Count on the leaders of America’s biggest law firms to lead the pep rally. The heads of Am Law 200 firms have been bullish about the year ahead since we began surveying them annually in 2003.
This time, they are even more so: Ninety-one percent of respondents say they are optimistic about their firms’ future. It’s the first time more than 90 percent of those surveyed gave that response. Firm leaders also say they expect growth in most of the leading indicators — firm revenues, profits per partner, billing rates and head count.
Enthusiasm about the economy as a whole was a little more muted. The largest group of respondents — about 77 percent — predict that the U.S. economy will grow only slightly in 2007, and 71 percent say they expect deal flow to increase only moderately.
In fact, in interviews, firm leaders expressed an undercurrent of doubt about how long the good times will last. “I’m bullish, but I’m also worried,” admits one. Another says that the economy must be good because “most experts are positive,” but he hedges his bets by adding that his firm is “also strong in restructuring, [so] we’ll be fine” in a recession. A third passes the buck: “I’ll let you call the guy at 1600 Pennsylvania Avenue.”
We conducted the Leaders Survey in October, asking the heads of Am Law 200 firms to complete a confidential online questionnaire. This year we received 143 responses. Some highlights from the survey:
• Profits per partner will continue to rise. Sixty-six percent of respondents predicted that profits will grow by more than 5 percent; 31 percent say they will increase 5 percent or less; and the remaining 3 percent say they will be flat.
• Billing rates will increase. Fifty-three percent say rates will rise by more than 5 percent; 46 percent say they will increase by 5 percent or less. Only 2 percent say they’ll keep rates steady.