US law enjoys strongest growth in almost a decade, getting paid remains problematic, branding counts - here's the outlook for 2019!
The market is differentiating between the quality brands of the largest and the smallest firms.The concentration of growth within these two market segments indicates that it is reputation and brand that are currently helping firms win new work, rather than scale alone.
This is according to the 2019 Citi Hildebrandt Client Advisory, an annual view of the current landscape of the law firm industry looking at how law firms are responding to these conditions and their best opportunities for growth in 2019. Even within the Am Law second hundred, which continued to experience pressure in 2018, a group of firms successfully grew demand for their services. Like their larger and smaller counterparts, these firms were also assisted by their differentiated brands. While dispersion remains a market characteristic, so does market volatility, with a high proportion of firms continuing to experience reverse trends in demand performance from one year to the next.
The report says the most successful firms will outperform the market by maintaining an approach that is focused on profitable growth and delivering what the client needs while maintaining efficient and adaptable approaches to delivering legal services. The authors expect 2019 to be another strong year in top line growth, in the range of 6 to 7 percent. They also expect increasing expense pressure, projecting profit per equity partner growth in the mid-single-digit range. With dispersion expected to remain, further consolidation is likely, particularly where demand and expense pressure are most acutely felt. They expect to see strong outperformance by the firms with the strongest brands. The full report is here.