Our latest infographic shows how the Australian legal market managed to lift its law firm revenue despite a slowdown in demand and utilisation.
In FY 2022, the Australian legal industry rode out a roller coaster of demand growth and contraction, finishing with strong revenue growth. To end its fiscal year so strongly speaks to the solid foundations upon which Australian law firms stand; and entering FY 2023, Australian law firms have reason to be optimistic.
Through a combination of qualitative and quantitative analysis, the Thomson Reuters Institute’s 2022 Australia: State of the Legal Market Report shines a light on the reasons for this optimism. Among these reasons, one stood out: The growth in worked rates gave a record-breaking performance.
Unlike previous years where Australian law firms’ relied on demand growth to be the primary driver of success, this year, firms were driven more by rate growth. A combination of higher-priced partners billing more hours than usual, and more expensive practice areas growing substantially led to this exceptional growth in worked rates. Indeed, this growth even overcame slower demand growth and contracting utilisation, leading to fees worked (a proxy for revenue) flourishing.
To further illustrate this year’s analysis, this infographic highlights how the combination of the aforementioned factors helped propel Australia’s legal industry toward healthy revenue growth.
This article and infographic originally featured on Thomson Reuters Institute and was republished with permission.
