According to coverage in AmericanLawyer.com:
The Good News: Law firm expenses decreased, compared with the first half of 2009.
The Mitigating Factors: Lower expenses are largely due to the reductions in lawyer head count that firms implemented last year. Also, since these reductions took effect mainly in the second half of 2009, we will now start to see much flatter year-to-year comparisons.
The Good News: The impact of head count reductions has been positive, with productivity up about 4 percent and contribution per lawyer (revenue per lawyer minus expense per lawyer) up almost 20 percent.
The Mitigating Factors: We're coming from a low base, and there will be a bump in head count created by the new incoming class starting in the third quarter, so firms may still have excess capacity.
The Good News: Billing rates are up, trending at 4 percent. This is a good result, albeit lower than the historic 6-7 percent.
The Mitigating Factors: We have two caveats. These rate increases are before realization, and we're still hearing that realization is under pressure (though not falling as steeply as in 2009). Further, since leverage is declining, rate increases may be artificially inflated because a higher percentage of more senior lawyers with higher billing rates are doing the work.
The Good News: Net income and profit per equity partner for the first half of 2010 show improvement over the same period in 2009.The Mitigating Factors: Given the traditional bump in fourth-quarter collections, this may not be an accurate reflection of net income and profit per equity partner for full-year 2010 and cannot be taken as a prediction.
The Good News: As a sector, demand at global firms is up by almost 2 percent.
The Mitigating Factor: Global firms underperformed the industry over the last two years.
Taken as a whole, there seem to be enough rays of sunshine to argue that we may have at least reached the bottom. But there are more than enough caveats to argue that we're still deep in the canyon.
No comments:
Post a Comment