Law firm revenue takes nosedive during COVID-19, new survey data shows
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Roughly 81% of law firms have seen their revenues drop during the COVID-19 pandemic, with 27% of firms in that category reporting they have seen business decline by more than half, according to a new survey by Martindale-Avvo.
The dramatic economic impact of the novel coronavirus on the legal industry has come even as 95% of firms report accepting new clients, Martindale-Avvo’s survey of more than 200 legal professionals found.
“COVID disrupted everybody, including the legal profession,” says Diana Schulz, president of Martindale-Avvo. “We are all in uncharted waters here.”
The company is the latest to publicize data indicating the economic shock of COVID-19 has led to a significant business slowdown in the legal industry. Cloud-based company Clio recently reported that the pandemic had resulted in a 40% drop in the number of new legal matters being opened each week in the U.S. in compared with the number in late February.
This economic downturn has also led firms to lay off and furlough staff, with Martindale-Avvo reporting that nearly 20% of firms have been forced to shrink their staffs.
Meanwhile, the attorneys the company surveyed indicated they think it will be a while before their firms get back on more solid financial footing. More than 60% said they believe it will take from four months to a year for their firms to revert back to their financial positions before COVID-19.
Schulz, however, says there are some reasons to think law firms may rebound a little faster than anticipated.
“The one thing about the legal system is, a lot of these matters can’t wait too long, so I do think the legal industry will recover faster than some other industries,” she says.