Bloated isn’t a good word in general. At this time of the month it feels uncomfortable, it sounds awful when we talk about dead bodies, and it’s downright terrifying for employees when law firms start talking about headcount.
A survey conducted by Wells Fargo’s Legal Specialty Group found that in the first six months of 2023, the legal workforce grew but productivity fell. Respondents from 130 firms, including 66 Am Law 100 firms, said the number of attorneys increased 3.9 percent but demand fell, resulting in a 4.1 percent drop in productivity have led. For now, however, layoffs and employee layoffs appear limited, and most firms are opting to wait out the drop in demand.
Owen Burman, a senior consultant at Wells Fargo, said of billable hours, “We’ve never seen numbers this low.” The survey found an annual pace of just 1,538 billable hours per attorney. Last year’s survey results showed an average billable hour of 1,688, which was a high. However, this year’s billing liabilities are also below the average of 1,631 in 2019 and 2018.
Overall, the participating companies recorded an increase in sales of 4.4 percent. The decline in demand is due to an increase in billing rates. According to the report, it’s “one of the largest increases in billing rates we’ve seen, 7.7% overall.”
Hopefully, in the interest of employees, this will give companies the buffer they need to weather historically low productivity.
Kathryn Rubino is Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best so please contact them. Feel free to email her with any tips, questions, or comments, and follow her on Twitter @Kathryn1 or mastodon @Kathryn1@mastodon.social.