As the new year gets underway, we were hopeful of finally presenting you with some rosy news about the prospects for legal industry recovery in 2012. As most readers of our blog will tell you, our regular reporting of industry trends — from the likes of Dan DiPietro at Citibank — have come with some harsh truths that are tough to swallow for most lawyers and law firms.
Unfortunately, the news for 2012 is anything but rosy. One of our most well-informed peers in the legal arena, Jerry Kowalski, paints a far more gruesome picture than any other pundit has recently dared to deliver. Kudos to Jerry for his unvarnished look at the threats facing law firms in 2012.
Here are some high(low?)lights from Jerry’s list of thirty trends:
1) Continuing decline in legal spend on outside counsel.
2) Careful consideration by general counsel whether to build or buy. Corporate legal departments will be major competitors of law firms.
3) Increased direct competition for the legal spend from LPO’s and other alternate providers of legal services.
11) De-equitization of partners and reductions in head count will continue.
18) More intelligent use of office space. This will include moving support functions to less expensive offices.
23) Law firms will make more investments in technology than in people.
26) There will be periodic announcements by a partner at a BigLaw firm stating “after 25 rewarding and wonderful years with my former firm, I have decided to open a solo practice so that I can work more closely with my clients.”… Sometimes these announcements really mean “I’ve been on the job market for almost a year since I was asked to leave my former firm. I haven’t been able to find a new slot and my firm wants me out right now, so I may as well give this a try.”
27) Virtual law firms, such as Clearspire and Rimon will continue to grow and gain real traction and increased market credibility.
28) Sadly, we will also see additional law firm failures.
The question from RainmakerVT is, “Do you want 2012 to be the year you eat the bear, or the year the bear eats you? If your answer is the former, the only solution that trumps all these threats is becoming an expert on a novel business issue where you can command premium pricing — despite the fact that almost every other area of law is now subject to unprecedented price pressures.