Summary: A new survey from the Legal Specialty Group at Wells Fargo Private Bank has found that law firms experienced an increase in revenue in the first nine months.
Wells Fargo Private Bank’s Legal Specialty Group has released new data that shows a possible strengthening in legal industry revenues and demand, according to The Am Law Daily.
The data is for the first nine months of 2014 compared to the same time period in 2013.
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The bank surveyed 135 law firms and discovered that gross revenue increased by five percent for the first nine months of 2014 compared to the same time in 2013.
The report stated that the results for the complete fiscal year 2014 are expected to be “very good.”
“On an interim basis, this is the best period of time that we have seen in a long time,” says Jeff Grossman, Wells Fargo’s senior director of banking, legal specialty group. “It is two-fold: The actual metrics generally are improved, not just rates but total hours per lawyer. And with the mix shifting from litigation to corporate transactional practice, you see better rate structures with less discounting, which has been healthy for the industry.”
The survey also discovered that litigation practices have endured slowing demand over the past 18 months. Other practice areas, such as corporate and real estate, have seen five percent growth in the past nine months.
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Billing rates exhibited healthy growth with rates increasing some four percent. Hours per lawyer also saw an increase, hitting the mid-1,600 hours range.
The survey also found that law firms have reigned in their spending, with expenses increased at less than half of the rate of revenue. Expenses and revenue were increasing at a rate of 2.5 percent at the same time last year.
Grossman said, that the legal industry “is generally improving across the board and it is doing a reasonable job of controlling expenses and continues to be risk averse and continues to raise capital. But we are still notably below the peak and it will be another one or two years before we would get back to that peak in terms of demand.”
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