Posted Jul 08, 2011 09:15 pm CDT
The legal profession is undergoing a massive structural shift—one that will leave it dramatically transformed in the coming years.
There’s no doubt that the financial crisis beginning late in 2007 was for most lawyers a game-changer, prompting drastic measures as firms laid off thousands of associates, de-equitized partners, and slashed budgets and new hires.
But many hoped—and still do—that the effects of the recession would ebb, and that the profession, which had just witnessed a golden age of prosperity unmatched by any other industry, would re-emerge relatively unscathed.
The golden era is gone, but this is not because the law itself is becoming less relevant. Rather, the sea change reflects an urgent need for better and cheaper legal services that can keep pace with the demands of a rapidly globalizing world. The Great Recession—a catalyst for change—provided an opportunity to re-examine some long-standing assumptions about lawyers and the clients they serve.
Whether BigLaw lawyers, boutique specialists or solo practitioners, U.S. lawyers can expect slower rates of market growth that will only intensify competitive pressures and produce a shakeout of weaker competitors and slimmer profit margins industrywide. Law students will find ever-more-limited opportunity for the big-salary score, but more jobs in legal services outside the big firms. Associates’ paths upward will fade as firms strain to keep profits per partner up by keeping traditional leverage down.
And those who wish to rise above the disruption will have to deal with technology that swallows billable work, a world market that takes the competition international, and a more sophisticated corporate client with vast knowledge available at the click of a mouse.
Click here to read the rest of “Paradigm Shift” from the July issue of the ABA Journal.
Updated at 10:20 p.m. to correct typo.