How to Thrive in the Diminishing World of the Legal Business

Opportunity is the word the keeps popping into my head as I read more and more discouraging pieces about the state of the legal field. (Some samples: Tom Huddleston Jr., Survey: Firm Leaders Admit Downturn’sPermanent Impact, AmLaw Daily, May 21, 2013 and Thomas S. Clay, 2013 LawFirms in Transition: An Altman Weil Flash Survey (2013).) Big clients don’t want to keep paying big dollars to big firms during a big recession/apocalypse/long-term decline. That makes sense. 

Some big firms can’t/won’t make the changes they need to remain competitive. That also makes sense. Try getting a speedy and good decision out of any large organization. It’s hard. No one wants to earn less than they previously did, or have fewer perqs, or diminish in stature. No one wants to make the unpopular decision, or be the ultimate fall-guy for a bad business choice. Cover-your-ass seems to be the modus operandi of far too many.

If big firms won’t make that change, someone else will. The solution seems quite simple: cut back and offer value. Clients aren’t buying the tasteful if bland art, the hushed hallways and soothingly lit corridors, the top-tier real estate and high-floor views. Big firms can rationalize these all they want. They can desperately cling to their turf even as it washes away beneath them. Charge clients less, pay lawyers and everyone else less, work fewer hours, and have a good life. How hard is this, really, to figure out?

—Lori Tripoli

Should Law Firms Proactively Cut their Fees?

I have to marvel at how some businesses do a phenomenal job measuring their performance, and how some business leaders then seem to hold endless meetings to figure out why their numbers keep going down. Have fewer customers quarter after quarter since, say, 2008? Do all other things remain the same—except there’s a glut of businesses like yours and of workers like those you hire and a lot of your work can be outsourced? Why wouldn’t a leader look to the recession as a likely cause?

I’m not surprised that a recent survey of legal departments by Robert Half Legal lists as one of the top challenges in 2013 controlling outside legal costs. Press Release, Robert Half Legal, Robert Half Legal Research Reveals Top Challenges Facing Legal Departments In Year Ahead (March 13, 2013). What I would like to see is a survey of outside firms indicating how they’re going to help corporate clients do just that. What excess will be trimmed? Will low-level associates be billed out at more reasonable rates? Will overall rates drop? Or will firms just wait until the corporate client looks elsewhere?

How to Survive a Depression, a Recession, and a Free-Fall Plummet

There’s no real way to sugarcoat recent reports about the state of the legal industry. Law school applications are down, lawyers have been laid off, profits at some firms have diminished.

The thing is, I remember when reports like this were about M.B.A. students and teachers. There were once too many of those.

Every business is being impacted by globalization, the recession, and technology. Some old models will fail. Some new ones will become vast successes. Sure, someone whose lifelong dream has been to work in the legal field, whether to be a lawyer or a paralegal, could go to art school instead. Or she could get an agriculture farming certificate, or figure out what engineering degrees are all about and get one of those. But a dream’s a dream. If the legal business is featured in yours, make it work for you. And don’t forget to hussle.

On the bright side:

• If you’re a middling student, you just may well have a better shot at a better law school right now.
• The retrenchment that’s going on may well mean the end of ever-escalating associates’ salaries—and the 80-plus hour weeks those lawyers work to earn them. Make less; live more.

Ten years from now, we’ll all have adapted. Industry changes are never easy, especially if some measure of shrinkage is involved. The law’s not going away; crime hasn’t ended; civil disputes certainly still exist. Someone is always going to need a good lawyer, and a good lawyer is always going to need an even better paralegal. What that lawyer and paralegal do to get more business and remain competitive, though, is probably going to change. But shouldn’t it change anyway? At least no one can accuse the law biz of being stagnant.

—Lori Tripoli