EIW/FIP (formerly OCIP)

Predictions About the Legal Market in 2009 and Beyond

By Terrence Galligan | Posted on

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.     

Employment Law Work On The Increase

By Terrence Galligan | Posted on

Here’s a link to a recent article talking about how business for employment law practice groups — particularly in the Bay Area — is up. 

Many Small Firms Doing OK in the Downturn

By Terrence Galligan | Posted on

The New York Lawyer profiles some small firm practitioners who are thriving despite the current state of the economy.  The article suggests at least a couple of reasons for this:  first, they are leaner and may be able to provide better value to clients who have become even more cost sensitive.  Second, many have niche practices which are less subject to ebbs and flows in the market.  You can read the article here.

Revenue and Profitability Numbers for Some Bay Area Law Firms

By Terrence Galligan | Posted on

The Recorder surveyed seven of the largest “homegrown” (their phrase) Bay Area law firms and reported some information about where these firms stood at the end of 2008.  The article can be found on the law.com website here.   

Not surprisingly, at most places, the top-line number was up, but profits-per-partner dropped. 

Law Firms Comment on Hiring in a Downturn

By Terrence Galligan | Posted on

Interesting article in the National Law Journal discussing how associate hiring is linked to predictions about the future direction of the economy. 

One large firm’s chairperson reported that they are shooting for the same summer associate hiring target as last year.  The NY office of another has decided to forego on campus recruiting entirely this year.  Both admit to the difficulty in trying to predict their need for associates two years out.  It’s definitely worth a read.       

Sobering Article on the State of the Legal Market

By Terrence Galligan | Posted on

The head of Citibank’s Law Firm Group, which has analyzed trends in the legal industry over the last eight years, has written an excellent, but sobering article about current market dynamics across the industry (large, mid-size and small private firms).

Among other things, he concludes that law firms, which have gotten used to seeing +10% revenue growth over the past eight years, will likely experience no growth in profits this year or even a dip of as much as 10%. (This is a downward revision from Citibank’s projections of just six months ago). At the same time, expenses (nearly a quarter of which consist of associate compensation) have and are likely to remain high. Read the whole thing here.

The 50 Best Law Firms for Women

By Terrence Galligan | Posted on

Working Mother, in conjunction with Flex-Time, a national consulting firm, has published its annual list of the 50 best law firms for women.  

It does not rank the 50, it just lists them alphabetically.

As with any survey or rankings list, it’s important to look at the methodology.  As we understand it, firms with 50 or more lawyers were invited to submit application materials, which were then graded, taking into account information about firms’ workforce profile, family-friendly benefits and policies, flexibility, leadership, compensation, advancement and retention of women.  According to a story about the list in the Recorder, 115 firms applied. 

   

Regional Law Firms — Great Alternative to BIGLAW or Dying Breed — We Report, You Decide

By Terrence Galligan | Posted on

The trend in the large law firm market toward consolidation (growth and expanded coverage through acquisition of small and medium sized firms) has continued over the past year (during which there were 55 U.S. law firm mergers). Recently, the Recorder, the local newspaper of the legal profession, profiled a few firms based here in the Bay Area that have bucked that trend (there are others not mentioned in the article). Who’s right? Are they right/wrong for you? Who knows? I found a reprint of the article on the web here. It raises some interesting issues that I thought would be timely as OCIP approaches.