A survey conducted by the Wells Fargo’s Legal Specialty Group shows a general rise in the rate of expenses that outpaced rising income, leaving profits lagging. Reporting on the survey, the Am Law Daily web site said that in the first half of this year, on average revenue rose by 3 per cent while profits fell by 0.7 per cent. It speculated that a contributing factor could be that firms deferred large expenses to this year to improve balance sheets for 2011.

Cardinal sin

Additionally, the survey indicates that lawyers at top US firms are committing the cardinal sin of the American business law profession by billing less. The report says the number of hours that lawyers are on track to bill for will be 1 per cent down on the average figure for 2011.
Jeff Grossman, national managing director of Legal Speciality Group, told the web site that a rising head count across the board is another contributing factor to firms’ increased costs. ‘Profit is a question mark,’ Mr Grossman remarked. ‘All indicators suggest it’ll be down, but it depends on how firms manage expenses.