Summary: The annual client advisory survey for 2015 has been released by Citi Private Bank and Hildebrandt Consulting LLC.
The law firm industry in the United States should see another year of profit growth in 2015, according to The Wall Street Journal.
The profit growth will occur due to an increase in transactional work despite dropping demand for traditional litigation.
The data was released in a new report on the legal industry by Citi Private Bank and Hildebrandt Consulting LLC.
The annual survey done by Citi Private Bank consists of 205 firms that are headquartered in the United States.
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The report, which was released on Friday, had a handful of key takeaways. They include the outlook for 2015 as a whole, litigation versus corporate, strong lateral moves and stronger interest in artificial intelligence.
According to the report, “We expect that the industry profit growth will be in the range of 5% in 2015.”
The report expects 2015 gains to closely match 2014 gains, but the projections are based on expectation for “stronger growth in worldwide transactional activity.” They do come with some caveats, one of which is the impact of oil prices.
The report also took a look at the leaders of the legal industry against the firms that lagged behind. The top 10 most profitable law firms in the Citi Annual Survey outperformed the rest of the legal industry for the first nine months of 2014. This followed similar numbers in 2013.
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According to the report, the firms that saw an increase in legal demand fell into two categories. Those two categories are brand-name transactional practices and quality work for the right price.
The report then took a look at litigation versus corporate law in the survey. In the midst of transactions, there is “continued pressure on firms who rely more heavily on litigation,” the report states. “While litigation traditionally drove firm revenue in downward economic cycles, over the past few years, with some exceptions, like intellectual property prosecution or investigations, it has either been flat or declining.”
In terms of artificial intelligence, law firms have expressed more interest in the tools that could eventually replace core skills lawyers have. The report state the following:
“We believe that these tools are still a long way off as a scalable technology in law. We’ve seen that the experience of using artificial intelligence tools in the medical profession has helped medical teams to diagnose complicated illnesses, but it certainly has not replaced doctors.”
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Citi Private Bank’s survey also found that law firms will expect another strong year for lateral moves.
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