Big Law firms have continued to make gains heading into the home stretch of 2024, another industry report this week has found, with demand and revenue up from midyear when firms were already on track for “one of the strongest years” in recent memory.

The Citi Global Wealth at Work Law Firm Group found demand up 3.2% across the industry, revenue up 11.9% and productivity up 2.2% at the nine-month mark of the year. The revenue number also outpaces expense growth, which rose 7.5%, the group noted. The most recent demand, revenue and productivity gains are relative to the same time period in 2023, and they are higher than the midyear point figures.

There hasn’t exactly been a broad-based rebound in transactional activity yet this year. But there has been plenty of litigation, antitrust, bankruptcy and investment and management funds work across the board, plus a few large-cap merger and acquisition deals that have gone to a subset of Am Law 50 firms, said Gretta Rusanow, head of advisory services for the Citi law firm group.

“The point is not only are we seeing lawyers busier, we’re seeing them busier across a pretty broad cross section of practices,” she said in an interview Wednesday.

While other observers have found similarly positive performance trends, they—and a chunk of law firms themselves—have also pointed to some uncertainty for next year. About 43% of Am Law 200 firms said they were “[s]till uncertain” whether demand and revenue would increase or soften in 2025, according to the ALM Q3 2024 Flash Survey.

Still, the majority in that survey said they thought it would increase. And Rusanow said Wednesday that her group is generally “very optimistic” about 2025. “I think we will see continued strong activity among the practice areas that have driven performance year-to-date, plus the rebound of some transactional activity across the board,” she said, adding, “I do think as the interest rates continue to cycle through, together with the clear outcome in the [U.S.] election, we will see that resurgence in transactional activity across each of the segments.”

The numbers were also encouraging by segment, Rusanow said. Top 50 firms saw demand increase by 3.6%, while the Second 50 saw a 3.2% increase. Both Second Hundred and smaller firms saw 2.2% demand growth.

“In an industry where we’ve become so accustomed to demand growth numbers trending in [between 1% and 2%], to be coming in across the board with each of the segments exceeding those historical norms just speaks to the strength of the market this year,” she said.

About 54% of Am Law 200 firm respondents said profitability is either "much better" (18%) or "slightly better" (36%) than expectations through Q3, according to the ALM flash survey with firms. Of course, billing rate hikes are a significant profit driver. The most recent Thomson Reuters Law Firm Financial Index, for example, had worked billing rates up by 6.5% in the third quarter, while Wells Fargo had standard or "rack" rates up 8.8% at midyear.

The Citi law firm group tallied overall inventory growth at 12.6%, and an overall lengthening of the collections cycle at 0.6%. However, Rusanow noted, the cycle shortened for Second Hundred firms and increased only “marginally” for the Am Law 50. “So, in other words, we’re seeing across most of the segments, a stabilizing of the collection cycle,” she added.

Despite their strong performance so far this year, Rusanow said she hasn’t heard firms talking about prepaying expenses more for 2025 or being less disciplined about collecting what they’re owed by year’s end.

The revenue that comes in during Q4 “is always disproportionately higher than the other quarters of the year,” she said, adding, “I don’t anticipate any more urgency than we’ve seen in the past.”

The nine-month mark also saw a continuation of what Rusanow called “one of the most notable trends we’ve been watching in recent years"—the growth of income partners. Equity partner head count was down very slightly across the industry, dipping about 0.2%, while income partner growth was up by 4.4%. The all-partner head count growth rate was about 1.8%.

“The concept of the income partner category is nothing new in the industry. What has become more popular is the adoption of, and growth and investment in, an income partnership by a number of firms who would not have considered that a few years ago,” Rusanow said.