Summary: The latest quarterly survey by Citi Private Bank shows managing partners have an overall concern on how the economy affects law firms.
A recent Citi Private Bank Law Group’s Managing Partners Survey of 72 law firms showed a decline in confidence for the overall law firm industry by the managing partners. However, the managing partners showed greater confidence in their own firm’s prospects.
The survey showed that the confidence in the economy as a whole for the next six months would continue in current conditions at 56 percent, 38 percent thought the economy would be slightly better. Overall, the index fell 13 points from the last survey.
In the survey from last quarter, the demand confidence index had jumped 17 points, the highest in the last few years, but remained the same this time. The expenses report only had a one-point increase from the last quarterly survey.
The confidence in business conditions dropped seven points, with about 55 percent thinking conditions would remain the same, 38 percent thinking they would be somewhat better, and eight percent thinking they would be somewhat worse. No one thought conditions would be considerably better or worse.
The profit confidence increased four points, with 46 percent expecting a growth of five to ten percent in the next year and 39 percent expecting a growth of less than five percent.
Revenue confidence increased eight points with 40 percent expecting growth of five to ten percent. Eleven percent did not expect an unchanged revenue growth and only one percent expected a loss in revenue.
The survey showed that the expectations that managing partners have for headcount growth in equity partners in the next year to be modest but growth in associate headcount to remain strong. The demand for nonequity full-time lawyers to increase was at 43 percent in the last survey and it remained virtually unchanged in this survey at 44 percent.