Citi Private Bank recently surveyed its customers, which include many of the largest law firms in the country and its results were similar to those of Hildebrandt and Wells Fargo (which are the subjects of our previous two blog posts).
Both demand and revenue are up slightly, but so are expenses. Headcount remained flat, which suggests lawyers are working a bit harder.
Citi’s report states:
[T]he economy appears to be in for a protracted period of slow growth or no growth, given the systemic issues it is facing. . . . It’s hard to see any way that this environment is good for law firms in the short term. There’s a good chance that M&A, private equity, and IPO work will slow as companies and investors seek some clarity before doing deals, and a spike in litigation seems unlikely.
Since the pie is not getting any bigger, one of the only ways for firms to grow is by cutting into their competitors’ slices. Accordingly, Citi predicts, “top-performing firms will seek to leverage their market advantage to buy talent for their weaker practice areas” just as “rainmakers at underperforming firms” are exploring the job market for other opportunities.