A few times each year, law firm business consultants at Hildebrandt, International and the Citibank Private Bank issue client advisories that highlight recent market trends and make predictions about the near and long term future of the legal market. The latest advisory is available here.
If you are in the private legal sector (or entering it), you absolutely need to read the whole thing. Some major predictions:
- Cost-cutting measures — including freezing salaries, eliminating bonuses and layoffs — will continue in 2009.
- Firms will need to consider major changes to their traditional business model — like the associate compensation structure and the “billable hour” method of charging clients.
- Demand for legal services will be flat throughout 2009 and broad recovery will not happen until 2010, which means that more law firm layoffs will take place in 2009
Where’s the good news in all of this? Among other things, the Advisory notes that legal services is one of the first sectors to recover in a downturn and that, by emphasizing “countercyclical” practices (including bankruptcy, employment law, and government regulations) the legal industry will be able to sustain itself better than other market sectors.