The Wells Fargo Legal Specialty Group Nine-Month 2024 Survey is out and the word from Biglaw is business is good — like firms are “pinching themselves” good, according to Owen Burman, a senior consultant for the group. This growth is largely on the back of corporate practices, and is more pronounced at the tippy top of the industry. Burman said of transactional practices, they “remain the primary driver of this year’s performance and appear to be broadening out to the middle market, benefiting firms across all size tiers.”
For all firms reporting, revenue rose 12.8% through the first nine months of 2024, up from 11.4% for the first six months of 2024 and 4.6% for the comparable nine-month period of 2023, reaching growth rates only surpassed in 2021 of 14.4%. Revenue growth was strongest for the Am Law 1-50, up 14.6%, while firms in the Am Law Second Fifty and Am Law Second Hundred trailed, albeit with solid growth of 9.3% and 10.1%, respectively
Though there was an uptick in demand (3.7%) and attorney productivity (up 2.4% to 1,583 hours per lawyer), the big driver of those impressive revenue numbers is increasing the billable rates. Overall, the average standard rate is up 9.0% year-over-year. The top 50 firms increased rates an average of 10%, with the other tiers raising rates an average of 7%.
All of which seems to line up for a pretty payday — for equity partners.
Although the seasonality of collections and cash-basis reporting can affect the numbers, Wells Fargo found profits per equity partner up 23.4% among Am Law 50 firms; 16.4% for the Second 50 and 18.1% for the Second Hundred, combining for an industrywide average of 21.5%. Net income figures are subject to the same caveat, but for the same segments increased by 24.5%, 16.7% and 18.8%, respectively.
Burman said he doesn’t anticipate bottom-line growth to eclipse 20% when all is said and done in 2024, but “mid- to high-teens is my expectation” by year-end.
With financials this impressive, firms have very little excuse to *not* match the year-end and special bonuses making their way through Biglaw.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @[email protected].
