Last year was the best the legal industry has had in the post-2008 environment. Will 2015 continue that trend? Not based on the first-quarter results, though the first quarter rarely tells the story for the full year. Demand was essentially flat, translating into modest revenue growth. At the same time, expenses grew at a much faster pace than revenue, placing pressure on margins—not unusual for the first quarter, but the reverse of what we saw in the first quarter of 2014. Dispersion in performance of individual firms remains. Counter to the recent trend of larger and more international firms outperforming the market, this time we saw stronger revenue growth outside of the Am Law 50 and especially among national firms. In particular, the Am Law 51-100 outpaced the largest firms in revenue growth, driven by the strongest growth in demand seen across the industry.

These results are based on a sample of 173 firms (77 Am Law 100 firms, 49 Second Hundred firms, and 47 additional 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), and a further 61 fall into our definition of “national” (less than 10 percent of lawyers work outside the U.S. and less than 50 percent of lawyers work in the headquarters 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 Second Hundred, along with smaller firms. In addition, we conduct a more detailed annual survey. These reports, together with extensive discussions with law firm management conducted on an ongoing basis, provide a comprehensive overview of financial trends in the industry and insight into where it is headed.