It’s an interesting question, right? If you know of a managing partner who could use some medication, please email us or text us (646-820-8477).
What prompted the question on our part? Here, we’ll tell you….
UPDATE (5:30 p.m.): Now with added commentary from Anonymous Partner.
Back in September, just six short months ago, we reported on the waning confidence of managing partners at major law firms. They expressed concerns about the economy as a whole, as well as worries over the growth of expenses compared to revenue.
Citi Private Bank’s Law Firm Group, the largest lender to U.S. law firms, just released its quarterly survey of managing partners for the fourth quarter of 2012. And despite all the gloomy headlines that dominated the final weeks of 2012 — such as the fiscal cliff crisis, which has morphed into the sequester — the partners sounded significantly more optimistic.
Here are some highlights:
- The overall confidence score reached 115 (out of 200), up 13 points over the previous quarter (and four points higher than the quarter before that).
- Confidence in the economy at large climbed 18 points to 119. Forty-two percent of surveyed partners feel “somewhat better” about the direction of the economy.
- Confidence in business conditions for the legal profession also jumped by 18 points, hitting 113.
- Confidence in the demand for legal services rose by 12 points to 149 (which is slightly higher than where prior readings have hovered).
Observers have noticed that the benefits of the latest economic recovery have been unevenly distributed. In general, capital has fared better than labor. Corporate earnings have increased, as reflected in the strong performance of the stock market, while earnings for 99 percent of Americans have decreased.
Based on their confidence levels and the early reports on their 2012 performance, Biglaw firms are more closely aligned with capital than with labor. And this is hardly surprising. If corporate America is doing well, their legal handmaidens should do well too.
You can check out a more detailed report here. Thanks to our friends at Citi for sending our way.
UPDATE (5:30 p.m.): Here are some thoughts from Anonymous Partner, who isn’t so sanguine:
I think the 4Q of last year was interesting for a lot of firms. There is a general consensus that legal demand picked up as companies looked to close deals while the much-vilified “Bush tax cuts” were still in effect. Couple their expiration with uncertainty about the post-election economic future, and people got busy. The rich got richer, some firms had their years saved, and some firms were left with the awful knowledge that they are in trouble.
From what I hear, this acceleration of work into 4Q 2012 had its cost. This year has not started off well for Biglaw. I hope it turns around, or things can get ugly fast.
Dewey sense danger in the air? Hold on to your hats….
Managing Partner Confidence Index: Executive Summary – 4Q 2012 [Citi Private Bank Law Watch]
Mostly Modest Growth for a Dozen Top New York-Based Firms [Am Law Daily]