Law Firm Leaders Express Growing Anxiety Over Global Economic Outlook
While Big Law leaders view the 2019 economy with trepidation, many are confident in their own law firms' prospects.
January 10, 2019 at 01:55 PM
3 minute read
The original version of this story was published on The American Lawyer
Wall Street analysts. The World Bank. And now law firm leaders.
Everybody, it seems, is lowering their expectations for the 2019 economy.
Big Law managing partners Thursday joined a chorus of financial prognosticators who have expressed growing anxiety over this year's economic outlook. A semiannual Citi Private Bank Law Firm Group measurement of law firm leaders' outlook for the global economy saw its largest decline in at least two years, falling by 15 points to 92, below a neutral score of 100.
On a positive note, Big Law leaders' pessimism regarding the broader economic outlook has not completely carried over to their belief in their own firms' futures. Law firm leaders surveyed by Citi expressed growing optimism regarding demand, realization rates and revenue. They expect large increases in partner and associate head count.
Firms do have wind in their sails. The legal market last year experienced one of the strongest years since the financial crisis, according to a number of reports.
Nearly 75 percent of leaders expect positive demand growth in the first half of 2019, while only 7 percent of leaders expect demand to decline. About 50 percent of leaders expect revenue growth between 2 and 5 percent, while only 7 percent expect revenue declines.
Net income was the lone law firm financial metric that leaders as a group became less optimistic about compared with the previous survey in the second half of 2018. Even so, only 8 percent of leaders expect net income to decline. Nearly 20 percent of respondents expected growth of more than 5 percent.
The apparent dissonance between leaders' economic pessimism and optimism for their own firms has been evident in the Citi survey in other economic cycles, too. For instance, the highest level of confidence leaders expressed in the global economy over the past two years happened in the first half of 2018. That was the same month they expressed their lowest level of confidence in their own firms' revenue in the past two years.
Law firm leaders are not alone in viewing the world economy with trepidation.
This week, the World Bank lowered its projections for global GDP growth in its semiannual outlook for the world economy, which it titled “Darkening Skies.” The report said global GDP would grow 2.9 percent, down from 3 percent growth in 2018.
“Growth has weakened, trade tensions remain high, several developing economies have experienced financial stress, and risks to the outlook have increased,” the World Bank's report said.
Meanwhile, at least five large investments bank have lowered their projections for the stock market, CNBC reported this week. Barclays lowered its year-end 2019 projection for the S&P 500 to 2,750, down from 3,000.
Read More:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllHighest-Earning Partners May Be Looking to Cash In on Early Retirement
5 minute readGrayRobinson Opens Office in Pensacola, Marking First New Office Since 2019
3 minute readFrost Enters Arizona Market With Acquisition of Litigation Boutique
Trending Stories
- 1Conn. Appeals Court Slices $150 Million in Statutory Damages From Judgment Owed by Alex Jones
- 2Boies Schiller Flexner Adds Antitrust, Intellectual Property Partners
- 3Is AI Worth the Risks in Criminal Justice System?
- 4Goldberg Segalla Launches in Wilmington
- 5$8M Med Mal Verdict Against Abington Hospital Fends Off Pa. Appeals Court Challenge
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250