CitiBank Survey Shows Poor Economic Performance by D.C. Law Firms

Law firms in the District of Columbia are usually held to be in better footing than law firms in other parts of the country when it comes to economic performance, as they are close to government processes, and because they have the opportunity to utilize non-lawyer equity. However, a recent survey for the first half of 2013 published by the Citi Private Bank Law Firm Group shows the firms from D.C. that were surveyed were performing poorly against expectations.

Though out of 172 law firms surveyed, only 12 belonged to D.C. and many law firms which have headquarters elsewhere, but have an established presence in D.C. were not considered, still the survey results are cause of concern for law firms headquartered in D.C.

At the very least, the survey challenges the common perception that D.C. law firms are in a better position due to proximity to the corridors of power and ability to pull in non-lawyer resources.

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The CitiBank survey shows that on three major economic fronts - revenue, demand and productivity, D.C law firms are not faring better than law firms in other areas of the country.

While the revenue at the surveyed D.C. law firms declined by 2.4 percent, revenue at law firms nationwide grew by 0.5 percent during the first half of this year.

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While demand at the law firms surveyed nationwide fell by 1.3 percent during the first six months of 2013, for the D.C. law firms surveyed, the drop in demand was 2.5 percent.

While the nationwide statistics for drop in productivity at law firms was 1.7 percent, the D.C. law firms surveyed showed a decline of 4 percent in productivity.

The only positive difference was that while growth of expenses in D.C. law firms was by 2.2 percent, the nationwide average is 2.4 percent. But that is too small a difference to be happy about. And on the other hand, it can be argued that restraining expensed could have led to the big declines in revenue and productivity.

However, D.C. law firms seem to be hiring more than law firms in other areas - which may be another factor that figured in the dropping statistics - and are trying to prepare them better to face the future. While headcount at law firms nationwide went up by only 0.8 percent, D.C. law firms made new hires at almost double the national rate and headcount went up by 1.6 percent.