We saw improvement, albeit modest, in industry performance from the first-quarter results to the first half of 2019, but so far it’s a different year than last year. With marginal demand growth and a continued lengthening of the collection cycle, 2019 has reverted to a rate story. Meanwhile, expenses have continued to grow at a faster pace than revenue, placing pressure on margins. Looking ahead, the back half of the year should benefit from strong inventory balances at the midyear point. It will be a challenge for the industry to see a repeat of 2018’s strong performance in this year’s results, but expect it to be a good year relative to earlier post-recession years.
These results are based on a sample of 191 firms (77 Am Law 100 firms, 54 Second Hundred firms and 60 niche/boutique firms). Thirty-six of these firms fit our 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.