Law Firm Outlook for 2006?

Well, it’s a mixture of good news & cautionary tales, according to a survey by the Law Firm Group at The Citigroup Private Bank:

"For law firms, 2005 is proving to be a Jekyll-and-Hyde kind of year. After a robust 2004, firms posted lukewarm results for the first half of 2005….  However, business has picked up significantly in the second half. The net effect is a year that will likely fall just shy of 2004’s results, but augurs for a strong start to 2006."

[snip]

"Even though business looks good for the start of 2006, especially if deal flow stays strong, firms face a number of challenges going forward. They will have to contend with heightened pressure on associate compensation, particularly salaries, which have remained virtually flat since 2000."

[snip]

"We continue to urge firms to hold the line on salary increases while rewarding strong performance with bonuses, which gives firms more flexibility in managing financial ups and downs. Continued expansion, especially into China, and upgrades of professional support and infrastructure will also add to expenses." [emphasis added]

Definitely worth reading the entire article for more specifics concerning small, medium, & large firms as well as comparisons between litigation & corporate practices…..

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