Despite the uncertainty of the market in 2024, most Big Law firms are predicted to report steady growth. This is largely dependent on the performance of four crucial practices areas, each with its own set of challenges and opportunities.
Having reported their worst performance over the last decade according to data from the first nine months of 2023 by Bloomberg Law, Mergers and Acquisitions (M&A) and Capital Markets hold some promise for 2024. Much hinges on whether they can bounce back from the downturn endured in 2023, with managing partners having miscalculated a recovery in the second half of that year. Many, however, remain hopeful for a rebound.
As per the views of Gretta Rusanow, Managing Director and Head of Advisory Services at Citi Private Bank Law Firm Group, a recovery in transactional work is practically inevitable. Scott Miller, Co-Chair of Sullivan & Cromwell, is cautiously optimistic as he foresees a stabilization of interest rates this year, which can potentially inspire more activity, particularly within the technology and asset management sectors.
Those in the legal field specializing in antitrust issues are likely to see a busy year if the corporate transactions gain momentum. The Biden Administration’s aggressive regulatory approach and the possibility of a rule change requiring more detailed merger-related information could keep these practitioners engaged.
Litigation, comprising almost half of Big Law capacity, saw a 2% increase in demand in 2023. The resurgence of cases following Covid-related court closures is expected to keep this segment strong for some time. Excessive fee lawsuits, in particular, could be on the rise in 2024.
While the restructuring practice sector filled the void left by M&A’s downturn last year, it is predicted to remain robust in 2024 with an expected 22% rise in US insolvencies. Predictions suggest a combination of tighter credit conditions and potential economic downturn may be responsible for this increase.
The convergence of these factors could turn 2024 into a stable year for Big Law firms. Even though transactional practices don’t generally recover in tandem with an increase in bankruptcy filings, 2024 could possibly prove an exception.
Despite the fluctuating market conditions, Brad Hildebrandt, chairman of Hildebrandt Consulting, suggests that there is no significant concern among law firm leaders. He believes in a more “normal” growth cycle for 2024, contributing to the overall performance of Big Law firms.