Law firms in the southeastern United States, including Florida and Georgia, saw a 7.7 percent increase in revenue despite frantic hiring and cost pressure from the latest round of associate pay raises, according to a survey by Citi Private Bank’s Law Firm Group.
The survey saw participation from 190 law firms of varying size—44 Am Law 50 firms, 35 Am Law 51-100 firms, 51 Am Law Second Hundred firms and 60 others— a group that includes boutique and niche firms. Figures for the southeast region were drawn from a sample of 17 firms on the east coast bounded by Virginia to the north and excluding Washington, D.C.
Buoying the high revenues were an above-expected increase in collections and steady demand and rate growth. The full-year report reversed the trend reported in the last Citi report, which looked at only nine months of 2018. At the time, costs in the southeast were outpacing revenue growth, and it was unclear whether 2018′s salary increases would eclipse the typical growth in revenues as firms scramble to collect at the end of the year.
In spite of the pay raises and a head count growth rate that far surpassed the national average — 3.2 percent compared to 1.4 percent, respectively — firms in the southeast saw revenues outpace costs by nearly 1 percent.
There is a caveat, though, said Senior Client Advisor John Wilmouth. Firms may have pushed some of their overhead costs to early 2019.
“Things like lease payments and insurance premiums. It could be timing or they just didn’t spend as much,” Wilmouthsaid.