Law firms across the American Midwest saw unparalleled growth beginning in 2019 and continuing into 2020. In fact, cities outside of Chicago saw an average revenue growth that surpassed Chicago’s throughout 2019.
A Surge in Revenue Leading Up to 2020
An analysis conducted by The American Lawyer found that Midwestern law firms in various cities other than Chicago saw a far higher growth rate in 2019 than firms located in Chicago. The analysis looked at growth across a wide range of firms, including 25 Am Law 200 firms located in the Midwest.
Seven of the Am Law 200 firms, including Ice Miller, Barnes & Thornburg, and Polsinelli, reported earning double-digit gains that year. They experienced more growth than the average 5% that the Am Law 200 saw across the country. On average, Midwestern firms experienced a growth of 7.76% in 2019, making it a landmark year for many firms in the region.
Early in 2020, Citi Private Bank’s law firm supported the data with another analysis. Their study confirmed that law firms throughout the Midwest outperformed Chicago-based firms in 2019 when it came to finances, even though Chicago is ordinarily the region’s primary commercial hub.
More Mergers Leads to Increased Financial Success
Throughout the Midwest, the country saw numerous law merger announcements in 2019, more than in any other region. Those mergers went into effect as of 2020. The mergers are likely to drive more growth for firms outside of Chicago, particularly as they involved law firms both in the Midwest and beyond to combine markets in different areas.
Many firms with reduced revenue were able to see increases in revenue by partnering with other firms, helping contribute to the health of the law firm market in the Midwest.
Another factor that helped contribute to many law firms’ success was the areas in which they practiced. Law firms branching out to multiple practice areas are more likely to see more success as they take on clients with different legal needs. For instance, a firm focusing on one practice area, like workers’ compensation, is less likely to see as much success as a firm that also handles personal injury, auto accident, and other cases.
Pulling Out of a Difficult Recession
The COVID-19 pandemic led to difficulties for many businesses in 2020, but the successes that many law firms in the Midwest experienced could help keep them afloat as they reel from a recession. While many other businesses are struggling to get back on their feet and are likely to continue struggling for some time, law firms that experienced more success before the pandemic are likely to thrive in comparison.
Lawyers in Illinois and other states in the Midwest have the chance to succeed even more than firms in Chicago that may not have performed as well before the pandemic. Even after furloughing employees who couldn’t work remotely, the report from The American Lawyer determined that many law firms that did well the year before are still set to flourish. Over time, firms that have taken steps to prepare their budgets are likely to continue to do well in an otherwise difficult environment.