Expenses up at Big Law; Ahead of Revenue Gains

The balance of this year could prove to be rough going for Big Law. According to a CITI study/analyses cited in the article:

"Building on the positive signs we started to see during the first quarter of 2011, demand and rates were even stronger at the midyear point, while revenue (cash collections) held steady throughout the first six months."

"[B]ut we have seen expenses grow so quickly that they are now increasing at a faster rate than revenue, putting a squeeze on profit margins...[w]hile it’s hard to forecast what the impact of today's conditions will be on law firms, we believe it could disrupt law firm work pipelines and deal flow, at least in the short term."

http://amlawdaily.typepad.com/amlawdaily/2011/09/citis-midyear.html