2016 Financial overview for middle market law firms
RSM US LLP recently reached out to law firm clients and leaders around the United States, gathering observations and experiences on financial parameters affecting their firms. Barry Rosenthal, RSM national practice leader for law firm services, used that information, along with his experience in the legal field to outline key issues middle market law firms should consider when they are looking at the financial health of their firms. Findings were categorized by law firm practices as less than 50 attorneys (<50) and more than 50 attorneys (>50) in the illustrations below. Observations were collected in 2016 and reflect 2014-2015 financials. Key findings focused on:
- Billable hours
- Net income as a percentage of fees
As discerning clients challenge higher billing rates, compensation and operating costs rise, and demand for legal service is sluggish due to volatile economic conditions, law firms may be facing problematic times in the next two to three years. Savvy firms will look for ways to control operating costs and rising compensation, optimize billable hours and revenue cycle, tighten margins, stay on pace with growing technology needs, and in some instances, consolidate practice areas and workforces, if needed. To learn more, read the overview.
Knowing where your law firm stands in the market can be vital. RSM provides the benchmarks you need to make informed financial decisions.