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LAW FIRM GROUP
December 5, 2024
mins
2025 Citi Hildebrandt Client Advisory
December 5, 2024
mins
SUMMARY
Citi Global Wealth at Work, Law Firm Group assesses key law firm industry trends for 2025, such as growth opportunities and challenges, adoption of Generative AI and growth and operational efficiency trends to watch.
The positive outlook anticipated in last year’s report did indeed materialize in 2024, with very strong demand and revenue growth seen through the first nine months of the year.
Looking ahead to 2025 – and beyond – there is good reason for law firms to be optimistic. It’s clear that 2024 has been a year of improving demand. And, with the interest rate cuts we have seen in the second half of this year projected to continue in 2025, we expect to see positive momentum across a number of areas. These include M&A, corporate and transactional activity, alongside the ongoing success of practices that drove demand in 2024 – such as litigation, regulatory (particularly anti-trust), funds/investment management and bankruptcy and restructuring.
Gen AI was top of mind in many of our conversations with law firm leaders throughout 2024, and we expect this to continue through 2025 and beyond. In the 2024 Citi Law Firm Leaders Survey, we asked large firms what key lessons they have learned with another year of this rapidly developing area under their belts.
The continued growth and reshaping of leverage, equity partner growth, and managing income partner growth have been consistent trends in this industry for many years, and we expect this to continue.
We will see firms focus their attention on introducing greater efficiencies in the delivery of legal services and the operation of their businesses. Expense management and making adjustments to professional staff leverage models and office space will continue to be important. We anticipate a clear shift toward technology investment and improving collections and realization as the top operational efficiency priorities in the coming year.
We expect a strong year-end to 2024, outperforming 2023. We believe that the law firm industry is stable, and we are optimistic about 2025. In the year ahead, we will likely see continued strength in the practice areas that drove activity in 2024. We also anticipate the return of M&A, corporate and transactional work broadly across all segments, as interest rates continue to fall and market conditions improve. We expect that 2025 will be a very good year for law firms.
