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Citi Private Bank Law Firm Survey Finds More Signs Point Positive

Citi Legal Survey Finds More Signs Point Positive

The growing confidence observed across the US legal industry, including optimism from corporate counsel, at year’s end seems to be continuing. That’s according to the latest Quarterly Flash issued by Citi Private Bank which examined the full year for 2014.

According to an executive summary we were sent by email: Law firm revenue grew, profits widened, productivity increased and demand for legal services rose.  The survey gathered responses from 149 law firms, including 125 firms spread across the Am Law 100 and Am Law 200 – and also 54 outside those rankings.

“Firms across the board are doing better,” said John Wilmouth, a senior client advisor with the bank, as reported by Ashby Jones in the Wall Street Journal’s Law Blog. “Last year was mostly a good one.”

This was especially true for the largest global law firms, according to the Citi Private Bank report. The WSJ Law Blog – Better Times for Law Firms, With More on the Horizon, Says Report – assessed that finding this way:

 According to Mr. Wilmouth, the biggest of the big — the so-called AmLaw 50 — had the best year. In 2014, the profits-per-equity-partner for these firms were up 7.2% over the 2013 numbers. The figure had risen 5.6% from 2012-2013.

The rest of the industry seemed to “narrow the gap” a bit, according to Mr. Wilmouth. The second 50 largest firms experienced a 3.6% growth in profits-per-equity-partner, as compared to 2.3% in 2013. And the second 100 firms had “PEP” growth of 4.1%, as compared to a 1.4% dip in 2013.

Firms with strong transactional practices tended to outpace the rest, according to Mr. Wilmouth. “It was a very strong year for M&A,” he said.

Industry leaders at the recent annual Blogger’s Breakfast hosted at the LegalTech conference earlier this month in New York also noted the market is improving, but cautioned, “it won’t return to pre-2008 levels. As an industry, the legal community needs to do a better job of embracing technology or face the risk of substitutes and new entrants.” 

Additional sources:

Photo credit: Flickr, Marijn de Vries Hoogerwerff (CC BY-SA 2.0) [image cropped for size]

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About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.

Well that's really a positive news all the way, hope this momentum keeps going. Where many profits & productivity will surround the market in coming days.

James Bliwas
James Bliwas

A new Citi Bank survey of the AmLaw200 reports that profits, productivity and demand for legal services rose a bit last year.

While interesting, it’s only part of the story. As I wrote the other day (link below), a Georgetown Center for the Study of the Legal Profession study reports that while demand for legal services has recovered since the bottom of the recession in 2009, it remains “relatively flat.” Indeed, it reaches the very pointed conclusion that annual “… partner’s hours have consistently remained between 100 and 200 hours per lawyer lower than in 2007.”

Even at only, say, $400 per hour – low for a partner in a corporate firm of any size – that represents a revenue loss of $80,000 a year; multiply it by the eight years since 2007 and it totals $640,000 per partner. This is one reason why large firms saw profits grow by some 5.1%, while Am Law’s Second 100 firms saw improvement of only 3.4% and midsized firms experienced a decline of 0.4%. As is the case in society as a whole, the “one percenters” among law firms are doing quite nicely while everyone else’s share of the pie is shrinking.


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@James Bliwas Hi James,  the important part about data is to consider the aggregate and long view.  Overall the themes among the many survey and data sources present a fairly consistent narrative.  

If someone from Georgetown wanted to check out the trends reports we publish -- based on $17 billion in legal invoices processed -- we'd be open to a conversation.  We are of course, quite aware of the data source in the Georgetown study.   

Here's the latest study: http://www.lexisnexis.com/counsellink/trends-report/counsellink-trends-report-infographic.html

Thanks for stopping by!