The good news from the recent Citi Private Bank's Law Firm Group, Joe Patrice tells us in Abovethelaw, is this: Profit margins are up. That's because revenue grew faster than expenses. So far, the Cravath $180K bump hasn't eaten into PPP.
But the bad news is that much of the boost in profit margins came from jacking up pricing for clients.
That's the ugly part, if we believe in-house decision-makers like Aon's Mark Herrmann. He predicts law firms which don't find cost efficient ways of case management will die. One of his suggestions is bundling similar cases and then bidding on that bundle. The lowest bidder could get the work.
In addition, Patrice notes that demand hasn't picked up. That's an ugly indicator about the future of the legal sector. In addition, productivity declined.
The amazing aspect of the Citi data is that BigLaw can still get away with price increases. Many of us in other kinds of professional services have had our feet held to the fire in billing.