3rd quarter law firm performance

November 13th, 2012 by Altman Weil

The Citi Private Bank Law Firm Group is out with its latest quarterly update on the legal profession.  Their report is based on data from 182 law firms - 131 in the AmLaw 200 and 51 others. 

“Results from the first nine months of 2012 are in, and it appears increasingly likely that the legal industry will fall short of 2011’s low single-digit profit growth. Not only did third-quarter revenue and demand growth slow from the first half of the year, demand actually posted a slight decline (-0.1 percent) compared to the third quarter of 2011, which marked the beginning of the current prolonged period of soft demand. Although expense growth also slowed during the third quarter of 2012, it continued to outpace revenue growth; in fact, the gap between the two widened, putting a further squeeze on profit margins.”

Other highlights (or lowlights) included:

  • Aside from the decrease in demand, another primary reason for the drop in revenue growth in the third quarter was a slowdown in the collection cycle.
  • Through the first nine months of 2012, larger firms generally underperformed the rest of the industry, and those with the greatest global presence fared the worst.
  • Rate increases continued at about the same pace as last year, but are still running at approximately one-half the level of historical averages.
  • After a 0.3 percent increase in 2011, equity partner head count has edged up at only a slightly greater pace (0.4 percent) through the third quarter of 2012.

Read it at The AmLaw Daily

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