The CDO Newswire



A Positive 3rd Quarter Report for Law Firms

It’s been awhile since we’ve posted.  Among the reasons we’ve been silent is that the financial picture for law firms generally had not seemed to change all that drastically over the last several months.  It’s been largely flat for quite awhile.

However, we recently came across some modestly positive news and thought we’d share it.  It’s from the latest Citigroup quarterly report and comes to us via the American Lawyer’s AmLaw Daily.

According to Citigroup, the first nine months of 2014 have been good financially for the law firm market.  However, the news has not been equally good for each segment within that market.  The largest and most international firms (particularly those with strong transactional practices) have fared the best.

Demand for legal services was up 1.6%.  At the same time, firms kept a tight control on their headcount, which increased by only .6%.  That means, of course, productivity is up.  Revenue was up 4.8% at the largest firms (the AmLaw 1-50), but only 3% for AmLaw 51-100 firms and only 1.5% for smaller firms.

Looking at profitability and the segmentation within the industry becomes more apparent.  74% of AmLaw 1-50 firms saw profits per equity partner (PPEP) increase whereas only 59% of AmLaw 51-200 equity partners saw an increase in their profits.  51% of smaller firms saw a PPEP decline.

Citigroup projects that when the data for the entire year is in, the story for 2014 will be “mid-single digit growth for the industry as a whole . . . [with] AmLaw 1-50 firms . . . significantly outperform[ing] the other industry segments.”

Details about how Citigroup gathers its data are contained in the American Lawyer article.


EIW/FIP Attire (Bumped)

Occasionally, we’re asked about appropriate on-campus interview attire.  We think our colleagues at the Yale Law School offer some good advice, which we’ve excerpted below.  Keep in mind that dressing appropriately is art, not science.  You should look at these simply as guidelines, not hard-and-fast rules.

Your attire should contribute to your professionalism.  Although employers may have different dress codes, err on the conservative side when interviewing.
Women (Advice for Men after the jump)

  • Skirt suits are still considered the most conservative, although women wear pants suits as well.
  • Black, navy and gray are the most conservative colors, but tans and other subtle shades are also acceptable.  Solids are preferable to patterns.
  • The skirt should be no more than two inches above the knee.
  • Wear a white or cream blouse (sometimes called a “shell”) with either short or long sleeves. Tank tops and camisoles are too casual. The blouse should either have a collar or a round neck. Avoid low-cut shirts.
  • Wear a white or cream blouse (sometimes called a “shell”) with either short or long sleeves. Tank tops and camisoles are too casual. The blouse should either have a collar or a round neck. Avoid low-cut shirts.

Read the rest of this entry »


2013 Shaping Up To Be Not-So-Great Year for BigLaw

Patrick Lamb, writing for the ABA Journal’s the “New Normal” series, parses three recent law firm financial reports that came out this week.  He concludes:  “Clients paid for fewer hours and spent less overall during the first 9 months of 2013 than they did in 2012, which was a down year itself.”   

You should read the whole piece (entitled “Latest data reveals growing problems for OldLaw”), which you can find here.

 

 

 


BigLaw Firm Leaders Less Optimistic This Quarter

At least that’s what a recent poll from Citi Private Bank’s Law Firm Group suggests.

Interviewed by the American Lawyer, Group CEO Dan DiPietro says that the results reflect “a growing understanding that what the environment was the last couple years will probably be the environment we’re stuck with for the foreseeable future.”

The bank surveyed 72 firms (27 Am Law 100 firms, 21 in The Second Hundred, 22 boutiques , and 2 UK firms.  

More Litigation Work Expected for Biglaw in 2014

Via the blog of legal business consulting firm Hildebrandt comes this report that most in-house counsel are expecting litigation work to double in 2014.

The source is BTI Consulting Group’s Litigation Outlook 2014.

The bad news, as Hildebrandt puts it, is that: “thanks to cost-containment measures such as early case assessment (ECA), alternative fee arrangements and a larger focus on settlements (the resolution rate is expected to hit 40 percent), the study stated that spending will increase a ‘mere tenth of a percent.’”

On the bright side (for firms, at least) in-house lawyers are expecting spending to increase more on IP litigation (2.7%).

 


Latest PMI Report Confirms Flat Legal Market for First Half of 2013

The latest from the Thomson Reuters Peer Monitor Index (PMI) further supports the view that the legal market continues to struggle to gain ground.  For background on the PMI, see our prior blog post on the subject.

