Citi Private Bank Law Firm Group and Hildebrandt Consulting Issue 2019 Citi Hildebrandt Client Advisory
December 11 2018 - 5:30AM
Business Wire
U.S. Law Firm Industry is Seeing Strongest
Growth in Almost a Decade
Citi Private Bank Law Firm Group and Hildebrandt Consulting
today released their 2019 Citi Hildebrandt Client Advisory, which
establishes the broad landscape for the law firm industry, how
firms are responding to industry challenges and their best
opportunities for growth in the year ahead.
Based on Citi data compiled in this year’s Client Advisory, the
U.S. law firm industry is poised to see the strongest year of top
line growth for almost a decade in 2018 and 2019 is expected to be
another good year with top line growth. Projected profit per equity
partner growth is expected to increase in 2019.
Market dispersion and volatility are also expected to continue
in 2019, potentially causing accelerated consolidation of the
industry, particularly in the Am Law Second Hundred.
The Client Advisory indicates growth in the industry has been
concentrated in the largest and smallest firms during 2018,
suggesting firms with strong reputations and differentiated brands
are being favored in the market, regardless of their size – and
this trend is expected to continue in 2019.
An additional key finding of this year’s Client Advisory is that
with an expected acceleration in equity partner retirements in the
coming years, firms could face a shortfall in their permanent paid
in capital. Law firms will need to continue to invest in talent
development over the next ten years to ensure these equity partners
and their paid in capital can be replaced.
“This year’s Client Advisory describes how we believe the most
successful firms in 2019 will outperform the market by maintaining
focus on profitable growth and delivering what their clients need.
We expect firms will do even more with pricing, project management
and leverage models to stay competitive. They will be following
growth strategies that build on their market strengths while
protecting their firms’ culture,” said Gretta Rusanow, Head of
Advisory Services, Law Firm Group at Citi Private Bank. “As lateral
activity is likely to remain aggressive and partner retirements are
likely to accelerate in the coming years, it will also be important
for firms to focus on institutionalizing clients.”
“We are optimistic about 2019 and do not anticipate a downturn
in the industry. When the inevitable downturn does occur, the
biggest expense management opportunity for firms will be to study
whether the composition of their leverage models makes sense from a
profitability standpoint,” explained Brad Hildebrandt, Chairman of
Hildebrandt Consulting. “That said, experience tells us that law
firms are typically quick to recover from economic downturns, so
long as their internal fundamentals are sound.”
This year’s Client Advisory also included research about “price
elasticity of demand” in the law firm industry between 2010 and
2017. The research found that demand growth was determined more so
by brand than price, and that clients remain willing to pay higher
rates for the legal services they receive and regard as the most
valuable.
The 2019 Citi Hildebrandt Client Advisory draws from data
collected from a sampling of primarily U.S.-headquartered law firms
by Citi Private Bank. For firms headquartered outside the U.S. and
third-party providers of legal services, the information is mostly
anecdotal. For third-party providers of legal services, our
information is mostly anecdotal. Sources include the “Citi Annual
Survey Database” of 191 U.S.-headquartered firms, including 45 Am
Law 1-50 firms, 33 Am Law 51-100 firms, 45 Am Law 2nd 100 firms,
and 68 additional firms; the “Citi Flash Survey”, including 41 Am
Law 1-50 firms, 29 Am Law 51-100 firms, 48 Am Law Second Hundred
firms and 49 additional firms; the “Citi Law Firm Leaders Survey”
of 55 large firms headquartered in the U.S., UK, Australia, China
and India; and the “Law Firm Leaders Confidence Index,” which
reports the forward-looking opinions of law firm leaders from 156
U.S.-headquartered firms.
The full report can be accessed via the Citi
Private Bank website here.
About Citi Private Bank:
Citi Private Bank is dedicated to serving worldly and wealthy
individuals and families, providing customized private banking
across borders. With approximately $390 billion in global assets
under management, the franchise includes 48 offices, serving
clients across 130 countries. Citi Private Bank helps clients grow
and preserve wealth, finance assets, make cash work harder,
safeguard assets, preserve legacies, and serve family and family
business needs. The firm offers clients products and services
covering capital markets, managed investments, portfolio
management, trust and estate planning, investment finance, banking
and aircraft finance, as well as art and sports advisory and
finance.
About Citi:
Citi, the leading global bank, has approximately 200 million
customer accounts and does business in more than 160 countries and
jurisdictions. Citi provides consumers, corporations, governments
and institutions with a broad range of financial products and
services, including consumer banking and credit, corporate and
investment banking, securities brokerage, transaction services, and
wealth management.
Additional information may be found at www.citigroup.com |
Twitter: @Citi | YouTube: www.youtube.com/citi | Blog:
http://blog.citigroup.com | Facebook: www.facebook.com/citi |
LinkedIn: www.linkedin.com/company/citi
About Hildebrandt Consulting:
Hildebrandt Consulting is continuing its long and distinguished
history as the preeminent global consulting firm in the legal
profession. With clients in over 15 countries, Hildebrandt has
built up unmatched expertise in every aspect of professional firm
management. Our reputation for helping firms arrive at strategic
solutions comes from our knowledge of the interdependent elements
that contribute to overall business performance.
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Patricia Tuma+1 212.793.7682patricia.tuma@citi.com
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