their smaller counterparts. In recent years, while many of the largest firms have been able to hold their own or even grow, some large firms had seen portions of work shift to more down-market segments, often in search of more cost-effective options. We are now seeing a greater flow of ‘big ticket’ work such as litigation and M&A to the ranks of the largest national and global firms.”

A copy of the Q2 2017 PMI report can be downloaded here: http://legalsolutions.thomsonreuters.com/law-products/solutions/peer-monitor/index-report-access.

The PMI, produced by Thomson Reuters, is a composite index of law firm market performance using real-time data drawn from major law firms in the United States and key international markets. A PMI of 65 or greater indicates strong law firm market performance.

For more information on Peer Monitor, visit http://legalsolutions.thomsonreuters.com/law-products/solutions/peer-monitor.

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