A new survey from Citi Private Bank’s Law Firm Group shows that there has been a slight increase in managing partners’ confidence in the state of the broader economy and the legal industry, according to The Am Law Daily.
Citi released its latest Law Watch Managing Partner Confidence Index on Monday. The group polled 79 law firm leaders, 28 of which were from The Am Law 100, 24 were from Second Hundred firms, 23 were labeled as niche and four were from the United Kingdom.
The survey was done to find out the feeling of the law firm leaders about the legal industry and the United States economy as a whole. A 200-point scale was used to plot the answers, with 100 showing a neutral opinion and 200 showing absolute confidence.
For the first quarter of this year, the leaders of the firms surveyed put their overall confidence level at 115. This is six points higher than the survey that ended 2013. The score for the first-quarter of 2014 was two points higher than the survey conducted in the same quarter last year.
A senior client advisor from the law firm group at Citi, Gretta Rusanow, said, “We measure demand through [lawyers’ total billable hours logged] and, of course, the amount of work that comes the way of the firms is influenced to quite a large degree by what’s going on in the economy and what’s going on generally in the legal market.”
The confidence shown in the economy at large increased by seven points to 123 compared to the final quarter last year. The profit index of the survey increased by five points, to 101. At least some growth in profits is expected over the next year in three out of every four responses. One in four respondents predicted growth ranging from five to 10 percent.
When it comes to firms discounting fees, many firm leaders believe the worst has passed. The confidence rating in this category increased to 81. Of the respondents, 58 percent of them said that they think their discounting efforts will not change this year.
“When you look at [2013 and 2014], it appears to be stabilizing, if not even, slightly, and that’s very heartening to see,” Rusanow said.
The survey also shows that law firms are staying cautious in regards to increasing the ranks of their equity partners. In this survey, just eight percent of respondents said that equity partner ranks would increase more than three percent. Thirty percent of respondents said they predicted less growth.
“If anything, there’s been a swing toward law firms keeping a steady state when it comes to equity partner headcount,” Rusanow says.
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