Demand for legal services have declined sharply recently, and some Pennsylvania firm leaders said transactional practices are suffering as corporate clients become more selective in their work with outside law firms.

Thomson Reuters' Peer Monitor indicate that the second quarter of 2016 showed a 0.9 percent drop in demand across practices from the quarter before. It was the first decrease in demand since 2013.

Am Law 100 firms, which saw demand fall 1 percent, fared a bit better than the second hundred, which saw a drop of 1.8 percent for the quarter and 1 percent year over year, the Peer Monitor report found.

Ballard Spahr chairman Mark Stewart said his firm's demand was in line with the drop nationwide. He said it was drastic in some pockets, particularly in transactional work, and predicted that next quarter will be rough too.

"All of a sudden, it's not there anymore," Stewart said. "I really don't see real light until next year." Stewart said clients have likely been affected by the political and economic climate. The tone of the presidential election may be discouraging companies from making big moves, he said, and the ultimate global effects of Brexit are still unknown.

"As the impact of Brexit becomes more clear and the direction of the country becomes more clear we'll see a turnaround," Stewart said.

The drop in demand came in the same quarter that firms had begun talking publicly about increasing associate salaries. The first firm to make headlines in that regard was Cravath, Swaine & Moore, which announced in early June that it was raising first-year salaries to $180,000. A number of firms in the United States followed.

Related Areas