The legal industry has been cruising along a bit better than expected this year boosted by an uptick in billing rates and the performance of some countercyclical practices. But as my colleague Andrew Maloney reports, a new survey of law firm leaders by the consultants at Withum Smith+Brown shows that some firms and their clients are “less bullish” headed into 2024 than they were coming into this year. Here’s Andrew’s summary of the survey released last month:

A little over half (57%) of managing partners and C-suite leaders in U.S. law firms, from the Am Law 100 and beyond, said they expect a moderate increase in revenue per lawyer over the next 12 months, according to the Withum report, published in November. A similar percentage (58%) said they expect a moderate increase in profits per partner.

Those numbers are noticeably down from last year, when the survey found 82% and 75%, respectively, expected moderate increases. The report also found that more than 48% expected overhead to continue to rise over the next 12 months, compared with 27% the previous year. The report concluded that firm leaders “remain cautious,” and one analyst said in an interview while firm leaders he’s spoken with are not exactly pessimistic, “there was not a rosy outlook” either.

Bill Sansone, a practice leader at Withum, told Andrew that even though last year was off from the boom times of late 2020 and 2021, firms still had deal work in the pipeline. “Now, that pipeline is not there, and because of interest rates going up, the economy being the way it is, their clients don’t have as much cash to make deals,” Sansone told Andrew. “So, the pipeline has slowed down, and all of a sudden—interest rates were 3.5% to 4.5%, now they’re 7.5% to 8%.”