Transactional Practices are New Growth Centers for Law Firms, Says Peer Monitor Report
EAGAN, Minn. – Transactional practices are becoming increasingly important sources of growth for large law firms, helping to offset a persistent weakness in litigation. Those are among the findings of a new report from Thomson Reuters Peer Monitor.
Peer Monitor tracks and analyzes law firm market performance using real-time data drawn from major law firms in the United States and key international markets.
The new report, Rise of the Transactionals, discusses how law firm corporate, M&A, tax and real estate work has consistently outperformed litigation practices for the past two years. For example, while billable hours for transactional practices have grown in seven of the eight most recent quarters, litigation practices have declined for eleven consecutive quarters and have not been positive since Q1 2012.
In addition, transactional practices have grown share and now make up 32% of billings, compared with 36% for litigation. Transactional practices are also showing stronger collected rate growth than other practices.
“A clear shift is taking place in the mix of law firm services that clients are pursuing,” said Mike Abbott, vice president, Client Management and Global Thought Leadership, Thomson Reuters. “Clients are increasingly seeking effective counsel for transactional work, especially corporate and M&A work. While litigation remains the largest – and for many firms, their most important – practice, law firms are facing headwinds, including pricing pressure, clients’ desire to better manage litigation expenses, and increasing use of in-house litigation counsel or alternative service providers. Firms that can effectively manage through this new market dynamic may find themselves better positioned for continued growth and success. ”
A copy of the report, Rise of the Transactionals; How Transactional Practices are Increasingly Assuming Leadership for Law Firm Growth, can be downloaded here. For more information about Peer Monitor, visit http://peermonitor.thomsonreuters.com.