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Editor: Paul L. Caron
Pepperdine University School of Law

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Friday, May 16, 2014

Law Firms in Transition

Altman Weil, Law Firms in Transition:

Large majorities of law firm leaders responding to the survey agree that greater price competition, practice efficiency, commoditization of legal work, competition from nontraditional service providers, and non-hourly billing are all permanent changes in the legal landscape. For the most part, these are changes that have been imposed upon them from without – from more demanding clients and more competitive newcomers who are challenging the rules of legal service delivery.

Each year since 2011 when we first asked the question, more than 90% of firm leaders have said they believe there is a permanent market shift requiring greater efficiency in the delivery of legal services.

When asked if growth in lawyer headcount was a requirement for continued success, just 49% of firm leaders said yes, down 6% from 2013. Numbers for net change in 2013 lawyer headcount seem to support this finding for the most part. Median responses from all survey participants showed a 2% increase in non-equity partners, a 1% increase in partner-track associates, and no net change for equity partners, non-partner track associates and other full-time lawyers.

Two-thirds of law firm leaders think the pace of change in the profession is still increasing. Another 30% believe it will remain at its current pace (which is not inconsiderable).

An ongoing drag on firm leaders’ ability to lead change is found in their partners who are often unaware of the ways in which the profession is changing or who simply don’t want to do things differently. Leaders rate their partners overall awareness of and adaptability to change at a median of ‘6’ on a 0 to 10 scale in both of these areas.

AW

(Hat Tip:  Wall Street Journal Law Blog.)

http://taxprof.typepad.com/taxprof_blog/2014/05/law-firms.html

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Comments

"Large majorities of law firm leaders responding to the survey agree that greater price competition, practice efficiency, commoditization of legal work, competition from nontraditional service providers, and non-hourly billing are all permanent changes in the legal landscape..."

Who wants to email this to S&M?

Posted by: Unemployed Northeastern | May 16, 2014 9:12:08 AM

It's irrelevant to the S&M study. All the data used here is from after 2008...

Posted by: Former Editor | May 16, 2014 11:08:34 AM

@Former Editor,

It's not irrelevant to the part of their study where they claim that there are absolutely no structural or permanent changes in the legal profession and give us their 100% assurance that there won't be for the next three decades, because, well, they said so (and because if there are, all of their analysis is utterly ruined). See also their many indignant addendums on Balkinization and Leiterland reiterating as much.

Posted by: Unemployed Northeastern | May 16, 2014 2:33:19 PM

@ Unemployed Northeastern

My comment was a joke. I entirely agree with you. My jocular point was that because their data reflects nothing of the bottom falling out of the legal market, ALL of their conclusions (including those about structural change) are essentially worthless and therefore irrelevant to a study that is using current data.

Posted by: Former Editor | May 16, 2014 4:28:41 PM

@FE,

Gotcha. Humor can be hard to suss off the page/screen sometimes. Someone should also probably send S&M Scalia's speech...

Posted by: Unemployed Northeastern | May 17, 2014 9:25:59 AM

I don't think the fact that a handful of law firms are facing the exact same challenges as everyone else in a bad economy would change S&M's conclusions that those with law degrees are still doing better than those with bachelor's, whether the economy is strong or weak. S&M's data goes through 2013, not 2008.

Posted by: Anon | May 20, 2014 2:40:06 PM