It’s simply remarkable just how much data is circulating in the legal industry about the state of things. Last week we examined five law department surveys in the hunt for insights as we turn the corner into 2015.
These studies all stemmed from the perspective of the corporate legal department, so this week we thought we’d review several reports predicated from law firm leaders. We’d like to believe that examining survey findings from both sides of the table provides balance.
The three surveys presented nearby suggest that that law firms are indeed cautiously optimistic both about the end results in 2014 and the forecast for 2015. Cautious optimism – with an emphasis on caution – may well have become cliché in the last five or six years, perhaps at the expense of overuse, but the data suggesting law firm confidence is fairly consistent.
1. Citi Private Bank Law Firm Group Quarterly Flash
Signs pointed positive in the Citi Private Bank Law Firm Group “Quarterly Flash” report which surveyed 178 law firms from across the top 100, second hundred and boutiques about business results from the first three quarters in 2014. Overall revenue grew 4% in the first nine months of the year, though that number was off slightly from 4.4% reported at the end of the first half, according to the researchers, who published this report in The American Lawyer. They attributed the slower growth to the lengthening of the cash collection cycle. The study also found law firm rates increased a “robust 4.3%” while productivity and headcount inched up. However, the upbeat showing also came with a note of caution that “excess capacity still casts a long shadow over the landscape.” The complete study is only available to clients, according to a bank representative. Additional sources: Law360, Businessweek, WSJ Law Blog and Above the Law.
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2. Wells Fargo The Private Bank Legal Specialty Group
This survey is also conducted quarterly by the Wells Fargo The Private Bank Legal Specialty Group. The most recent survey “shows that 2014 is shaping up as a very good year for many large firms,” according to Bloomberg business of law columnist Ellen Rosen. She reported that revenue “was up almost five percent” over the first three quarters of this year. The American Lawyer observed, “the Wells Fargo survey came to similar conclusions as the third- quarter survey results released last week by the Citi Private Bank’s Law Firm.” Indeed published reports of the survey, which is not available to the public, indicate that demand for service and billable hours all ticked up. Additional sources: Bloomberg, The American Lawyer, and JD Journal.
3. The American Lawyer 12th Annual Law Firm Leaders Survey
This annual survey “gauges the sentiments of Am Law 200 managing partners in an anonymous survey that covers a variety of topics pertaining to their firms and the legal industry,” according to the press release announcing the survey. The overarching finding? A majority of respondents – 78% – are “somewhat optimistic about 2015.” The survey is featured in the December 2014 issue of magazine, which also weighs in more precisely on what “somewhat” means. Shepard Mullin Richter & Hampton Chairman Guy Halgren explained to the magazine, “There are still some long-term trends, such as a supply demand imbalance, that present challenges for the legal industry and temper enthusiasm, even though the economy has continued to improve.” So where’s the upside? According to the article 38% see the biggest opportunity in corporate practice which nests nicely with another survey, where 32% of corporate legal departments said they expect legal budgets to increase in the next 12 months. Additional sources: The American Lawyer Magazine (December print issue)
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We’ve noticed a number of new studies published even more recently, and we intend to dive into those and publish findings here before the year ends. If you see a study or survey that ought to be included, please send us an email, tweet us a link (@Business_of_Law) or leave a comment on this post. We’d also be interested to know if you share the sentiment of cautious optimism.
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