Citi Survey: DC Revenue Growth Lags Behind Rest of US
Despite plenty to keep lawyers busy in Washington this year, a survey of third quarter results found hometown firms playing catchup with their counterparts in other regions.
November 21, 2018 at 02:11 PM
2 minute read
Revenue results for 2018 could reveal the strongest growth for U.S. law firms since the Great Recession. But the Washington, D.C., market has comparatively struggled this calendar year, according to Citi Private Bank Law Firm Group client adviser David Altuna.
Citi's flash survey of the third quarter found law firm revenue growing by 6.3 percent nationwide, while D.C. showed the lowest level of revenue growth during the same time frame—1.4 percent—of all 11 regions Citi tracked.
Altuna said the D.C. market also showed a decline in demand of 1.5 percent.
“We get the sense that there's a lack of activity, but we think that's a function more so of the competition in the market and the fact that new entrants are making it more difficult for legacy firms,” Altuna said. “We notice that the work that's being done is commanding a high rate. It's high-value work. It's very attractive work.”
Citi's survey analyzed markets by attributing firm's results to the city where they are headquartered, so the survey's snapshot of the D.C. market doesn't capture national and global firms that are active in nation's capital but aren't homegrown, and it omits some new entrants. The lagging signals Citi found in the District largely pertain to legacy D.C. firms with a well-established brick-and-mortar presence in Washington.
Washington firms experienced robust revenue growth last year, and Altuna said the strong revenue growth firms are showing nationwide is a good sign for the industry overcoming end-of-year expense pressures. But Washington firms will be under more stress to mobilize partners to collect in 2018's final quarter to combat those expenses, which included widespread associate pay hikes thus year.
Citi found billing rates were up 5.6 percent in D.C., which Altuna said is the highest result for all of the regions it analyzed. The need for sophisticated work and constant change in Washington in recent years—the 2016 presidential election, 2018 mid-term elections, and Amazon's looming arrival—have created growth opportunities for lawyers across D.C. as a whole, Altuna said.
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