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Will law firms’ financial results for 2017 fall short of 2016?  Legal industry results through the first nine months of 2017 suggest that’s a real possibility.  Revenue growth decelerated from the first half of the year, as demand declined and the collection cycle lengthened.  There’s some comfort in expense growth also moderating, though margins remained compressed.

The good news is that with an unusually large buildup in accounts receivable at quarter-end, the legal industry is well set up for a strong year-end collections push.

These results are based on a sample of 183 firms (80 Am Law 100 firms, 49 Second Hundred firms and 54 niche/boutique firms).  Thirty-three of these firms fit our definition of either “international” (less than 25 percent but more than 10 percent of lawyers based outside the United States), or “global” (at least 25 percent of lawyers based outside the United States).  Firms with less than 10 percent of lawyers based outside the U.S. are classified as either “national” (less than 50 percent of total lawyers based in headquarter office), or “regional” (greater than 50 percent of lawyers based in headquarter office).   Citi Private Bank provides financial services to more than 600 U.S. and U.K. law firms and more than 35,000 individual lawyers.  Each quarter, the Law Firm Group confidentially surveys firms in The Am Law 100 and the Second Hundred, along with smaller firms.  In addition, we conduct a more detailed annual survey and produce the Law Firm Leaders Confidence Index semiannually.  These reports, together with extensive discussions with law firm leaders, provide a comprehensive overview of current financial trends in the industry as well as forward-looking insight.

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