By some financial measures, 2018 was best year for law firms in a decade
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Law firms prospered in 2018 as a result of higher demand, billing rates and productivity, according to studies released this week by Thomson Reuters and Citi Private Bank’s law firm group.
Growth in net income and profits per equity partner were the strongest in a decade for law firms, according to an American Lawyer article written by Citi Private Bank officials.
Net income grew by 6.9 percent and profits per equity partner were up 7.5 percent, according to Citi Private Bank. Billing rate growth of 4.3 percent and demand growth of 2.3 percent were the main drivers of revenue growth. Productivity grew by 1 percent.
Citi Private Bank also reported that a greater proportion of law firms saw growth last year. Sixty-one percent of firms had an increase in demand, and 74 percent had an increase in profits per equity partner, compared to 56 percent and 68 percent in 2017.
The Citi Private Bank results are based on a sample of 191 law firms, including 129 of the nation’s top 200 law firms.
Thomson Reuters also reported positive results for law firms in its Peer Monitor Index, although its numbers weren’t as rosy as Citi Private Bank’s. “Demand, rate growth and productivity were higher in 2018 with unquestionably improved performance across all three market segments,” according to the report.
According to Peer Monitor figures for the year, demand rose 1 percent in 2018, worked rates rose 3.2 percent and productivity grew 0.2 percent.