How Midsize Firms Might Need to Adjust to the Changing Legal Market

A thought-provoking blog post from law firm management consultant Hildebrandt.

Last year, we linked to a couple of articles (here and here) reporting that (at least some) midsize firms (100-300 attorneys) appeared to be weathering the economic downturn better than their Biglaw counterparts.

However, according to the Hildebrandt blogger (and we agree!), just as large law firms have had to adapt their business model to new economic realities, midsize firms have to make some big changes as well.  Hildebrandt’s blog post suggests what those changes may look like.    

Passage of Dodd-Frank Bill Will Increase SEC Enforcement Activities

Today’s Recorder contains an article written by a partner in Covington & Burling’s SF office who predicts that the SEC will ramp up its enforcement activities as a result of new powers conferred by the  Dodd-Frank Wall Street Reform and Consumer Protection Act. 

Unfortunately, the article is password-protected, so you will need to get the print version either in the CDO or in the main library.

But, the career-related take-away for us is that we can expect the SEC to be busier than ever (as well as the law firms that do SEC enforcement work and/or those that have securities litigation practices and/or those that represent financial services clients).

As the article concludes:

“Dodd-Frank has ramped up the SEC’s enforcement mandates to a level greater than at any time since the agency was created. Its jurisdictional reach is broader, the number of causes of action it can bring has increased, and its available remedies have expanded. Public companies, regulated entities and hedge funds, as well as their officers, directors and employees, should prepare for a significant increase in SEC enforcement activity.”    

Legal Employer Survey: Some Expect An Increase in Hiring Levels

A brief article appearing in the Recorder and on the Legal Pad blog (via reports on a survey commissioned by one of the major legal staffing companies, Robert Half International.   

100 lawyers (at firms with 20 or more employees) and 100 in-house lawyers (at companies with at least 1000 employees) were surveyed.

59% expect no change in the number of full-time legal personnel at their employer in the 4th quarter of 2010.  29% expect an increase (though the survey apparently did not inquire into the extent of the expected increase).  6% expect a decrease. 

New System of Law Firm Rankings

Two commercial enterprises, U.S. News and Best Lawyers, have released a set of rankings of over 8,000 law firms.   Rather than assigning a numerical rank to each, they divide specific practice areas of firms into one of 3 tiers.  They actually assign each practice area both a local and a national tier ranking.  81 different practice areas are included in the rankings. 

The publishers claim to have surveyed more than 9,000 clients and just about the same number of attorneys. They also apparently factored in the 3.1 million individual attorney evaluations that the Best Lawyers enterprise compiled.  They also claim to have considered: attorney experience, number of clients, billing ranges, the number of matters, pro bono work, and diversity also counted.

This set of rankings follows the recent release of a similar commercial enterprise called Chambers Associate (published by Chambers and Partners).  These rankings and surveys, along with other more established ones like The Vault Reports Guide to America’s Top 100 Law Firms and the American Lawyer surveys — (see Surveys and Rankings section of the left side bar menu) ought to be viewed with a healthy amount of circumspection. 

In making you aware of this potential new research resource, we are not offering an endorsement of it nor are we intending to vouch for ts methods or conclusions.  We encourage you to examine its particular methodology and think critically about its conclusions — just as you would with any other survey or rankings list. 

One other thing to keep in mind is that the U.S. News/Best Lawyers rankings are designed for clients to determine which firms to hire; it was not designed to inform law graduates about the best places to work.   
We continue to believe that the best resource for deciding the best place for you to work (summer and beyond) is “human intelligence” — talking to one or more CDO attorney-counselors, lawyers who are practicing in the areas in which you want to work, 3Ls or classmates who worked at firms this past summer, etc. 

Berkeley Law students can find other students’ prior summer evaluations (along with their contact information) in the b-Line (click on the “Summer Evaluations” shortcut from the b-Line homepage).  

Networking and Emotional Intelligence More Important Than Ever

There’s some great advice in a recent posting in by Ari Kaplan, a former BIGLAW attorney who wrote a great book on networking (“The Opportunity Maker: Strategies for Inspiring Your Legal Career Through Creative Networking and Business Development.”)

The posting stresses the importance of emotional intelligence (EI) to legal employers.  In a recovering market, they will be focussing on candidates who exhibit flexibility, resiliency, creativity, empathy, self-awareness, self-control, optimism, confidence, self-directedness, and determination despite setbacks.  Persons with high EIQ display good judgment and get along well with others.  (For more on EI, you should check out one or more of Daniel Goleman’s books on the subject.)   

You really should read the Ari Kaplan’s entire post, but here are a couple of key quotes:

“Individuals who demonstrate thoughtfulness about the needs of an organization’s clients, the institution’s goals and the state of the legal industry will distinguish themselves.”

“[W]hen you meet someone, add a follow-up call or e-mail to your electronic calendar. For instance, if during a conversation someone shares an important court date, a key client meeting or a personal event, set a reminder to ask him or her about it in a week, a month or even longer, depending on the appropriate timing. Every interface is an opportunity.” (emphasis added)

More Data Re: Firm Financial Performance Jan. to June 2010

The American Lawyer (via has a piece (ominously titled “Law Firms ‘Shrinking Toward Profit Growth'”) reporting on midyear data gathered by Citibank’s Private Banking Group.

We’ve blogged about Citibank’s Law Firm Group before (here).  The source of their data was:  87 Am Law 100 firms, 50 Second Hundred firms, and 50 other firms.

Citibank’s latest findings based on their data gathering are consistent with those recently reported by Hildebrandt (which we blogged about here).   Among the findings:  1) revenues were flat; 2) demand was slightly lower than the first six months of last year; and 3) net income and profit was up, but this was mainly due to reductions in expenses (in particular reductions in attorney headcount). 

You should read the whole American Lawyer article for better understanding of how firms performed financially during the first half of 2010.


NLJ’s Midsize “Hot List”

The National Law Journal recently released its 2010 list of 20 midsize firms (i.e., firms with between 50 and 150 lawyers) that “have thrived amid the downturn … [and]  experienced a string of successes and that showed innovative ways to run their operations despite the economy.” 

UPDATE:  The article apparently can only be accessed by NLJ “premium subscribers.”  We have a hard copy of the 7/12/10 National Law Journal in the CDO, which you can review.  Also, the online publication JD Journal has a page with a series of links to the websites of the 20 law firm on the list from which you can piece together the substance of the NLJ article.  Feel free to contact me if you have any questions.

Temporary Downturn or “Fundamental Reordering” Of The Legal Industry

Great article in NALP’s most recent bulletin addressing the ongoing debate as to whether the changes we are experiencing in law firm hiring patterns are merely temporary (and will revert to what they were when the economy improves) or whether they are reflective of a burgeoning fundamental restructuring of the way law firms do business.

The author, Bill Henderson, is a law professor at the University whose scholarship focuses on the empirical analysis of legal labor markets and the development of human capital for legal service providers.

He takes the position that the legal industry is, in fact, beginning to undergo a “fundamental reordering” that will have profound effects not only on law firms, but law schools as well.