A year ago, in writing about how major law firms performed in the first half of 2013, I wondered whether Biglaw might be the proverbial frog in boiling water. I now wonder whether the analogy might still hold, but in a good way: could we be witnessing a quiet boom for Biglaw, happening so gradually that we don’t even realize it’s here?
In the past few weeks, a slew of mega-mergers have made headlines — which will hopefully turn into contributions to law firm coffers. But even if you focus just on the first six months of 2014, excluding the busy months of July and August, there’s good news to report.
Our friends at Citi Private Bank, a leading law firm lender, just released their report on how Biglaw fared in the first half of 2014. What are the key findings?
With this year more than halfway done, let’s look in the rear-view mirror and survey managing partners’ confidence in the legal industry during the second quarter of 2014. Wall Street investors seem generally optimistic, at least based on the state of the stock market (despite today’s turbulence). Are law firm leaders similarly hopeful?
Survey says — well, nothing terribly exciting, but let’s have a look anyway….
D.C. is dysfunctional, as pundits constantly complain about. Has the lack of productivity on Capitol Hill expanded to affect the private law firms of Washington?
Perhaps. According to Citi Private Bank’s recent survey of law firm performance, which showed that the first half of 2013 was bad for Biglaw nationally, D.C.-based law firms did even worse than their counterparts in other cities.
The sky is not falling for the world of large law firms. But could Biglaw be a frog in boiling water? We can’t rule that possibility out just yet.
The latest report on law firm performance, focused on the first six months of this year, shows some signs of weakness. The numbers aren’t awful, but if Biglaw continues to travel down this path, it won’t wind up in a good place….
The first quarter of 2013 was not particularly kind to large law firms. There’s no crisis at hand, but things aren’t exactly great either, with demand registering as slightly sluggish.
Citi Private Bank’s Law Firm Group, which possesses great insight into the legal industry because of Citi’s role as a leading law firm lender, just released its quarterly survey of managing partners’ confidence. The results are consistent with the general sense of “meh” that we’ve been anecdotally picking up from partners we hear from….
I was recently chatting with a young litigation partner about how the year was going for his firm thus far. He confessed it was off to a sluggish start. He was not extremely busy himself, but he said that his colleagues on the transactional side were practically twiddling their thumbs.
He wondered: was this slowness specific to his firm, or was the legal industry in general not exactly going gangbusters? I shared with him my sense, admittedly anecdotal, that 2013 to date has been pretty “meh.”
Now we have actual data on the first quarter. My partner friend should be relieved. Misery loves company….
The legal economy right now is not unlike the economy writ large. People with small or non-existent paychecks are suffering, but those at the top are actually doing just fine for themselves.
This isn’t necessarily a bad thing; it might just be reality. As David Brooks put it in a recent New York Times column, “[t]he meritocracy is overwhelming the liberal project.” He argues that in our current, rapidly changing economy, people who are smart, well-educated, and hardworking just end up doing better and better for themselves — and there are practical limits on how much redistributive policies can “fix” this situation.
Sorry for that digression — back to Biglaw. Let’s take a look at how the rich are getting richer….
What is the future outlook for Biglaw? The Magic 8 Ball is not optimistic.
Last month, we wrote about a less-than-cheery report from Citi Private Bank’s Law Firm Group, the largest lender to U.S. law firms. The bottom line of that report for law firms: “With weak demand growth and the continuation of expense growth, it is likely that expenses will continue to grow at a faster pace than revenue, squeezing margins and making it tricky to achieve even low single-digit profit growth.”
As we mentioned in Morning Docket, there’s a new report out from our friends at Citi, and it also sounds pessimistic notes. It concerns the confidence levels of law firm managing partners.
What are the powers-that-be in Biglaw worried about right now? Let’s find out….
The fable of the ant and the grasshopper may have lessons for the world of large law firms.
As regular readers of Above the Law well know, most major law firms — with a fewnotableexceptions — did not pay spring or mid-year bonuses in 2012. Our associate readers generally viewed this news with disappointment, while our partner readers had less of a problem with it.
But perhaps even associates should have been supportive of their firms’ decisions not to pay spring bonuses. Storm clouds are gathering over the law firm world. So says a recent report by Biglaw’s biggest bankers, over at Citigroup….
The legal industry is being disrupted at every level by technological advances. While legal tech entrepreneurs and innovators are racing to create a more efficient and productive future, there is widespread indifference on the part of attorneys toward these emerging technologies.
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: firstname.lastname@example.org.
We at Kinney Asia have made a number of FCPA / White Collar US associate placements in Hong Kong / China thus far in 2014. Most of such placements have been commercial litigation associates from major US markets, fluent in Mandarin, switching to FCPA / White Collar litigation. Some have already had FCPA experience, but those are difficult candidates for firms to find (this will change in coming years as US firms are now promoting FCPA / White Collar to their 2L summers who are fluent in Mandarin and have an interest in transferring to China at some point).
Legal Week quoted Kinney’s Head of Asia, Evan Jowers, extensively in the following relevant article here.
There is a new trend in the market, though, where mid-level transactional US associates, fluent in spoken Mandarin and written Chinese, are interviewing for and in some cases landing junior FCPA / White Collar spots in Hong Kong / China at very top tier US firms.
When the LexisNexis Cloud Technology Survey results were reported earlier this year, it showed that attorneys were starting to peer less skeptically into the future, and slowly but surely leaning more toward all the benefits the law cloud has to offer.
Because let’s face it, plenty of attorneys are perhaps a bit too comfortable with their “system” of practice management, which may or may not include neon highlighters, sticky notes, dog-eared file folders, and a word processing program that was last updated when the term “raise the roof” was still de rigueur.