Law firms saw revenue growth in 2012
Despite all odds, 2012 proved to be a profitable year for Big Law.
January 29, 2013 at 05:25 AM
3 minute read
The original version of this story was published on Law.com
Despite all odds, 2012 proved to be a profitable year for Big Law.
Wells Fargo Private Bank's Legal Specialty Group has released a preliminary survey showing that revenue among large U.S. firms increased in 2012. The numbers, which on average were better than those in the years since the recession, were a “complete surprise,” Jeff Grossman, national managing director for the specialty group, told the Wall Street Journal's Law Blog.
The survey found that law firms saw a 5 percent increase in gross revenues compared to 2011, and net income grew by 6 percent. Additionally, profits per equity partner increased by nearly 5 percent.
Grossman says the increase was likely due to a push among firms to ramp up collections as well as last-minute business as clients hurried to close deals in anticipation of the fiscal cliff. Still, he says, law firms will have to work hard to keep numbers up in 2013. “We really don't want firms to become complacent,” he told the Law Blog. “The reality is that 2013 is going to be under the same pressure as 2012. … The concern is if they take their foot off the gas pedal on controlling expenses, or stop focusing on productivity.”
Experts and lawyers were rightly concerned about low numbers in 2012. This past fall, law firm managing partners said they were losing faith in the economy. A study predicted grim profits for law firms in the second half of 2012. Another survey found that the median salaries for Big Law's first-year associates dropped to 2007 levels. Thomson Reuters' Peer Monitor Index reported in November that the demand for legal services in the U.S. declined for the second straight quarter. The year rounded out with Wells Fargo Private Bank reporting that 15 percent of U.S. firms planned to reduce their number of partners in the first quarter of 2013 due to stunted financial growth caused by low billing hours.
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