You can read the entire report here.

Highlights include:

  • Q2 performance is in line with the overall trend of flat-to-slightly-higher growth that has largely in place for the past three years.

    Litigation, which comprises 40 percent of law firm billings, was down 1.5%, but patent and labor/employment work was slightly up.

    Attorney headcount growth slowed (to 0.7%), but firms are still continuing to add new attorneys at a faster rate than attrition.

    “Mergers and lateral hires – even sometimes of entire practice groups – are increasingly being employed as means to achieve growth. Growth is increasingly a zero-sum game that means taking business away from someone else.”

     

     

     


Private Sector Legal Market Remains Flat

We regularly post information about reports on the financial condition of the legal market.  The latest comes from Citi Private Bank and is reported in the Am Law Daily.  It deals with results from the first half of 2013 and the news is not great. 

There was a bit of revenue growth during this period (0.5 percent), however growth in expenses exceeded that.  Moreover, the growth is not attributable to any increase in a demand for legal services (which declined 1.3 percent).  Rather it’s due to an increase in rates (3.7 percent).    

Head count also grew during this period (0.4 percent in Q 2 and 0.5 percent in Q 1).  Based on their survey of information from 172 firms, Citi predicts that 2013 will be a flat year.  The 172 firms consisted of 81 Am Law 100 firms, 45 Second Hundred firms, and 46 additional firms.


Behavioral Interviewing

While most questions legal employers ask during on-campus interviews and in callbacks are aimed at gauging the candidate’s “fit” with the culture of the firm, recruiters have been trying to get their attorney-interviewers to ask more “behavioral” types of questions.

We thought we’d share a link to an article written by a career services colleague with some background on behavioral interviewing as well as a list of behvioral types of questions aimed at identifying whether candidates possess some of the core competencies legal employers look for. 

The questions were developed in connection with a presentation made at the 2013 NALP Annual Education Conference by Adrienne Allison, Public Interest Career Counselor, University of North Carolina School of Law, Amee McKim, Director of Legal Recruitment, Duane Morris LLP, and Rachel Peckerman, Associate Director, Public Interest Law Center, NYU School of Law.


EIW/FIP Attire (Bumped)

Occasionally, we’re asked about appropriate on-campus interview attire.  We think our colleagues at the Yale Law School offer some good advice, which we’ve excerpted below.  Keep in mind that dressing appropriately is art, not science.  You should look at these simply as guidelines, not hard-and-fast rules.

Your attire should contribute to your professionalism.  Although employers may have different dress codes, err on the conservative side when interviewing.

Women

  • Skirt suits are still considered the most conservative, although women wear pants suits as well.
  • Black, navy and gray are the most conservative colors, but tans and other subtle shades are also acceptable.  Solids are preferable to patterns.
  • The skirt should be no more than two inches above the knee.
  • Wear a white or cream blouse (sometimes called a “shell”) with either short or long sleeves. Tank tops and camisoles are too casual. The blouse should either have a collar or a round neck. Avoid low-cut shirts.
  • Wear a white or cream blouse (sometimes called a “shell”) with either short or long sleeves. Tank tops and camisoles are too casual. The blouse should either have a collar or a round neck. Avoid low-cut shirts.

Read the rest of this entry »


First Quarter Results Show Demand For Private Sector Legal Services Remains Flat

Demand for large law firm legal services was largely flat for the first quarter of 2013, according to a recently released report by Thomson Reuters.  Its quarterly Peer Monitor Index Report contains information about key law firm business metrics.    

We’ve regularly blogged about the Peer Monitor system before, but to refresh you , it is a service that allows law firms to access their peers’ financial data (in the aggregate) in exchange for supplying their own data to the system for others to access (on a normalized and aggregated basis).  Data from Am Law 100 firms, Am Law 200 firms, and mid-sized firms are included in the system. You can find more information about the Peer Monitor system here.

Litigation was down by 3.7%.   IP litigation was off by a greater amount — 6.8%.   The demand for Labor and employment services fell 0.4%.   Corporate work was down 4.4%.  Real estate was off 1.8%.  Tax work fell 5.9% and bankruptcy dropped 9%.
 
Attorney headcount grew 1.3% in the first quarter and the attorney replenishment ratio was 1.3.   This suggests that firms are adding new attorneys, but at a very slow rate (slower, in fact, than it had been over much of the last two years.
 
Firm prospects will improve as the economy improves, but no one is predicting anything other than continued modest economic growth.