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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIf there’s optimism among law firm managing partners, it’s muted at best.
According to the Citi Private Bank law firm group’s quarterly look at managing partners, while confidence levels “remained above neutral in the third quarter of 2015,” they continued to slip for the third consecutive quarter.
Of the 68 partners surveyed, 64 percent said they expect the economy to remain the same, while 17 percent expect it to be “somewhat better” and 16 percent anticipate conditions to be “somewhat worse.”
Perceptions in the legal market aligned with those of the general economy. When asked about business conditions in the legal industry, 69 percent expressed confidence, unchanged from the second quarter. Of those surveyed, 18 percent said conditions were somewhat better, while only 12 percent thought conditions had worsened. Sixty-nine percent thought demand would be either unchanged or increase no more than 3 percent.
Will those levels translate into profit? Of those participating in the survey, 81 percent expect some growth up to 10 percent; 13 percent expect profit to be unchanged. Although the survey doesn’t correlate the two, perhaps the expectation of some profit growth comes from the view that there would be “some relief in the pace of increasing discounting pressure.”
Expense growth is expected to slow, although more headcount is expected. Firms anticipate hiring more associates, but with moderation expected for hiring in equity partners and other lawyers.
Ultimately, there seems to be a bit of a disconnect in the numbers. At the micro level, managing partners “are more optimistic about the pace of revenue and profit growth at their own firms” than in general, the survey found. Time will tell.
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