At least that’s the takeaway from the latest Citi Private Bank Law Firm Leaders Confidence Index. The report, compiling responses from the “Managing Partners, Chairs, Executive Directors, COOs and CFOs of 155 law firms (38 Am Law 50, 34 Am Law 51-100, 39 Am Law 2nd 100, 44 Niche/smaller),” gathered the mood of firm leaders on the economy and firm financials for the second half of 2016.
The conclusions are, actually, a curious artifact at this point. It’s hard to say how these leaders would have felt about the global economy months before Brexit. Or how they understood growth long before Cravath kicked the salary hornet’s nest.
For example, on the question of the Global Economy, leaders were lukewarm:
| Considerably Better | 1% |
| Somewhat Better | 15% |
| The Same | 52% |
| Somewhat Worse | 32% |
| Considerably Worse | 0% |
Oh, how many firms watched their London office disappear in a burst of Floo powder after they filled this survey out. There should be an online petition for these leaders to change their votes on the Citi survey.
Meanwhile, the demand growth numbers are what we’re used to seeing out of law firms: “good, not great.”
| Growth greater than 5% | 8% |
| Growth 2-5% | 35% |
| Growth less than 2% | 18% |
| Unchanged | 18% |
| Decrease less than 2% | 11% |
| Decrease 2-5% | 7% |
| Decrease greater than 5% | 2% |
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A total of 61 percent of respondents see a demand increase of some kind. That’s down from the 66 percent who saw the same trend in the last report. The moral of the story is that law firm leaders are still “cautiously optimistic.” Will this hold with the U.K. trying to blow up its economy and clients worried about raises bringing on creeping fees?
But for the $180K question: what of associate FTE over the second half of the year?
| Growth greater than 3% | 19% |
| Growth 1-3% | 30% |
| Growth less than 1% | 12% |
| Unchanged | 18% |
| Decrease less than 1% | 8% |
| Decrease 1-3% | 8% |
| Decrease greater than 3% | 5% |
This is actually a bit of a pullback from the previous report, but this was also before firms opened up their coffers. There’s a price for everything in this world, and with the majority of law firm leaders believing, consistently across these reports, that partners are pretty much maxed out on utilization, it’s going to be the associates who have to pick up the slack.
The next report is going to be very interesting on the FTE question…
Joe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.