The Hildebrandt Institute’s Peer Monitor Economic Index (PMI) fell 4 points in the second quarter, to 51. Demand growth was slightly negative and rate growth was also weak. Expense growth, which has been a cause for concern this year, appears to have slowed, but not enough to counter stagnation in demand and rates.
Following recent trends, the drop in demand can be largely attributed to weakness in litigation, corporate and transactional practices. IP litigation, which had previously been a bright spot in litigation, was also weak to slightly down. Labor and employment, however, has stayed on the positive side and is up 4.7% for the second quarter.
Mid-size firms had the strongest relative market performance for the quarter, with demand up 1.9% despite a slight drop in productivity. The Am Law 100 segment, in contrast, saw drops in both demand and productivity. The Am Law 200 segment (firms ranked between 100 and 200 by earnings) saw demand rise slightly (1%), but headcount growth led to declines in productivity similar to that in the Am Law 100.
These results, combined with a stagnating economy, leads Peer Monitor to predict a challenging economic environment for the remainder of 2012. The result could be another drop in hiring levels, as well as possible reductions in non-lawyer staff and overhead spending. The outlook is not dim for all firms, however. Peer Monitor takes a closer look at rising disparity in firm performance in this quarter’s PMI. For that story and the more details on the quarterly results, read the full report here [insert link when ready].
For more information on the PMI and how Peer Monitor can help your firm successfully manage through today’s economy, please contact Mark Medice at 412-203-2155 or firstname.lastname@example.org, or visit the Peer Monitor website.