Business of Law

Demand for IP Litigation Drops in Third Quarter; Most Other Practice Areas Also Suffer

Law firm costs rose at a slower pace in the third quarter, but the slowdown wasn’t enough to compensate for weakening demand for legal services.

The findings are from the Hildebrandt Institute’s Peer Monitor Index, which measures the economic health of the BigLaw marketplace. Demand for legal services—defined as the growth or decline in billable hours—fell .8 percent in the third quarter, compared to the same period last year, according to the report (PDF).

Demand dropped in nearly every practice area for the third quarter. Though intellectual property litigation has been a recent strong performer, in the third quarter demand for that practice area declined 3.6 percent, the first drop in nearly two years. The only bright spot was labor and employment, which saw a 2.5 percent growth in demand.

For the year, demand for legal services is basically flat. “For some time, we have been stating that 2012 was poised to be one of the most challenging years in recent memory,” the report says. “So far, we are seeing little cause for altering that outlook.”

A press release quotes Mark Medice, program director of Peer Monitor. “We are seeing an increasing disparity between firms that are able to achieve meaningful gains in demand, rates and profitability compared against firms that are treading water or losing ground in the current environment,” he said.

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