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WHAT WE’RE WATCHING

OUTRAGEOUS DEMAND - According to the Thomson Reuters Peer Monitor Index, law firm demand increased in Q2 even relative to pre-pandemic levels, while expenses have continued to fall. Demand for services increased by 0.6% relative to Q2 of 2019, while overhead expenses were down 3.6%, noted the report, which was released Monday. Meanwhile, compared to Q2 of 2020, the report found 7.3% increases in both demand and productivity, as well as a 3.4% increase in rates and a 3.8% increase in direct expenses. But it wouldn’t be 2021 if the good news wasn’t immediately followed by a grave warning, right? Bill Josten, a senior legal industry analyst for Thomson Reuters, told Law.com’s Andrew Maloney that firms should not “take this as an all-is-well moment” but instead view it as “a chance to seize on some short-term success.” Last year, as you might recall, was a weird one. “As we start to move toward more normal baselines, as we get through Q3 and Q4 this year, and start to compare to the results of Q1 of 2021, we’ll see those numbers really shift a lot,” Josten said. “So, let’s not get used to the idea we’ll see a 7.3% increase in demand. That’s likely a product of a really low baseline.”