By Citi Private Bank and Hildebrandt Consulting,
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The law firm industry remains resilient in a channel of modest demand growth, where dispersion and volatility remain high.
We are pleased to share the 2018 Citi Hildebrandt Client Advisory, our annual publication which outlines the current landscape of the law firm industry, how law firms are responding to these conditions and their best opportunities for growth in 2018.
The law firm industry remains in a channel of modest demand growth with high levels of dispersion and volatility1,2:
Looking out to 2018, we project that industry revenue growth and profit per equity partner growth will remain in the mid-single-digit range on average. Behind these average results, we expect to see variability in individual firm performance, which will continue to drive consolidation in the industry.
A strong brand will be critical for firms to capture revenue growth in their established markets, practices, and industries. For some firms, further growth in this environment will come from expansion into new markets, practices, or industries. For many, growth will come from laterals or combinations.
Success in this market will likely come to firms who are most nimble in their response to client demands for a more efficient delivery of legal services. In the long-term, success will likely come to firms who adjust their talent models to market forces and who focus on building a robust growth model that attracts, develops and retains the best legal talent.
Please read the full report here.
Our analyses and projections are based on data collected from a sampling of primarily U.S.-headquartered law firms by Citi Private Bank, as well as conversations with law firm leaders. For third-party providers of legal services, our information is mostly anecdotal. Sources include the “Citi Annual Survey Database” of 193 U.S.-headquartered firms, including 44 Am Law 1-50 firms, 34 Am Law 51-100 firms, 47 Am Law 2nd 100 firms, and 68 additional firms; the “Citi Flash Survey”, including 40 Am Law 1-50 firms, 29 Am Law 51-100 firms, 47 Am Law 2nd 100 firms and 45 additional firms; the “Citi Law Firm Leaders Survey” of 55 large firms headquartered in the U.S., U.K., Australia, China and India; and the “Law Firm Leaders Confidence Index” which reports the forward-looking opinions of law firm leaders from 154 US-Headquartered firms.
Dispersion is defined as a near even split between firms that see demand increase and firms that see demand decline year-to-year. Volatility is defined as reverse demand growth trends from one year to the next.