Each year, the Benchmarks publication, produced by the ABA Division for Bar Services, offers a wealth of information about bars—from bars themselves, via a nationwide survey. The topics vary from one year to the next; the most recent edition, released in December 2021, is 2021 State and Local Bar Benchmarks: Membership, Administration and Finance.
In the next few issues of Bar Leader, we plan to highlight a few areas of interest within the most recent Benchmarks. In this issue, we start with the bottom line, by looking at a few of the key findings regarding bar finances.
January 14, 2022 Vol. 47, No. 3
2021 Benchmarks Survey spotlight: A quick overview of finance questions and responses
By how much did bars’ budgets increase or decrease since their last fiscal year?
Among state bars—both mandatory and voluntary—most budgets either remained stable or increased or decreased by a fairly small amount. For example:
- 35 percent of mandatory state bars and 25 percent of voluntary state bars said their budgets had remained about the same;
- 27 percent of mandatory state bars and 20 percent of voluntary state bars said their budgets had increased by 1 to 3 percent; and
- 15 percent of mandatory state bars and 30 percent of voluntary state bars said their budgets had decreased by 1 to 3 percent.
One notable exception to this trend is that 12 percent of mandatory state bars said their budgets had decreased by more than 15 percent; only 5 percent of voluntary state bars reported a budget decrease of that size.
The picture looks a little more mixed for local bars: While 23 percent said their budgets had remained about the same and another 10 percent reported an increase of 1 to 3 percent, the majority (58 percent) reported a decrease. Only 6 percent reported a budget cut of more than 15 percent; however, 19 percent reported a decrease of 4 to 8 percent, and another 12 percent said they’d cut their budget by 9 to 15 percent.
What are some reasons for these variances?
When given an opportunity to explain any changes in their budget, here’s what some bars mentioned:
- The pandemic continues to affect travel and in-person meetings, affecting both expenses and revenues.
- A COVID dues credit resulted in a decrease in the budget.
- Anticipating the return of in-person activity at the bar center led to projected increases in both expenses and revenues.
- Income declined because of a decrease in sponsorships.
- Budgets are now rebounding from previous austerity measures, such as staff furloughs and extended short staffing, leading to bigger-than-usual increases.
How have CLE and LRS revenue changed in the past three years?
Possibly reflecting a trend toward offering free or reduced-cost continuing legal education for members, many bars reported a decrease in CLE revenue from 2018 to 2021. This was most notable among voluntary state bars: 50 percent reported a decrease in CLE revenue—25 percent in the 1 to 5 percent range, and another 25 percent with a decrease of 6 percent or more.
Fairly large percentages of bars in all categories saw an increase in their revenue from lawyer referral service. For example:
- 15 percent of mandatory state bars reported an increase of 1 to 5 percent;
- 15 percent of voluntary state bars said their LRS revenue had increased by 6 percent or more; and
- 25 percent of local bars said their LRS revenue had increased by 1 to 5 percent.
There was one marked difference between state and local bars, however: Among state bars (both mandatory and voluntary), there were relatively few reports of decreases to LRS revenue, whereas 12 percent of local bars said their LRS revenue had declined by 1 to 5 percent, and another 16 percent said they’d seen a reduction of 6 percent or more.
Want more detail?
The above was only a snapshot; in the full Benchmarks publication, you’ll find several more finance-related questions and much more detail, such as breakdowns by bar size and information on how specific bars answered particular questions. We’ll give another overview of another topic area in a future issue of Bar Leader, but to be fully informed, make sure to order your copy of Benchmarks.