By Ali Teske
BridgeTower Media Newswires
Cushman & Wakefield’s Bright Insight Survey revealed record growth for law firms in 2021 with 85% of firm respondents indicating that COVID-19 had a favorable impact on their firm.
A confidential survey administered by the Legal Sector Advisory Group of global real estate services firm Cushman & Wakefield revealed that law firm profitability set new records in 2021. According to the results, “In the U.S., legal sector revenue is estimated at $350 billion, up from $321 billion in 2019, totaling 9% growth, according to Statista and the U.S. Census Bureau.” The top law firm among Am Law 100 firms broke the $6 million revenue mark with 100% of Am Law 100 firms reporting increased revenue.
When asked “How much did your firm’s gross revenue change year-over-year in 2021?” 94% of respondents indicated an increase in revenue, with 3% indicating a decrease and 3% seeing no change.
Of the respondents, 54% self-identified their firm held an Am Law 100, 200 or global ranking with 46% indicating their firm was national, regional or local firm not on one of the ranking lists.
In addition to profitability increases, small to mid-size firms were forced to assess their talent retention strategies as the market remained hot as 79% of firms reported hiring new lawyers from other law firms. The number one factor hiring firms are using to recruit differently over past years is work flexibility to support work/life balance, 49% of respondents reported.
As the pandemic presented obstacles and challenges, 88% of firm respondents indicated that they are more focused on firm strategy than ever before and 80% also noting that COVID-19 provided the firm an opportunity to rethink every aspect of their people and their business.
“The past several years have been marked by disruption, as a global pandemic impacted every aspect of life, business and the economy,” said Sherry Cushman, vice chairman and co-lead of the firm’s Legal Sector Advisory Group, in a statement. “The impact on the legal services sector has accelerated trends that were already very much in evidence, including intensifying competition for talent, increasing investments in technology and flight to quality for office space.”
The real estate group saw a staggering pause in leasing during 2020 with activity resuming in 2021 with Chicago, New York City and Washington, D.C., accounting for 40% of the top 10 legal-sector markets overall law firm leasing activity. The occupancy for law firms decreased 14% on a square-foot basis average in 2021 for new leases and 6% on renewals in all U.S. cities.
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