New York-headquartered law firms saw a decrease in demand that led to overall flat revenue growth in the first half of 2019, according to new data from Citi Private Bank's Law Firm Group.

Still, Citi said New York firms in its survey have built up an inventory of unpaid bills that could boost their bottom lines in the coming months.

The bank's flash survey of 191 firms' key financial metrics for the first six months of the year included data on 34 New York-headquartered firms, including some with a global practice and others with a domestic focus.

Overall, the New York firms in the first six months of 2019 logged 2.7% fewer billable hours than in the first half of 2018, but reported rates that were 4.8% higher. On the other side of the ledger, expenses grew by 3.6%.

While New York-based firms are feeling more pressure on their margins, there are still silver linings, according to Gretta Rusanow, the head of advisory services for Citi Private Bank's Law Firm Group. One is that New York law firms' inventories—including billed and unbilled time—have grown by 4.1% in the first half of 2019, giving them more to collect. Another is that firm leaders still see New York as their No. 1 growth market, "far ahead of any other market," Rusanow said.

"It's unlikely we're going to see the same levels of growth we reported in 2018, but that aside, it's still going to be a decent year," she added.

Multiple factors could be at play in revenue being flat. Rusanow said large-scale transactional work was lower than in the first half of 2018 and capital markets were off to a slow start this year. She said there were anecdotal reports of "a softening in trial litigation" as well.

Both revenue and expenses grew less, from the first half of 2018 compared with the same period in 2019, for New York firms than in the U.S. legal industry as a whole. Industrywide, expenses grew 5.9%, largely driven by higher compensation expenses, and revenue grew 4.1%, according to Citi's figures.

The head count growth picture was also more moderate in New York than in the rest of the country. Law firm head count for the New York firms in Citi's sample grew just 0.8%, less than half the 1.7% recorded in the broader sample. The equity partnership ranks in the Big Apple contracted by 0.1%, not far from the 0.1% growth recorded in the nationwide sample.