Law Firms
Law Firm Consultant Issues ‘Grimmest Ever’ Forecast
Posted Oct 27, 2008 1:46 PM CST
By Martha Neil
The situation likely will get worse for many law firms struggling to cope with the economic firestorm before it gets better, a well-known legal consultant predicts.
In a Hildebrandt International client advisory described by director James Jones as "the grimmest one I've ever written," he says layoffs can be expected at a number of law firms, reports the National Law Journal.
Joyce also predicts flat law firm profits, at best, and a drop of as much as 15 percent in profits at some partnerships. "We see 2009 being a tough year," he tells the legal publication. At the earliest, the economy won't begin to turn around until the end of the year, he says.
There is a little good news, however: countercyclical practices, such as bankruptcy and litigation, as well as regulatory work, are starting to pick up.
Related coverage:
ABAJournal.com: "Legal Market Predictions: Double the Extreme"
AmLaw Daily: "Welcome to the Future: A Tale of Two Cities"
ABAJournal.com: "Will 2008 Be Law Firms’ Worst Year Since Early 1990s?"
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Comments
r
Oct 31, 2008 5:58 AM CST
Good. Maybe some of the fat cats will be weeded out so the real workers can get their due like I wasn’t years ago.
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m
Oct 31, 2008 6:29 AM CST
litigation is starting to pick up??? is that why CC laid off litigation associates??? all I speak with across the country say litigation is going down ....
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donald
Oct 31, 2008 7:24 AM CST
I’ve seen employment litigation picking up quite a bit. Perhaps it’s either the firm, the specific area of litigation, or something else that caused Clifford Chance to dump deadweight.
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Hadley V. Baxendale
Oct 31, 2008 7:27 AM CST
Commercial litigation goes up in a down cycle because people are more contentious, and will fight over fewer dollars than when times are good. Many of those who find a reason not to pay or perform are really just avoiding payment and finding excuses. That being said, the BIGLAW litigation may thin out, or the cases won’t support the exhorbitant billing. At a mid-sized general commercial firm there will be lots to do, especially when the big companies realize they are being taken by BIGLAW. That is the legal market for those who can’t get a job at, or want to leave, the sweatshops.
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kd
Oct 31, 2008 7:29 AM CST
#3, agree. People need to stop touting the usual wisdom that “litigation is recession resistant” and instead actually look around at what’s happening. That said, I’m predicting that if Obama makes it in the White House, a lot of legislation should pass over the coming years to make our great United States litigator’s heaven for decades to come.
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vote obama
Oct 31, 2008 8:36 AM CST
vote obama - obama supports unionizing law firms support staff so the big greedy corporate partners can’t lay off workers….
vote obama = unionize your mega law firm
it is time u got some of the rich partners millions
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HVB
Oct 31, 2008 10:35 AM CST
So, “vote obama” you would advocate (and legislate) the policy “From each accordnnig to his ability; to each according to his needs?”
FN to Ellen: The “his” is both grammatically and historically correct. Before you get your panties in a wad, it would apply to girls, too.
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DSE
Oct 31, 2008 11:01 AM CST
Litigation is not picking up as much as it traditionally does because it is so expensive and disruptive. And I’m not just talking about attorney’s fees. It is also electronic discovery - the bane of modern litigation. EDiscovery obligations are very expensive and very disruptive. They disput a business from top to bottom as freeze-hold memos go out, servers are imaged, and lawyer’s and consultants scour laptops, cell-phones, home devices and back up tapes. LAwuers then review millions of emails and docuemnts. It’s the new gotcha in litigation—if your search of millions of documents and emails miss anything, your pleadings and defenses can be stricken.
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JDT
Oct 31, 2008 11:23 AM CST
We had a partners’ meeting this morning. We’re both too busy to fire the other or quit. And since we’re both busy we need our 2 assistants on the payroll as well. Maybe little dinky firms like us are better poised to weather hard times? We’re used to discounting fees, folks who don’t - or can’t - pay, and keeping expectations in line with reality.
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someone you do not know
Oct 31, 2008 12:43 PM CST
One trend that’s usually noted by state prosecutors and criminal defense attorneys is that “business” usually picks up a little more when the economy starts to slump
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Kenneth G. Rush
Oct 31, 2008 2:26 PM CST
It does seem to me that part of the problem here is that nobody is willing to take less in the way of actual in pocket income during a down year. If they were in general practice for instance or solo practice, they would certainly have to cut back a little. Just because they are in a large lawfirm they fire partners and let associates go, rather than reduce the “take” for everybody. What do you call that?? Try stupidity - greed - unfeeling idiocy. It certainly does feed into the current media feeding frenzy as to a recession.
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Tim Schranck
Oct 31, 2008 3:47 PM CST
For my Labor and Employment Law practice, I believe 2009 is going to be the best year in a long time., Three points: (1) With the recent amendments to the ADA overturning important Supreme Court precedents, employment litigation should tick up dramatically in 09. (2)Assuming Obama wins on Tuesday with democratic majorities in both the House and Senate, I predict that the longstanding downward trend in the number of union employees in the U.S. will do a quick reverse and we will see the a tremendous upshot in union activity. It should be a good time to have traditional labor law experience since most “labor and employment” attorneys have never seen a ULP charge much less run a winning union election campaign for an employer. (3) Covenant not to compete and trade secret work seems to be fairly steady in good times and bad.
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HVB
Oct 31, 2008 4:12 PM CST
Ken, you’re right and that culture of inflexibility (ie greed) will kill the big firms. However, they are locked in to tremendous costs, but instead of flexing the bottom line as you suggest, they act like partner profit is a fixed cost. Wise management would simply reduce partner percentages, save the whole firm, boost morale, and start looknig for a new career.
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Rocco
Nov 1, 2008 3:45 PM CST
No worries for us at the PD’S Office. Economy in the shitter - and we’re busier.
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Jason
Nov 7, 2008 7:56 AM CST
#12- I agree. We are seeing a big uptick in labor cases over the last qaurter. We expect labor and employment claims to be huge over the next year.
Litigation is still the same here. No uptick yet.
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