2015 has seen a slower start for the larger law firms, according to Citi Private Bank Law Firm Group’s recent survey.
The survey showed that revenue growth was modest and demand was essentially flat in the first quarter, compared with the same period last year.
Gretta Rusanow, senior client adviser at Citi Private Bank’s Law Firm Group, said 2014 was the strongest year the legal industry has seen in the post-recession period and firms are concerned whether those performance levels are repeatable in 2015.
The Citi survey was across 72 law firms, including 46 firms in the AmLaw 200, four firms from the U.K, and 22 so-called niche firms, participated in the survey, which asked firm leaders to rank their confidence on a variety of issues.
Compared to the previous quarter, firm leaders were more confident that their own firms’ revenues would grow, but less confident that the market for legal services would grow, Bloomberg BNA reported.
“One interpretation of the difference in their expectations about their own firms’ performance vs. the broader market may be that they expect to see their own growth come at the expense of others,” said Gretta Rusanow, a senior client advisor at Citi.
The survey uses a 200-point scale: Any score below 100 indicates a lack of confidence on that issue, 100 is neutral and any score above 100 means confident. Overall confidence was 114, down 4 from the previous quarter.
Survey participants were most “confident” that the demand for legal services from their own firms is growing, with 77 percent projecting an increase.
The only issue on which managing partners did not express confidence was that the pressure to discount fees would disappear. Overall, more than half of those surveyed said they expect no change on this front, and 47 percent said they expect a modest increase on the pressure to discount fees. One percent said they expect a substantial increase in the pressure to discount fees.
“Absolutely zero people said they expect discounting to decrease,” said Bruce MacEwen, president of the legal consulting firm Adam Smith, Esq.
Sixty-six percent of survey participants said expenses are growing, but only 44 percent said revenue is growing.
Source: Bloomberg BNA
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