The MPF 2018 Leadership Conference: Keynote Presentation – "The State of the Industry"
By Patrick J. Fuller, ALM Intelligence
On occasion, we kick off the MPF Leadership Conference with a keynote presentation to set the stage for the Conference. In 2018, we invited Patrick Fuller to present an overview of the legal industry based on data collected by ALM Intelligence. It’s a tough marketplace out there, full of change and volatility. Here are a few highlights:
- Sluggish Revenue Growth for BigLaw
Since 2008, revenue growth for the AmLaw 200 firms has hovered at a sluggish two percent (2%) per year. Compare that to 2000-2008, when revenue growth for BigLaw averaged more than ten percent (10%) per year.
- Effective Hourly Rate Increases Slowing Down as Well
Since 2008, effective hourly rate increases achieved by the AmLaw 200 firms has also slowed significantly with the ACC Value Challenge, Alternative Service Providers (ASPs) and the Corporate Legal Operations Consortium (CLOC.org) largely responsible.
- BigLaw Experiencing Declines in Financial Performance
In fact, nine out of ten (91%) AmLaw 200 firms report a decline in at least one key performance metric over the last three years, including sixty-one percent (61%) reporting declines in total revenue, eighty-three percent (83%) reporting declines in revenue per lawyer (RPL) and eighty-five percent (85%) reporting declines in profit per lawyer (PPL).
- Corporate Legal Departments Bringing More of its Legal Work In-House
Before the downturn, sixty-nine percent (69%) of the legal spend by the Fortune 500 in-house legal departments was performed by outside counsel. In 2017, that percentage shrunk to sixty-one percent (61%), with the trend projected to continue.
- BigLaw Expanding Aggressively into Major US Markets
AmLaw 200 firms are expanding aggressively into big legal markets like Atlanta, Dallas, Denver, Houston, Miami and Salt Lake City primarily through acquisitions of smaller and mid-size firms. Analysis suggests mixed results. Interestingly, none of the managing partners at this year’s MPF Leadership Conference want their firms to be acquired.
At MPF, we believe that these and other long-term trends present exciting opportunities for well-run smaller and mid-size firms with focused plans and effective leadership.
Click here for the full story.