Yes, it's been a banner year for Big Law.

The Thomson Reuters Q3 2024 Law Firm Financial Index is out and it shows growth and profit across the board.

"The Index score marks seven consecutive quarters of progress for law firms, with this improvement evident across all areas measured by the LFFI [Law Firm Financial Index]," the report details. "Perhaps most notably, productivity continued to rise, with almost two-thirds of firms experiencing growth in Q3 2024. From a demand perspective, most major practice areas experienced growth. Transactional demand continued to rise to its best performance since early 2022; and counter-cyclical practices — such as litigation, real estate, labor & employment, and corporate work — led the way in terms of growth pace. Importantly, transactional demand also returned to growth mode, contributing significantly to overall firm performance."

Both hiring and productivity have bucked decline trends to mark steep growth since the summer, with AI being a notable component to this.

“The continued climb in law firm average productivity – in stark contrast to previous years – is a key factor boosting law firm profitability,” Raghu Ramanathan, Thomson Reuters's president of Legal Professionals, said. “Law firms that not only invest in new technology but also adopt AI and generative AI solutions to streamline workflows and improve the efficiency and quality of their work will be best positioned to improve client satisfaction and experience sustained productivity growth.”

As for the road ahead? It seems clear that 2025 will be marked both domestically and internationally by continued political turbulence. The explosive growth for all segments of the industry has put firms in a healthy place to weather this, of course, and the report concludes that firms are “not looking to experience the overheating and corresponding two-year hangover which beset them after 2021.”

Verdict

Whether or not this moment of growth and expansion is sustainable for Big Law is yet to be seen, but its a nice reprieve from the last few years of doom and gloom.