Do BigLaw firms need to tighten their belts? Business is slowing, surveys say
Following a strong 2014 for many BigLaw firms, demand for their services and revenue growth is increasing at a slower rate this year, a survey says.
At the same time, expenses are growing at a slightly faster rate than last year, says Citi Private Bank’s law firm group in a report published by the Am Law Daily (sub. req.).
The increase in revenue exceeds the increase in expenses among nearly 200 survey participants, which is good, the article notes. However, when all the numbers are crunched, a 3.6 percent increase in revenue for the first nine months of this year represents a slowdown from the 4 percent reported in last year’s survey for the first nine months of 2014.
Meanwhile, an annual Altman Weil survey found that an increasing number of corporate in-house legal departments are planning to reduce spending on outside counsel in the coming year, reports the BigLaw Business page of Bloomberg BNA.
Among the 258 respondents, 40 percent said they plan to cut spending, nearly twice as many as last year. Their main mechanism for doing so is having in-house counsel do work formerly performed by private law firms. However, a significant number also plan to use contract lawyers or vendors to handle such matters.
Altman Weil says corporations also want to have “a strategic voice” in management of work they do send to outside law firms, reports the DealBook page of the New York Times (reg. req.).
Related coverage:
ABAJournal.com: “Law firm partner profits rose in 2014; top 15 law firms had the best showing, Citi report says”
ABAJournal.com: “Latham tops Global 100 with $2.6B in earnings; revenue is up 4.5% overall”
Philadelphia Business Journal: “Survey: Revenue growth at Pa. law firms half the national average”
Pittsburgh Business Journal: “Law firms facing cuts from their biggest corporate clients—and here’s why”
