Managing partners at the end of 2014 expressed renewed economic confidence. The mood seems less rosy now, according to the latest survey by the Law Firm Group at Citi Private Bank.
Those who manage their firms had “lower expectations about the level of improvement in the economy and the legal industry,” the survey found.
The partners – from 54 firms of different sizes – expect the demand for legal services to remain strong, though with growth moderating. Twenty percent think growth will exceed 3 percent. More than half, 53 percent, expect any increases to be less than or equal to 3 percent. Another 20 percent of the partners don’t expect any change in demand.
The partners suggest that the discounting pressure, which has become so common, has finally “stabilized.” Fifty-six percent said client pressure to reduce rates remains unchanged, while 44 percent say it’s increasing only modestly.
About one-third expect overall growth of 5 percent to 10 percent; 49 percent of those surveyed expect some growth, but below 5 percent.
Those firms also expect to keep growing – although the survey doesn’t delineate whether revenue growth is expected to result from increased headcounts. The partners foresee more equity partners in their ranks, with slightly lower growth expected for salaried lawyers.
Of the 54 firms participating in the survey, 23 are among the 100 highest-grossing firms; 16 are among the 200 highest grossing firms; 12 are so-called “niche” firms that have particular specialties; and three are U.K.-based.