Law Firms Forever Changed by the Recession

In 2010 and forward, the focus for firms will be cost-efficiency. (Erin J. Cox, Economic crisis is a terrible thing to waste: Reforming the business of law for a sustainable and competitive future, 57, UCLA Law Review, 2009.) The pre-recession firm structure is no longer viable in the new economy and cost cuts are not only a priority, but also a necessity. During the good times, firms spent too much money too quickly and it proved to be unsustainable. (Cox at 57.) From 2000-2007, firm expenses rose by an average of 10.1% per year, driven primarily by inflated associate salaries and opulent real estate. (Cox at 57.)

A tactic firms are now implementing are pay freezes, and in some cases, pay reductions. A partner at a major firm stated, "Some lawyers are paid a salary topping $150,000 without any legal experience beyond law school. I think a lot of that is over." (Andrew Kitchenman, Recession changes the letter of the law, NJBiz, November 16, 2009 at 2.) At least in the short-term, lawyers will make less money than before.  

Another short-term tactic firms are employing is layoffs. Between 2008 and 2009, large law firms cut 6 percent of their workforce. (Emily Barker, One Step Back, American Lawyer, March 1, 2010.) The American Bar Association characterized this trend when they said; "law firms are shedding associates like snakes shed skin." (G.M. Filisko, How the Recession has reshaped legal recruiting, 38, Student Lawyer, September 2009.) Clients are no longer willing to pay for inexperienced associates and in-house counsel has become more sophisticated at monitoring billings with the help of new software. (Tamara Loomis, Has the recession forever changed large law firms, The American Lawyer, October 6, 2009 at 1.)

Building a Better Legal Profession (BBLP) is a national grassroots movement that seeks market-based workplace reforms in large private law firms. For more information, visit BBLP's Web site at www.betterlegalprofession.org.