Law firms in Washington outperformed their counterparts in other U.S. regions in terms of revenue, demand for their work and productivity, according to a quarterly report released by Citi Private Bank Law Firm Watch this month.

During the first three months of 2014, D.C. firms saw 6 percent growth in revenue (compared with 4.3 percent across all regions), 1.6 percent growth in demand (compared with 1 percent for all regions) and 3.8 percent growth in productivity (compared with 1.1 percent for all regions), compared with the first three months of 2013. Productivity is measured in the number of hours that lawyers bill.

The report surveyed 177 law firms, including 15 headquartered in the D.C. area. The firms were spread across 11 U.S. regions, including New York City, Chicago, Northern and Southern California, the Northeast, the Southeast and Washington.

“As a legal market, D.C. has been one of the primary locations to benefit from the recovery,” said Brent Smith, a director at Citi. “When we look at the practice areas that are showing the most strength, regulatory continues to be among the top. Washington is one of the locations that would benefit from that.”

Still, Washington firms are being cautious. This was the only region where law firms cut back on expenses during the first quarter of 2014, according to the survey. The dip was slight, just 0.6 percent compared to the first quarter of 2013, but indicates that while firms here are seeing decent growth in revenue, they are spending more conservatively. The data reflects the anecdotal trend of law firms in Washington scaling back on their real estate costs, their second-highest expense after people.

D.C. law firms “are benefiting with nice increase in revenue, but aren’t using that opportunity to start opening up their pocketbooks again,” Smith said. “They’re retrenching, it seems, trying to find ways to be more efficient.”

D.C. firms also shrank in manpower, reporting a 1.4 percent drop in overall lawyers and a 1.6 percent drop in equity partners. D.C. was one of only two regions (the other was the Northeast, which includes Northeastern cities minus New York City and cities in Pennsylvania) that saw drops in both overall lawyers and equity partners. On average, all regions saw 0.7 percent growth in overall lawyers and remained unchanged in equity partners.

Law firms raise record $4M for legal services

Forty-three law firms have contributed a collective $4 million dollars to legal services providers in the District, through a program spearheaded by the D.C. Access to Justice Commission.

The program, called Raising the Bar, asks law firms to set aside a portion of revenue from their District office — between 0.075 and 0.11 percent — for legal services providers. In 2011, the first year of the program, 23 law firms donated a total of $3 million. Participation and contributions from law firms have both risen steadily since then. In 2012, 36 firms donated nearly $3.6 million. This year’s contributions marked a high point in both the number of participating law firms, and the amount raised.

In addition, since joining the campaign, eight firms have upped their percentage of giving, said Jess Rosenbaum, executive director of the D.C. Access to Justice Commission.

Rosenbaum said Raising the Bar is more crucial than ever because another important source of funding for legal services providers has declined. D.C. legal aid groups receive some funding from the Interest on Lawyers Trust Accounts program, or IOLTA, which pools the interest generated from client funds being held by D.C. lawyers and distributes the money to civil legal services providers in the District. Funding from IOLTA took a major hit after 2008 when interest rates fell in the wake of the financial crisis. Banks that had previously offered up to 4 percent interest slashed those rates to 0.25 percent, in step with movement in the federal funds target rate.