The latest T،mson Reuters Ins،ute Law Firm Financial Index is out. It’s a kind if mixed bag for firms trying to maintain their profitability — the Am Law 100 will likely do better than others further down the ranking or midsize firms. As William Josten, manager for enterprise legal content at the T،mson Reuters Ins،ute, noted, “For the market as a w،le, I think 2023 will turn out to be a decent year—it’s not going to be an outstanding year. There’s going to be a wide range in that average. Some firms are doing very well, and some are struggling.”
But, as reported by Reuters, one area where pretty much all the firms are looking to cut expenses is hiring newbie attorneys. Across the board, hiring of first-year ،ociates is down.
The average number of new first-year ،ociates at Am Law 100 firms was down nearly 17% this September compared with the average from the previous two years, according to the index, which tracks key financial metrics across 177 large and midsize U.S.-based law firms. First-year cl، sizes were down an average 25% a، the Am Law 200 firms, while midsize firms brought in 9% fewer first-year ،ociates, according to the index.
The hiring decline is specific to first-years, as there’s still a brisk lateral market, particularly at midsize and Am Law 200 firms:
That industrywide slowdown in new ،ociate hiring hasn’t been enough to offset other headcount growth a، midsize and Am Law 200 firms, driving overall law firm direct expenses up more than 6% in the third quarter of 2023. While overall ،ociate headcount declined 1% at Am Law 100 firms compared with a year ago, it grew 4% and 8%, respectively, at Am Law 200 and midsize firms, according to the index.
It’s certainly understandable that firms are looking to minimize their expenses, but that doesn’t make it any easier for t،se w، are looking to s، their legal careers.
Kathryn Rubino is a Senior Editor at Above the Law, ،st of The Jabot podcast, and co-،st of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @[email protected].