We’ve released our 2009 report on results from our Peer Monitor firms and we are cautiously optimistic about 2010.  As we’ve noted in some of our other posts, 2009 performance was better than expected for many firms.  Our Peer Monitor firms reported profits that were flat relative to 2008 performance, although of course some firms did better and others didn’t do quite as well as 2008.  Given the expectations that most firms had for a down year, as late as the 3^rd quarter of the year, the strong performance was a good sign.  The Peer Monitor firms drove performance through aggressive cost management and, by year end, improved productivity.

There are several positive signs for 2010.  First, demand for services picked up in the 4^th quarter, notably in the hard hit areas like Capital Markets, Real Estate, and Corporate.   We expect these and other practices like litigation, IP litigation and regulatory practices to continue to improve in 2010.  Second, firms will get the benefit of lower cost structures and increased productivity due to lawyer reductions for the full year rather than a portion of the year.   Overall we expect revenue to be flat to slightly higher in 2010 and profits to be up slightly.  Of course some firms will outperform these predictions.  We think these will be the firms who continue to manage tightly, develop proactive approaches to client needs, and align the firm with the changing market.

We will be issuing our annual client advisory shortly with more predictions for 2010.  Stay tuned!

-- Lisa Smith, Washington DC