2023 Report on the State of the Legal Market by Thomson Reuters

Each year I look forward to the State of the Legal Market report in order to get a more granular look at the past year in legal services.

In 2022, the demand for transactional law firm services declined, most notably in Big Law. But law firms continued to hire apace. The result was a drop in productivity and profits. Profit Per Equity Partner growth was down in 2022. But PPEP is still at a healthy level compared to pre-pandemic.

That is the top line view from the new 2023 Report on the State of the Legal Market by Thomson Reuters with the Georgetown Law Center on Ethics and the Legal Profession.

The following three charts illustrate the slow down in demand and PPEP growth as well as the fact that profit per lawyer is still good compared to 1Q 2020.

This report is a one-of-a-kind. It has has 22 more charts, Including associate compensation, expenses per lawyer, lawyer turnover, collection realization, and more. If you work for a law firm, or if, like me, you provide solutions to law firms, there is certain to be data which will round out your view of 2022 and give you a picture of what 2023 may bring.

You can register for a free download of the full report here:

https://www.thomsonreuters.com/en-us/posts/legal/state-of-the-legal-market-2023/

– Maureen

What IS the State of Diversity in Law Firms?

February is Black History Month. It’s a good time to look at Diversity, Equity, and Inclusion (DEI) in our own spheres, to take stock of how we are doing today. The common knowledge is that diversity is moving slowly at most law firms. But is there any data, particularly any granular data, over time?

Enter the NALP “2021 Diversity in U.S. Law Firms” report by the National Association for Law Placement, Inc. (NALP). I highly recommend this report for its detailed, annual data on diversity in U.S. law firms. The report is a free PDF download.

Source: NALP 2021 Report on Diversity in U.S. Law Firms

As you can see from the graph above, the growth in Black Partners has been modest. The percentage of Black Partners is 2021 is 2.22%, up from 1.7% in 2009. The NALP Diversity report shows data both for “People of Color” as well as for Black, Asian, and Latinx people. The granular view is essential as the growth of Black partners lags the growth of “People of Color.” The reality of these figures speaks for itself.

Source: NALP 2021 Report on Diversity in U.S. Law Firms

While the overall growth in diversity of Associates is improving, the growth for Black Associates is slow. From 4.66% in 2009 to 5.22% in 2021, with an apparent dip from 2011 to 2016, the percentage of Black Associates is on the slow rise again.

Below is the table from the NALP table with the detail on demographics in U.S. law firms.

Source: NALP 2021 Report on Diversity in U.S. Law Firms

I have barely scratched the surface of the rich data which the NALP report provides on diversity in U.S. law firms, including women, LGBTQ lawyers, and veterans by state and by size of law firm. My objective was to crystalize for myself what the current state of diversity for Black lawyers in U.S. law firms is today and the trend lines.

You can find the report here: National Association for Law Placement “2021 Report on Diversity in U.S. Law Firms.”

-Maureen