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Screenshot of a breaking news alert e-mail from Q2 2017
The large law firm market slowed again in the third quarter, as declining demand more than offset higher rates, according to the Thomson Reuters (NYSE:TRI) Peer Monitor Index (PMI). The PMI, which measures the relative health of the U.S. large law firm market, fell one point to 49.
Demand for the large law firm market fell a sharp 1.9 percent – the largest quarterly decline in four years. After being mostly positive through the first half of the year, demand year-to-date is now down 0.6%. The weakness in demand is not evenly spread across the market segments. Am Law 100 managed to grow demand 0.1% in the third quarter and is up 1.1% year-to-date, while Am Law Second Hundred and Midsize were down both in the third quarter and year-to-date.
Continued strength in rates helped to partially offset the weaker demand in the third quarter, as rates rose 3.1% – tying second-best mark since Q2 2014.
Nearly all major practice groups had weaker demand in the third quarter. All of the transactional practices pulled back slightly. Litigation fell 3.5%. Through the first nine months of 2017, litigation work was down 2.2% – the weakest performance for the first three quarters of any year since 2013.
While much of the large law firm market struggled in the third quarter, we continue to find that certain pockets of the market are thriving,” said Mike Abbott, vice president, Client Relations and Global Thought Leadership, Thomson Reuters. “While many of these firms happen to be in the tier of the largest firms, we are also seeing successful strategies being executed across various firm sizes and geographies. We are striving to identify some of the specific dynamics and commonalities that define these outperforming firms.