Large law firms had a spectacular year in demand and profits last year. But firms will likely face more headwinds this year, as inflation and pay increases challenge the “best of all worlds” environment that Big Law benefited from last year, according to a new Wells Fargo report.

Law firms still have been somewhat slow to match Milbank’s associate salary increase from earlier this year. But Joe Mendola, senior director of sales for Wells Fargo Private Bank Legal Specialty Group, said he thinks most of the firms within the Am Law 50 will come around, and that the full impact of last year’s salary increases will really be felt this year.