Law Firm Profit Metrics Still High, but Talent War 'Boiling Point' Nears | The American Lawyer - The American Lawyer

What You Need to Know

• A report on law firm profitability found growth in demand, productivity and most practice areas.
• But the report also cautions about the long-term consequences of the war for talent.
• The Thomson Reuters Peer Monitor Index, published this week, calculated a striking amount of turnover, even with a 7.2% increase in direct expenses linked to higher pay for talent.

Law firms are paying more for talent than ever before. But like other industries that’ve been hit by a so-called “Great Resignation,” they’re also hemorrhaging it like never before, and the result is a diminished return on investment that could reach a “boiling point” in the near future, according to the latest Thomson Reuters Peer Monitor Index report.

Direct expenses grew by 7.2% during the third quarter of 2021, driven mainly by increases in associate compensation relative to Q3 last year. But the report, which aggregates multiple factors to produce a score of law firm profitability, also clocked law firm turnover at 13.8% over the last 12 months.

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source: https://www.law.com/americanlawyer/2021/11/08/law-firm-profit-metrics-still-high-but-talent-war-boiling-point-nears/

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