How are BigLaw firms faring in first quarter? Billable hours are at 15-year low
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Demand for legal services is down slightly, while lawyer head count is increasing—a combination that is resulting in a decline in average billable hours, according to a survey of BigLaw firms by Wells Fargo’s Legal Specialty Group.
Demand decreased 1.5% in the first quarter, compared to the same period in 2022, according to coverage of the report by Reuters, Law.com and Bloomberg Law via Above the Law.
Lawyer head count, on the other hand, increased 4.8%, compared to the same quarter in 2022, according to the survey of 66 of the nation’s top 100 grossing law firms.
Annualized billable hours in the first quarter stood at 1,536 hours, down from 1,634 hours in the first quarter of 2022, Reuters reported.
The billable hours figure is at its lowest point in at least 15 years, according to Owen Burman, managing director of Wells Fargo’s Legal Specialty Group, who spoke with Bloomberg Law.
Some associates are on pace to bill only 1,000 hours per year, Burman told Law.com.
Those levels are “not sustainable,” he said. “We would expect to see some more adjustments if the demand picture doesn’t pick up. And unfortunately, we don’t see it picking up.”
The survey had some good news. Firms increased revenue 4.7% in the first quarter, thanks to “solid growth in litigation and robust rate increases,” the survey report said.
Even though mergers and acquisitions work has dropped off, “these firms show really strong diversification,” Burman told Law.com. “They’re able to keep demand decline relatively modest. It shows the strength of the business and diversification they have.”
