Citibank – Law firm revenues will be flat, at best, this year, or may even experience a ‘lower single-digit’ drop as a result of the coronavirus pandemic, according to legal sector financial consultants Citi Private Bank.
Meanwhile, it is also anticipated that law firm layoffs are imminent as demand for some types of legal advice declines and clients take more time to pay bills.
Law firms’ corporate and litigation practices are expected to be the hardest hit with M&A deals being put on hold and litigators having to deal with court closures and delays to trials.
In an interview with Reuters, Mehrnaz Vahid, the head of Citi Private Bank’s law firm group said that, before the coronavirus crisis, law firms had expected “low single digit” increases in revenue, but now billing was expected to be “absolutely flat” or “lower single digit down” for the year.
Vahid added that firms “all expect collections to slow down, period”.
Meanwhile, some corporate lawyers have been redeployed to restructuring and bankruptcy teams as these are practice areas that could experience a dramatic increase in workflow.
However, Vahid also said that lay-offs were being considered by law firms, though it was unlikely that such plans would be put into action until six months from now when firms had the full picture of the financial impact of the coronavirus.
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