Recent Citibank Survey: Cause for Optimism or Caution?
Citibank just published the results of its annual survey of the levels of confidence by managing partners for the coming year and reported that the majority felt positive Interesting that neither Dan dePetrio, the voluble head of the law firm group at Citibank, who always has something wise to add to the public discourse on law firm economics, uncharacteristically had no reported comment on the survey results. There may in fact be some reason for optimism, but that optimism must be based on some realistic planning, based on an understanding of the past and careful methodical planning for a very tough 2010. Supply still exceeds demand and most corporate clients I speak to anticipate a reduction of 5 – 20% of fees they will spend on outside counsel. These MP’s still all don’t really know what the result of “alternative billing” arrangements and the death of the hourly rate are going to be. Almost nobody has hired risk managers to assess what risks the firms are undertaking in fixed fee or alternative billing arrangements. Remember, Billy Tyne, the captain of the ship Andrea Gail, the boat featured in “The Perfect Storm” book and movie, the former heads of Thacher Proffitt, Heller Ehrmann , Thelen, Coudert and so many other firms that are among the trash heap of firms that once were, all voiced optimism that they had weathered the storm and everything would now be fine. Assuredly, had they had a better view of what lay on the horizon and been more realistic, everything may well have turned out fine. The world won’t come to an end, but there are definitely stormy seas still ahead.