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News: A ray of hope for the law firm industry during the first quarter of 2012

There were some signs of hope for the law firm industry during the first quarter of 2012, as demand grew modestly, reversing the decline seen in the fourth quarter of 2011. But while demand growth is good news, a similar growth rate in headcount meant that there was no change in the industry's productivity numbers.

Overall, revenue growth of 1.2% was driven by a 1.5% increase in demand and a moderate increase in rates.

However, there were notable differences across market segments.

While revenue growth was strong for Am Law 51–100 firms and firms outside The Am Law 200, Am Law 1–50 and Second Hundred firms saw virtually no growth. Demand growth was also patchy. Am Law 51–100 and Second Hundred firms saw solid demand growth, while smaller firms saw demand continue to decline. Am Law 1–50 firms saw just a 0.6% increase.

Rate increases continued to grow at a similar rate to 2011, and at a higher than in the two years prior to 2011, but still lag behind historical averages.

These results are based on a sample of 176 firms (81 Am Law 100 firms, 44 Second Hundred firms, and 51 additional firms).

With the current lingering economic crisis, the legal sector will also have to find and implement a new measures on the human resources side of operations, as pressures on the reducing overall cost remain.

——More information——

The Am Law Daily- Citibank Report Shows Modest Growth in Demand for Law Firms' Services

Am Law 100 Profitability Index