As Confidence Falls, Law Firm Leaders Favor Non-Equity Partnerships
Managing partners at large law firms expect revenue to grow next year because of longer hours and higher billing rates, but their confidence is falling, a new survey says.
A survey by Citi Private Bank says confidence fell all four quarters in 2007, dropping 20 percent overall, the Recorder reports.
The study’s fourth-quarter “Managing Partner Confidence Index” dropped 11 points from the last quarter, indicating “a dramatic fall in confidence in both the economy at large and the legal profession as a whole,” the Wall Street Journal Law Blog reports.
About 60 percent of the 112 law firm leaders who responded to the survey said increased hours and rates will help grow revenues. At the same time, the managing partners expected expenses to grow no more than 5 percent.
The survey summary (PDF posted by Law Blog) says the law firms expect to increase their ranks of non-equity partners “at a faster clip” than those of their equity partners. Most managing partners expected the number of equity partners to grow by less than 3 percent. Eighty percent said they expect to hire more associates next year, and 40 percent expected their associate numbers to increase by 3 percent or more.
“Based on these results it appears that total lawyer growth will outpace that of gross hours; this situation will likely result in flat or reduced productivity growth,” the study summary says.