12/11/2009 01:16:54 PM EST
LexisNexis Survey: Legal Community Deeply Divided On Business Issues, Impact Of Economic Downturn, Future Of The Industry
A new national survey reveals deep divisions between corporate counsel and private practice attorneys over the current state of the legal industry, the impact of the economic downturn and what the future holds for the law firm business model. The just-released State of the Legal Industry Survey was commissioned by LexisNexis.
Almost three in four (71 percent) corporate counsel surveyed say they feel law firms are not doing enough to respond to the current financial pressures on their business model. Almost half the in-house counsel polled (46 percent) say they have requested rate cuts, yet less than one in five (18 percent) private practice attorneys say their law firms have reduced billing rates.
The survey also reveals that law school students are feeling the impact of the current turmoil within the legal industry. More than half of law school students surveyed (54 percent) say that the current state of the legal industry has made them consider career alternatives, while almost two-thirds (65 percent) believe law school does not teach the practical business skills needed to practice law.
With the majority of corporate counsel believing law firms are not taking enough action in response to the economic downturn, most also say that, in 2009, they shifted work in-house and reduced spending on their outside counsel.
Meanwhile, a sizeable majority of private practice attorneys (77 percent) say they believe their clients are too focused on reducing costs. According to the survey, private practice attorneys say their firms have taken a number of steps in 2009 to respond to the changed economic climate, including instituting alternative fee arrangements, reducing staff and imposing hiring freezes.
Despite the considerable impact of the economic recession, just over half of corporate counsel (53 percent) and private practice attorneys (52 percent) believe the recession will permanently change the way business is conducted in the legal industry. Looking to 2010, opinions are divided on the future direction of the law firm business model and the billable hour. Further cuts are predicted by corporate counsel and, to a lesser extent, by private practice attorneys.
The survey shows that a majority of current law school students feel ill-equipped for the business of law, and many are considering alternative careers as a result of the uncertain future of the legal industry.
The national survey, the first of its depth and breadth to be conducted on the legal industry since the beginning of the economic crisis, polled a total of 550 respondents, including 300 law firm lawyers, 150 in-house corporate counsel and 100 law students. The study was fielded by custom research agency TNS. The complete findings are available online.