Things have changed considerably for the midsize and regional firms and partners who reaped the benefits when the recession hit in 2008, causing large firms to lay off lawyers by the hundreds. Now, midsize and regional partners are feeling the squeeze, too.
“What we are seeing is larger companies that have been represented by very large law firms looking to law firms like us, which have a regional footprint and can work more efficiently and cover the same practice areas.” (May, 2009)
1. ABA Journal, 1/26 Law Firm Mergers Help Push Unwanted Partners Out the Door, Recruiter Says
2. ABA Journal, 1/20 In Buyer’s Market for Clients, More Law Firms Face Choice: Merge or Die
3. Wall Street Journal, 1/20 Size Matters
4. Crain’s New York Business, 1/08 Contract Lawyers In Hot Demand
Here are the highlights:
- Law firm mergers increased by 65% last year and they are expected to “boom in 2012?
- Merger is a strategy to oust partners who don’t have enough business.
A merger “allows the law firm itself to weed out people they didn’t want to weed out on their own. The smaller law firm maintains that everyone gets to stay on board after the merger, but unwanted partners are offered ‘lousy deals’ to come on over.”
- Some layoffs are preparatory, as midsize firms solidify their financial picture before looking for potential merger partners
- Demand for contract attorneys is increasing, which means fewer partners
- Contract attorney prices are falling from the $60 to $80/hr pre-recession norm to $32-$40/hr (sometimes as low as $25) in New York City. What do you think the temp-attorney rates are elsewhere?
Summary: Unless you have a healthy portfolio of clients and business, you’re more vulnerable than you think, and the alternatives are grim. Your only security is your ability to bring in enough business to keep your job, or to succeed in your next job in a boutique or as a solo.
“Easier said than done,” you say. Not easy, we’ll agree, but simple enough that thousands of lawyers we’ve coached over the years, many of whom were terrified of selling, have created valuable practices. In three months, without leaving your desk, you can become known as one of the premier legal experts on a business problem that desirable clients must solve.