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 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.
The report notes 88% of firm respondents indicated they are more focused on firm strategy than ever before and 80% noting COVID-19 provided the firm an opportunity to rethink every aspect of their people and their business.
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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