Happy Days Ahead for Job Prospects--Maybe?

 The report today of a drop to 8.5% in the U.S. unemployment rate is good news, but what does it mean for American law firms?

Are happy days here again?

Three important points come to mind:

1. It will be more important than ever that U.S. law firms base their 2012 business plans, as well as longer-range strategic objectives, on facts, not informed guesses or "visions."  Before you assume an increase in fee revenue in one of your firm's practice areas or from a client sector, be sure to ask, "How do we know?"
2. Watch Europe.  The ongoing financial issues there are not resolved. In today's highly-connected world, failure of European Union leaders to find a sustainable solution to their problems will almost certainly slow any recovery in the U.S. economy.
3. Hope that this is part of a more robust recovery, but be prepared for the possibility that it is not.

With respect to that third point, remember that most economists still view any U.S. recovery so far as fragile.  Think about these points and how they might affect your firm and your clients:

• Job-creation does not appear to be uniform across the economy or the country.  To what extent are the new jobs being created in the industry sectors of your clients?
• There are significant sections of the work force that are being left behind.  Today's report also points out that unemployment rates of 23.1% for teenagers, 15.8% for blacks, and 11.0% for Hispanics - and that these rates show little change.
• The U.S. economy still has a basic structural problems with:  unusual numbers of long-term unemployed people, especially from the middle class; a growing gap between rich and poor; the decline of the position of many middle class families into poverty; and upward mobility that has fallen behind that of other developed countries. Because the U.S. political system is unlikely to address any of these problems in a serious way in the foreseeable future, they will create a long-term drag on the U.S. economy, which must be taken into account into any well-informed long-range strategic planning for U.S. law firms.

I do not mean to sound unduly pessimistic. 2012 can be a good year for U.S. law firms; but this also is a time for prudence and realism.

Even if happy days are not here again, there are some signs that they might arrive soon.

Read more on the Walker Clark Worldview 

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