Demand for Legal Services Is on the Rise

Growth in some California markets outstripped national trends in the legal industry, according to Hildebrandt's Peer Monitor Economic Index (PMI) for the third quarter of 2009.

Demand for legal services in the first nine months of last year was flat in several major metropolitan areas, including New York City, San Francisco, and Washington, D.C. But in comparing the third quarter alone to the same period of 2008, the Los Angeles, San Francisco, and Silicon Valley markets all had growth rates above the national average. At most firms, Hildebrandt says, staffing and other cost reductions contributed to profitability.

Though Hildebrandt's overall PMI rating (which is based on legal-industry demand, productivity, rates, direct expenses, and overhead expenses) continued rising in the third quarter, at 46 it remained considerably lower than the third-quarter level of 65 in 2007.

Nationally, bankruptcy was the strongest practice area, with demand increasing by 18 percent in the first three quarters of 2009. On the other hand, legal work on capital markets was down 14 percent, followed by drops in real estate (13 percent), corporate law (9 percent), and mergers and acquisitions (8 percent).

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