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American law firms hit by poor first quarter

Posted by: Laurence Simons 28/05/13

Possibly my view of American law firms has been coloured by shlocky serialised television dramas, but they always seem like beacons of profitability and excitement to me, full of men running around in expensive suits drinking coffee and shouting at each other, then lighting their cigars with banknotes.

Unfortunately for lawyers considering a move to the States, however, this rose-tinted view of the US law market is not completely accurate. While salaries remain relatively high for top lawyers in the country, recent first quarter results suggest that the market may be enduring something of a slump.

Citi Private Bank's report claimed that the surge in demand and collections during the last quarter of 2012, while welcome at the time, has robbed the first quarter of 2013 of a 'running start' - meaning that many firms have begun the year slowly.

John Wilmouth, senior client advisor at the bank, admitted in an American Lawyer column that it is hard not to dwell on the 3.3 per cent drop in demand recorded by the survey, despite the fact that the first quarter is not necessarily an accurate indicator of what lies ahead for the coming nine months.

"If demand does indeed pick up, however modestly, as signs of life in the economy would seem to indicate and as law firm leaders have told us they believe will happen, then the legal industry should be in for a better year than these first-quarter results suggest," he claimed, panglossianly.

Interestingly, firms more focused on domestic operations performed better than their counterparts with major shareholdings in international law - possibly indicating that the slump in the US has been mirrored by similar problems in core markets like the UK and Europe.

However, Mr Wilmouth predicted that global companies appear to be better-positioned for growth over the course of the year, despite their poor show in Q1.