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www.targetedlegal.com
The Good, The Bad & The Ugly
By Marcus
Ollig
Aside from being the title of my favorite Western, it's apt description of the times in the legal field.
"The gentleman's profession of the law is becoming a vestige of the
past, removed enough from reality to be remembered, like phone booths or fedoras."
New York Times about major law firms, June 15, 2009
It's hard to believe there is any good news—but there is. In conversations
with law firm leaders, corporate executives and attorneys, both locally and nationally,
a more complete picture emerges. It shows we may have hit the bottom of this recession
and that firms are better positioned for the rebound. Also, the difficulties of
the past 18 months have resulted in some profound positive changes in law firm
management.
While there will be more staff and attorney layoffs in 2009, the pace of cuts
should continue to slow toward the end of the third quarter. Economists I trust
and many law firm partners and corporate attorneys I speak to seem to feel that
the stimulus package is starting to free up credit markets, which will spur more
corporate transactions and real estate activity. It is undeniable that the worst
economy since the 1930s has had a severe impact on the legal field. The negative
headlines about layoffs and failing law firms obscure the fact that many practices
and firms are faring reasonably well. A number of law firms are using this time
to make significant positive changes that will improve those firms operationally
for the next generation of lawyers. The following patterns emerged from conversations
with attorneys over the past few months.
Nationally
While this recession has seemingly had a record number of law firm lay-offs, the
most widespread cuts are concentrated in large money center markets or formerly
hot real estate markets. The most affected markets include New York City, Chicago,
the San Francisco Bay Area, Los Angeles and Philadelphia; Minneapolis and Charlotte
(banking concentration); Las Vegas and Phoenix (real estate), etc. There is some
pain in almost all markets, though it seems a matter of degree. The markets listed
have a large concentration of lawyers in practices hardest hit, including Corporate,
M&A, Securities, Banking and Real Estate. We saw those practices start to slow
down last year, even before the larger meltdown in the fall, which accelerated
things tremendously. Firms who have a large presence in these markets, or who
placed large bets expanding in money center markets, expanding internationally
or in the formerly fastest growing real estate markets, are struggling the most.
The Good News
- Confidence among Managing Partners nationwide seems to be up, reversing a
six-month trend according to a Citi
Private Bank Law Watch survey.
- The TED spread, a measure of risk-aversion in the credit markets, has receded
to pre-crisis levels. This, along with the fact that 32 banks have repaid their
TARP funds, should lead to an easing of credit and hopefully more deal activity.
- The economy, while not growing, may have hit bottom. According to the Commerce
Dept., new orders for durable goods climbed for the third time in four months
in May (by 1.8%). Firming of new home prices and some other positive economic
signals may mean we are starting, however slowly, to climb out of this recession.
- Among many clients, litigation activity is gaining momentum, particularly
in bankruptcy, employment, securities and even commercial litigation in general.
As this trend continues, it will hopefully counterbalance the weakness in M&A
and corporate work.
- Firms are getting creative! Alternative billing arrangements, merit-based
pay (versus the old lockstep model for associates) and associate training in both
the practice and rainmaking aspects of the profession are gaining steam. I believe
these will become permanent aspects of law firm life.
Denver / Regional Markets
In places like Denver and other Midwestern or regional markets, diversified firms
have fared best. Read
on for regional and Denver outlooks as well as areas well-positioned for growth.
Read More Articles and learn details about how to find and retain top caliber talent and keep your business in shape.
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July 8, 2009
9AM–4:45PM
Video Replay
The Law of Planning and Conducting Layoffs
Check
COBAR website for pricing and more information
July 24, 2009
9AM–12:25PM
CLE Live Seminar
Economic Crisis Litigation Update
Check
COBAR website for pricing and more information
July 30, 2009
9AM–2:45PM
CLE Live Seminar
Practicing with Professionalism
Check
COBAR website for pricing and more information
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“...You
shouldn't even call yourself a recruiting firm - the level of insight, knowledge
and coaching you provide is so fundamentally superior to the industry as people
perceive it.”
Partner, Denver Law Firm
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COMMERCIAL
LITIGATION PARTNER
Exclusively searching for a Commercial Litigation Partner for well managed Am
Law 200 firm.
For
Discreet Consultation
CORPORATE
PARTNER/GROUP
Exclusively searching for a Corporate Partner/Group for rapidly growing Am Law
100 firm.
For Discreet Consultation
GROWING YOUR FIRM?
We always represent excellent partner level attorneys interested in the right
opportunities. If you are looking to grow your firm or develop r a practice area
please contact Marcus Ollig at 303-825-4456.
For Discreet Consultation
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According to the Managing
Partner Confidence Index, by Citi Private Bank Law Watch, Q2 2009:
86% of Managing Partners who feel the economy
will stay the same or improve in the next six months.
79% of Managing Partners who feel the legal
market will stay the same or improve somewhat.
62% of Managing Partners feeling discounting
pressure from clients. |
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Contact
The Advocates at editor@targetedlegal.com
with comments, questions, articles, factoids and suggestions.
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