A study of early financial results reported by law firms for 2012 reveals that last year produced very similar results to 2011, with nearly identical increases in both revenues and profits per partner. A study of 101 firms indicates that collectively, those firms increased revenues by 4.01 percent and profits per partner by 4.13 percent in 2012. A similar group of firms reported increases in 2011 of 4.52 percent in revenue and 3.87 percent in profits per equity partner.
While year-to-year fluctuations generally make it difficult to draw any particular conclusions concerning one year, a study of results over the past five years is more revealing. In particular, our study found that firms which underperformed the market during 2007-11 were more likely to have off years again in 2012. For example, of the 26 firms that reported a decrease in profits per equity partner from 2007 to 2011, 11 reported a further decrease in 2012, with another holding steady. Overall, those 26 firms reported an aggregated increase in profits per equity partner of just 2.25 percent.
Similar results were reported with regard to revenues. Of the 24 firms that reported in decrease in revenues from 2007 and 2011, 10 either reported a further decrease in revenue or had revenues stay the same. The aggregated increase in revenue of those firms was just 1.61 percent.
For a chart listing each firm’s reported results for 2007, 2011, and 2012, please contact Steve Nelson at snelson@tmg-dc.com.
TMG’s Take is a regular e-mail advisory produced by The McCormick Group. The company’s Legal, Government Affairs, and Law Firm Management groups combine the expertise of more than 15 Consultants to help law firms fulfill all of their lawyer and administrative recruiting needs. TMG’s Take covers topics across the spectrum of law firm management, including associate and partner compensation, growth strategies, marketing and business development, operations and facilities management, finance and accounting, professional development, and technology. Please direct all inquiries to Steve Nelson, Managing Principal at (703) 841-1700 or snelson@tmg-dc.com.
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