Pennsylvania law firms registered an average drop of 2% in their gross revenue for the first three quarters of 2010 according to a recent report of Wells Fargo Wealth Management’s Legal Specialty Group. The report, which was based on 12 Pennsylvania firms included in the survey, also revealed that national firms made an average increase of 1% in revenue. Most markets were either up or down by 1% or about flat. In 2009, Pennsylvania law firms registered a strong financial performance compared to their national counterparts, but 2010 was not a good year for the state.
Pennsylvania firms have net income or overall profits up about 3% compared to between 12 and 15% increase in other markets. Jeffrey Grossman, the legal specialty group’s managing director, said that the reason other firms are doing better is because they’ve had more expense cuts (credit gary). “Again, they didn’t have as much of a downturn and didn’t have to cut headcount as much resulting in a net increase. And the bulk of those cuts in other markets were on the headcount side,” he added.
A law firm analyst speculated that if the trend would not change, job cuts may still be on the horizon for the law firms in the region. Grossman backed up this prediction as to Pennsylvania’s performance. “Even though they’ve made headcount reductions, it’s not enough. So, I suspect next year to sustain profitability, there will have to be more headcount reductions taken.”