Building A Network and Personal Brand Early In Your Career

Good advice in today’s Legal Intelligencer (via on the importance of investing in relationships, expanding your network and developing a personal brand at the beginning of your legal career — even before you graduate.

Demand For Legal Services Remained Flat in Q-1 2010

The well-known legal business consulting firm Hildebrandt Baker Robbins just published a report of its Peer Monitor Index, which includes information about key law firm business metrics for January – March of 2010.

You can read a summary of the report here.  You can read the whole thing here.   

Among other things, the report concludes that, on average, demand for legal services (measured by billable hours) for the first quarter of 2010 was flat.  Also, while demand in the Silicon Valley market increased by 1%, it decreased by 5% in SF and LA. 

We’ve blogged about the Peer Monitor system before, but to refresh you , it is a service that allows law firms to access their peers’ financial data (in the aggregate) in exchange for supplying their own data to the system for others to access (on a normalized and aggregated basis).  There are 35 Am Law 100 firms, 35 Am Law 200 firms and 30 NLJ 250 firms in the system.  You can find more information about the Peer Monitor system here.

Some Interesting Financial Info About Largest CA Firms

The Recorder recently did a story about the 2009 financial results of the firms on their list of the state’s 25 largest law firms.  You can check the story out here.

For the Recorder 25 list, click here.

Podcast Predicting Economic Prospects For Firms in 2010

Thought you might be interested in this short (about 6 min.) interview with the person who runs the Peer Monitor. 

You can access the podcast at Thomson Reuter’s Legal Current blog here.  (Hat tip: legal industry consultant Hildebrandt’s blog).    

FYI — We’ve blogged about the extremely helpful Peer Monitor Index before here and here.  The Peer Monitor system is essentially a service that allows law firms to access their peers’ financial data (in the aggregate) in exchange for supplying their own data to the system for others to access (on a normalized and aggregated basis).  There are 35 Am Law 100 firms, 35 Am Law 200 firms and 30 NLJ 250 firms in the system.


The Changing Associate Recruiting and Compensation Models

Last Thursday’s New York Times has an interesting article about how firms are developing new ways to hire, train, promote and compensate associates in light of “recessionary pricing pressures.”

In addition, a recent e-newsletter article (consisting of comments from a senior advisor with Blaqwell, a prominent legal industry consulting firm) in the Practicing Law Institute (PLI) expressed consistent themes.   

Reflections on the “Mommy Track”

Interesting reflection about the “work-life” balance issue (which we used to hear more about prior to the Great Recession) in Slate.  Its written by a 1993 Harvard Law School graduate who did both the “fast” track and the “Mommy Track.”  Those are her terms, though part of her article asks whether there aren’t better ones.

Among other things, she reports that the majority of the women in her class at HLS have stepped off the “fast” track, but as many as a third of them have part-time, flexible job arrangements that are working for them. 

Legal Market Experts Predict Another Flat Year

Hildebrandt Baker Robbins and  Citigroup’s Citi Private Bank division just issued a joint Client Advisory, which among other things, predicts that revenue (and profits) at large law firms will be flat to ever so slightly up for 2010.

The report also identifies a number of trends observed in 2009.

Hildebrandt is one of the largest and best known business consultancies to large law firms.  Citibank’s Private Bank provides financial services to some of the largest firms in the country.  We’ve blogged about their excellent client advisory reports in the past (e.g., here). 

You should read the entire report, which you can find here.  Also, the American Lawyer’s AmLaw Daily published a helpful summary here.

Among some of its key general findings are:

  • Its no surprise that 2009 was a horrible year for law firms, but the report calls it “the worst . . . in at least the past half century.”
  • there were some hopeful signs in Q4 2009, but there is “little prospect of a robust recovery” for 2010 and, when the recovery does begin, it will be “quite gradual.”
  • over the next several years, the “fundamental economics of legal practice” will be re-evaluated and significantly changed. 

Some key specific observations and predictions include:

  • Demand for large law firm services fell 4% in 2009 (contrasted with the period from 2001-07 during which demand increased by 4% each year).
  • At the same time, clients increased pressure to obtain discounts, fee caps, and alternative fee arrangements, which caused realization rates to decline.
  • Collectively, 5,259 large law firm lawyers were laid off in 2009, which amounts to 4% of the total NLJ 250 lawyer population and nearly 9% of the total associate population; in 2008, these firms increased their lawyer population by 4%
  • In addition to payroll, firms did quite a bit of cutting on the expense side (a 5.6% reduction in 2009, which contrasts with 9-10% yearly increases in prior years back to 2001).
  • Q4 of 2009 showed some signs that the market has bottomed out (M&A, general corporate, tax, capital markets, and real estate practices showed some improvement)
  • Profits per equity partner (PPP) were essentially flat in 2009, which contrasts with a 3% drop in 2008 and 11.5% (average) yearly increases between 2001-07.
  • Because the recovery will be “quite gradual” and because of expected continued pressures to keep fees low, “law firm revenues will be flat to only slightly higher for 2010.”
  • Law firms will need to continue cutting expenses — one of the only places left is among its partners — they need to thin their non-equity partner ranks and weed out marginally performing equity partners
  • PPP in 2010 will be flat to up by, at most, 5% on average
  • The first 100 firms on the AmLaw 200 list of largest firms will continue to be harder hit by the economy than the second 100 firms and some regional firms

Early Results Show 2009 Stable Revenues/Profits for BIGLAW

The AmLaw Daily published two recent articles here (focussing on California firms) and here (providing the national picture) about how large law firms finished the year financially.   

The upshot is that most firms were either flat or up or down by a few percentage points, which is better than many experts predicted earlier in 2009.  The result is attributed mainly to firm cost-cutting measures (the lay-offs; starting associate salary reductions, etc.)  Read both pieces to get the full perspective.


More On Fundamental Changes To the BIGLAW Business Model

The American Lawyer published the results of its annual Law Firm Leaders Survey.  The details are available by subscription only, but they are accompanied by an interesting article from AmLaw’s publisher, which you can find here.   

Among the key findings: 

A majority of the heads of the 142 of the AmLaw 200 law firms reported “seeing a ‘fundamental shift’ in the legal marketplace.”

80% used flat fee arrangements in 2009

75% had collected at least one incentive or success fee

25% outsourced some of their work

If you are an AmLaw subscriber, you can see the complete survey results and the feature story here.   CDO (and the Main Library) should have the print version in its library by next week.