Aug 05, 2024 | legaltech

Thomson Reuters released a new report today – the Q2 2024 Thomson Reuters Law Firm Financial Index (LFFI), powered by Financial Insights – showing continued strong growth for law firms amid a resurgence in transactional practices and solid fundamentals in the second quarter of 2024. Below are key figures from the report, which showed a healthy outlook for law firms with overall demand up 2.4% compared to Q2 2023.

From an innovation perspective, the growth in lawyer productivity is a top takeaway.

“Law firms’ recovering productivity rates may be an early indicator of the impact AI and generative AI tools are having on their ability to streamline workflows and free up lawyers for more strategic activities,” said Raghu Ramanathan, president, Legal Professionals, Thomson Reuters.

Lawyer productivity growth turned positive – coming in at 0.4% – for the first time since the transactional boom of Q4 2021, when pandemic lockdowns were ending and the U.S. economy was strong. In Q2 2024, 54% of firms had lawyers billing more hours compared to Q2 2023.

Other notable figures from the report

• Growth in overall demand was led by the counter-cyclical practices of litigation – which grew at 3.4% – followed by bankruptcy, up 2.4%, and labor & employment, up 2.2%.
• Demand for transactional practices, which includes general corporate, M&A, real estate and tax practices, returned to growth mode for law firms after almost three years of subpar performance. Transactional fees worked – a proxy for revenue – saw the greatest Q2 resurgence of any cyclical practice group, driven by increased billing rates.
• Worked rate growth was at 6.6%, up from 6.4% in Q1, which saw the fastest Q1 pace of growth since the Great Financial Crisis.

For more insights, read the press release or download a copy of the Q2 2024 LFFI report.