2023 State of the Legal Market Report
The forecast for the 2023 legal marketplace calls for continued clouds and scattered storms.
That prediction comes on the heels of a strong 2022 but with looming questions about sustainability.
“In the latter part of 2022 and continuing into the new year, multiple challenges have emerged to threaten law firm profitability, including falling demand and productivity, rising expenses, changing client preferences, and economic turmoil,” says the Thomson Reuters 2023 Report on the State of the Legal Marketplace. “Indeed, one key metric — profits-per-equity partner (PPEP) — is down for the first time since 2009, which occurred during the last global financial crisis.”
The State of the Legal Marketplace is based on data from 170 large and mid-sized U.S. law firms.
“Throughout 2022, growing political and economic uncertainty significantly reduced clients’ appetite for transactional work — which had become the white-hot driver of demand throughout 2021 and the early part of 2022,” the report says. “Indeed, possibly the most prominent development in the legal industry in 2022 was the substantial slowing in demand growth that firms experienced throughout the year.”
Read the 2023 Report on the State of the Legal Marketplace.
Why choose Lawyers Mutual for your financial protection? One reason is experience. Lawyers Mutual has been in business since 1977 and insures more than 8000 lawyers in North Carolina. We’ve been providing continuous protection from professional liability to NC lawyers longer than any other insurance company. Another reason is stability. The company’s financial strength is absolute. Since 1999, Lawyers Mutual has paid dividends fourteen times, with more than $8 million dollars returned to policyholders since 2011. Want even more reasons? Visit our website, give us a call, or ask a colleague why Lawyers Mutual is the smart choice for liability coverage.
2023 Report on the State of the Legal Marketplace
Here are some key takeaways from the State of the Legal Marketplace Report:
- In 2022, overall legal demand contracted by 0.1 percent, which stood in stark contrast to the 3.7 percent growth rate recorded in 2021.
- The collapse in demand for transactional law services fell most heavily on larger law firms.
- In 2022, law firms continued to add new lawyers at a healthy pace.
- Productivity declined, while direct and overhead expenses remained high.
- Midsize firms saw positive growth in 2022 – the only market segment with rising demand. This was attributed to clients’ desire to cut legal expenses while maintaining high-quality service.
- “In times of uncertainty, organizations have a tendency to hunker down to protect against both real and imagined dangers,” the report noted. “To steer a firm successfully through such periods requires leaders to embrace somewhat different priorities and be willing to experiment with new ways of operating.”
Everyone makes mistakes. When it happens to you, Lawyers Mutual has your back. For nearly half a century, Lawyers Mutual has been the smart choice for professional liability coverage for North Carolina attorneys. We cover the state from Murphy to Manteo. We insure large firms, solo practitioners and everyone in between. We help new lawyers enter the profession with confidence, and we help keep seasoned veterans safe and successful. The numbers speak for themselves. Lawyers Mutual has been in business since 1977, making us the only insurance carrier to provide continuous protection over that period. Today we insure more than 8000 lawyers in North Carolina. Most of them will stick with us until they retire. Why? Because they know we are here for them today and will be here tomorrow, bringing protection and peace of mind in turbulent times. Visit our website, give us a call, or ask a colleague why Lawyers Mutual is the smart choice for liability coverage.
