Summary: The overall trend for the financial performance of 177 law firms is positive, although they still aren’t quite to the same levels as last year at this time.
While things are looking better for law firms, they still aren’t up to the results in the first half of 2014. Citi Private Bank’s Law Firm Group financial performance report for the first half of 2015 has been released.
The start of 2015 was slow but has picked up during the second quarter. There has been an increase in demand and decrease in expenses, providing a relief on the margins. Of the 177 firms that took part, 83 were Am Law 100 firms, 45 were Second Hundred, 49 were boutique firms, and 37 were international.
Revenue is up 3.3 percent but still lower than last year at this time. The demand that drove this number up came around March. Expense growth was at 3.1 percent, lower than the first quarter at 3.9 percent. This can be explained by the fact that bonuses are generally paid during the beginning of the year. Firms have also increased their numbers since there is a bigger demand so the amount in salaries that firms are paying are significantly different from last year.
The operating expenses were up 2 percent due to a higher fee for office spaces, technology, and health insurance. One of the biggest jumps was in inventory up 4.8 percent, the highest increase in six-months since 2011.
The niche/boutique firms are seeing the best results with an overall revenue increase of 7 percent and smallest increase of expenses by 1.9 percent, giving them a cushy profit margin.
Photo: wkc.org