A survey from the Thomson Reuters Institute found that US lawyers are billing fewer hours than they have in decades amid a sharp decline in dealmaking, as more law firms announce redundancies.
Thomson Reuters Institute, which tracked data from 170 US-based firms, found that average hours worked per lawyer fell to 119 billable hours per month in the year to the end of November. That was the lowest level since it began tracking the data in 2007, when lawyers logged an average 134 hours per month.
The figures underline how a drop in demand for corporate lawyers in the past 12 months has combined with increasing expenses to decrease profitability across the sector. After a frenzied 2021, global deal making suffered a record fall in the second half of last year, taking a toll on law firms that had hired extensively to field soaring demand.
Also, law firms’ direct expenses rose 10.1 per cent through November 2022, the survey found, and overhead expenses were up 10.9 per cent — the highest levels since 2008.
The worsening outlook for the legal sector is a reversal from the hiring spree law firms embarked on at the start of the coronavirus pandemic.