Peer Monitor Index Drops in Q3
After holding steady in Q1 and Q2, the Peer Monitor Economic Index (PMI) fell two points to 52 in the third quarter. Somewhat higher demand was offset by slightly weakening trends nearly across the board in demand, rates, expenses and productivity.
The PMI is produced by Thomson Reuters, and is a composite index of law firm market performance using real-time data drawn from major law firms in the United States and key international markets. A PMI of 65 or greater indicates strong law firm market performance.
Demand for large law firm services rose 0.2 percent during the third quarter – while it was the seventh consecutive quarterly gain, it was the smallest gain seen this year. More worrisome is that rate growth fell to 2.6 percent — the lowest mark in the history of PMI, and evidence of continuing pricing pressure from clients.
Productivity, meanwhile, fell for the eighth consecutive quarter, as firms continue to grow headcount faster than demand warrants.
Transactional practices remained strong while litigation declined again.