2022 has been increasingly challenging for the law firm industry as this year has progressed. Following the aberrationally strong performance seen in 2021, law firms have had to navigate through a series of geopolitical and macroeconomic issues, illustrated in the deepening decline in demand through the course of the year. This demand decline together with a longer collection cycle translated into modest revenue growth for the first nine months of 2022. And while there was some moderation in expense growth, it was not enough to reverse the margin pressure we have seen throughout this year.
These results are based on a sample of 195 firms (83 Am Law 100 firms, 51 Second Hundred firms and 61 niche/boutique firms). Forty-four of these firms fit our definition of either international (less than 25% but more than 10% of lawyers based outside the United States) or global (at least 25% of lawyers based outside the United States). Citi Global Wealth at Work’s Law Firm Group provides financial services to more than 900 law firms around the world and approximately 50,000 lawyers. Each quarter, the Law Firm Group confidentially surveys firms in the Am Law 100 and the Second Hundred, along with smaller firms. In addition, we conduct a more detailed annual survey and produce the Law Firm Leaders Confidence Index semiannually. These reports, together with extensive discussions with law firm leaders, provide a comprehensive overview of financial trends in the industry as well as forward-looking insight.