Written by: Andrew Maloney

Many firms will see a decline in profitability by year’s end, as they head into a 2023 with a “high” likelihood of recession and a higher cost structure due to inflation, a new report concludes.

Confronting those challenges, some law firms may take a number of measures within the upcoming months to increase efficiencies and maximize profits, including adjusting leverage, investing in highly-skilled staff such as pricing specialists, reducing office space, outsourcing more and targeting strategic growth instead of opportunistic growth, said analysts at Citi’s Global Wealth at Work Law Firm Group and Hildebrandt Consulting in the report.

Additionally, hiring may shift, as the market will likely favor firms with a tilt toward practices such as litigation or bankruptcy and restructuring, according to the group’s 2023 Client Advisory, published Wednesday.

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