Citi Private Bank

Browser Requirement

To best view Citi Private Bank's site and for a better overall experience, please update your browser to a newer version using the links below.

System Outage
Citi Private Bank logo

Language Notification

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

2020-Citi-Hildebrandt-Client-Advisory

Perspectives

2020 Citi Hildebrandt Client Advisory

Author

By Citi Private Bank, and Hildebrandt Consulting

December 11, 2019Posted InLaw Firm Group and Citi

We are pleased to share the 2020 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 2020. 

2019 has been a good year for the law firm industry1. While full growth results are unlikely to match the strong average industry performance we saw in 2018, we have seen top-line growth similar to other post-recession years. Rate increases were the major driver of revenue growth, while demand growth was modest, and the collection cycle continued to lengthen. 

Behind the averages, we saw different segments of the legal sector performing well. We also saw more dispersion2 than we saw in 2018 - a typical feature of the post-recession era. Meanwhile, expense pressure eased as 2019 progressed, as firms absorbed the full impact of mid-2018 associate salary increases.

Looking forward, we know that many firms are concerned about the risk of recession and the underlying macroeconomic and geopolitical volatility. However, we do not anticipate a recession in 2020. That said, we believe it is now prudent for law firms to prepare for less certain times ahead. We also note that firms are facing many talent-related challenges: retention at all levels, the rising cost of talent, and how best to plan for the departure of rainmakers and senior partners.

There are many positive trends in the industry. Across most revenue segments, firms are poised to grow, and are placing even greater emphasis on innovation, efficiency and practice profitability. They are also investing more in business development and artificial intelligence. While alternative fee arrangements remain a small part of revenue for many firms, this billing option is becoming profitable for a growing number of firms.

Firms are also making changes to their leverage models. Leverage is expected to increase, with the workforce becoming broader, more flexible, lower cost and more profitable. Firms are also expected to expand their equity partnerships, aided by lateral growth strategies that are becoming more successful than we have ever seen before. 

We project that 2020 top-line growth for the industry will be in the range of between 5 to 6 percent, with profit per equity partner growth in the mid-single-digit range. We also anticipate continued dispersion and volatility, leading to further consolidation. 

Please read the full report here

1Our analyses and projections are based on data collected from a sampling of primarily US-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 228 US and UK-headquartered firms, including 43 Am Law 1-50 firms, 40 Am Law 51-100 firms, 57 Am Law Second Hundred firms, and 88 additional firms; 166 firms from the "Citi Flash Survey", including 37 Am Law 1-50 firms, 30 Am Law 51-100 firms, 49 Am Law Second Hundred firms and 50 additional firms; the "Citi Law Firm Leaders Survey" of 53 large firms headquartered in the US, UK Australia, China and India; and the "Law Firms Leaders Confidence Index" which reports the forward-looking opinions of law firmleaders from 157 firms. 

2Dispersion 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.