Alan Insul, a Los Angeles lawyer limiting his practice to business, corporate, and real estate cases, offers some candid commentary about his law firms dealing with new economic realities.
It’s tough out there, even for lawyers. From major law firms to small firms, excess is being trimmed in order to better facilitate a nouveau climate urging more cautious business expenditures for legal advice. “The nation’s businesses are pulling in their collective horns beneath the juggernaut of our longest and deepest recession since the Great Depression,” asserts Alan Insul, a Los Angeles lawyer limiting his practice to business, corporate, and real estate cases, “I find that many clients are shedding large law firm representation and looking toward smaller firms for efficient and more cost-effective legal representation.”
A survey of the nation’s top 250 law firms bears out what Insul is saying. During the past year, these apex firms have shed 5,259 lawyers from their payrolls, a drop of 4%. This is the largest lawyer retention downturn since the National Law Journal began collecting such information in 1928 – just prior to the dismal Great Depression. Two other distinct declines, both in the neighborhood of 1 percent, were recorded during the early 1990s. One firm, Fried, Frank, Harris, Shriver & Jacobson lost 168 lawyers, a decline of 26.4%.
Other firms are cutting billing rates and pay for associates by up to 20%, primarily in response to clients’ concerns about cutting the costs of legal services.
“It’s a challenging marketplace we’re in now, and a changing one. Clients, in looking toward smaller firms, while not willing to sacrifice on quality, nevertheless are coming to appreciate that the smaller more nimble firm is by definition more flexible, and can very often handle most, if not all, of the same matters previously handled by larger firms,” Insul explains.
During the early 1930s and especially in mid-1937 during the so-called “second wind” of the Great Depression, lawyers too were embroiled in a bleak scenario featuring bread lines and soup kitchens, and a chronic lack of steady employment even for the most qualified and best trained among them. Nowadays, the outlook is more positive for lawyers, especially those willing to make some adjustments. “Making some of these adjustments can even lead many firms and their clients to a stronger business position overall,” Insul concludes.