July 27 (Reuters) - Law firms saw an increased demand in
labor and employment work during the second quarter of 2012, one
of the only practice areas that has been consistently strong
amid a tough market, according to data complied by Peer Monitor.
The uptick in labor and employment, which increased in
demand by 4.2 percent, came at a time when legal services as a
whole saw a 0.2 percent drop in demand, according to the
Hildebrandt Institute's Peer Monitor Index issued Friday.
The index, which measures law firm profitability on a
quarter-by-quarter basis, is determined by a number of
variables, including billing rates, expenses, productivity and
The Hildebrandt Institute is a division of Thomson Reuters.
The report found that litigation work was flat in the second
quarter, while demand for corporate work fell 2.1 percent. Real
estate and bankruptcy work also took a hit, with demand dropping
by 3 percent.
In terms of geography, Los Angeles proved to be the hottest
market, showing an uptick of 5 percent in legal work, while
Silicon Valley trailed with an increase of 2 percent in demand.
The demand for work in New York and Chicago were both down by 1
percent and Washington declined 2 percent.
As a whole, the report said that law firms' productivity
fell 2.5 percent in the second quarter and that there was not
sufficient work for lawyers at firms. The number of attorneys on
staff increased 2.3 percent, the report said.
Mark Medice, program director of Peer Monitor, said he was
concerned that law firms are not doing enough to manage their
expenses and cited a rise in direct and overhead expenses in the
"I'd say for 2012 it's going to remain a challenging year,"
said Medice. "Law firms have seen expenses growing but top line
revenue remained fairly flat."
(Reporting By Casey Sullivan)
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