What's the 'State of the Legal Market'? It's Not Pretty: Report
How's the legal market doing? Georgetown Law's Center for the Study of the Legal Profession released a report Tuesday entitled "Report on the State of the Legal Market" in conjunction with Thomson Reuters Peer Monitor. (FindLaw is also part of Thomson Reuters.)
To put it bluntly, things aren't good for the old guard. The traditional law firm model seems to be working for the toniest of the tony firms, but that's only because they make so much money. The Top 100 firms as a whole, however, are still facing the results of the 2008 recession, as the legal marketing becomes more fragmented, work moves in-house, and basically, the "10 jillion practice area corporate law firm" looks like its once-guaranteed fortunes are in question.
Legal Work Is Moving In-House
We've known this for a while, but the report makes it pretty clear that, once businesses started bringing legal work in-house during the recession, they got used it. Business spending on legal services dropped a whopping 25.8 percent between 2004 and 2014.
The report posits that this isn't a trend that's going away now that the economy has (more or less) recovered: 43 percent of Chief Legal Officers who responded to a 2014 Altman Weil Survey said they intended to increase their in-house legal staff.
Litigation Is Taking a Downward Turn
Since 2004, litigation at Am Law 100 firms has actually decreased 1.2 percent per year. This trend is likely the result of the increased cost of litigation, including e-discovery, says the report. The amount of e-discovery work means that clients, or law firms, or both, are probably farming out the document review work to contractors or e-discovery specialists rather than doing it in-house. The use of e-discovery could also mean that clients choose to forego its costs altogether by not engaging in litigation as much as they used to.
Do We Have to Change?
Partners know that all this change is happening, says the report, but they either won't do anything about it or don't feel that anything can be done about it. Only 13 percent of respondents to the Altman Weil Survey said they had "high confidence in their firms' ability to keep pace with the changes in the marketplace."
And why not? Law firms have operated more or less than same way for 50 or so years. It's hard to turn a cruise liner.
The "Report on the State of the Legal Market" doesn't really offer any suggestions for how law firms might get their butts into gear, but the message is clear: If they don't, they might find themselves out of business, the fate of several of the tippity-top firms since 2008. To put it more ominously, no one is safe.
Related Resources:
- The Eight Most Crushing Law Firm Implosions in the Nation's History (Business Insider)
- 3 Predictions For The Legal Profession in 2015 (Above the Law)
- 5 Reasons 2015 Will Be a Better Year for Lawyers (FindLaw's Greedy Associates)
- The LLLTs Are Coming: Should Lawyers Be Afraid? (FindLaw's Greedy Associates)
