2012 wasn't such a bad year for law firms after all; survey findings 'a complete surprise'
Law firms that suffered after the economic downturn had a better year in 2012.
A preliminary survey of about 100 mostly large law firms shows better-than-expected results, the Wall Street Journal Law Blog (sub. req.) reports. Law firms had an average 5 percent increase in gross revenues over the prior year, a nearly 6 percent increase in net income, and a 5 percent increase in profits per equity partner.
The survey comes from Wells Fargo Private Bank’s Legal Specialty Group. Jeff Grossman, national managing director for the group, reacted to the results in a Law Blog interview. “This came as a complete surprise,” he said.
Grossman attributed part of the good results to a push to increase collections. Another factor, he told the Law Blog, may have been an effort to post partner profits in 2012 before a greater anticipated tax bite in 2013.
The survey also found that the top-grossing 100 law firms didn’t do as well as firms in the next tier of 100 firms. Average revenue was up 4.5 percent for firms in the top 100, for example, compared to an increase of 6.5 percent for those in the second 100.
Grossman warned that the good results should not lead to complacency. Law firms should not “take their foot off the gas pedal on controlling expenses, or stop focusing on productivity,” he told the Law Blog.