Having faced many challenges in 2020, the law firm industry demonstrated its resilience and adaptability, resulting in better than expected industry performance. Expense management was a key factor driving industry average double-digit growth in profits per equity partner. And while demand declined slightly, the shift in work to more senior billers, coupled with a focus on collections throughout the year, helped drive revenue growth. Behind the averages, we saw wide dispersion across and within market segments, and particularly between the Am Law 50 and the rest of the industry. Looking forward, while there will be some headwinds, strong year-end inventory levels and positive activity momentum place the industry in a good position to start 2021.
These results are based on a sample of 202 firms (80 Am Law 100 firms, 54 Second Hundred firms and 68 niche/boutique firms). Forty-six of these firms fit Citi Private Bank’s definition of either international (less than 25% but more than 10% of lawyers based outside the United States) or global (at least 25% of lawyers based outside the United States). Citi Private Bank provides financial services to more than 700 U.S. and U.K. law firms and more than 50,000 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 semiannually produce the Law Firm Leaders Confidence Index. 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.