Citi Private Bank and Hildebrandt Consulting Published an interesting report on growth in the Legal Market. Their executive summary states:
The law firm industry remains in a channel of modest demand growth with high levels of dispersion and volatility.1,2 Revenue growth during the past several years has come primarily via standard rate increases, as realization has been under pressure and the modest demand growth has added limited lift. Headcount growth has come in the form of increased lawyer leverage, as equity partner headcount has remained essentially flat. And margin growth, where firms have been able to achieve it, has come in large part from overhead expense controls as the industry has become leaner.
Looking out to 2018, we project that industry revenue growth and profit per equity partner growth will remain in the mid-single-digit range on average. Behind these average results, we expect to see variability in individual firm performance, which will continue to drive consolidation in the industry.
A strong brand will be critical for firms to capture revenue growth in their established markets, practices, and industries. For some firms, further growth in this environment will come from expansion into new markets, practices, or industries. For many, growth will come from laterals or combinations.
Success in this market will likely come to firms who are most nimble in their response to client demands for a more efficient delivery of legal services. In the long term, success will likely come to firms who adjust their talent models to market forces and who focus on building a robust growth model that attracts, develops, and retains the best legal talent.