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The Legal Industry: Charts Edition!

 

In case you’ve been living under a rock for the past – mmm, five years – the legal industry is not doing so hot right now. And as a result, law schools and firms have come under a large degree of scrutiny. This past week a number of mainstream medis outlets discussed the problem. Which officially makes it a “Big Deal” as it doesn’t matter when legal blogs talk about it.

Let’s start with ”the Old Gray Lady:”

NYT law school chart

Via a tip from Consultant’s Mind comes this story from the Atlantic:

atlantic aba applications

atlantic law school employment

Over at What About Clients, Dan Hull points out two stories from the Economist:

economist legal services costs

And finally, pretty much below the radar from everyone, The Center for the Study of the Legal Profession at the Georgetown University Law Center and Thomson Reuters Peer Monitor released their 2013 Report on the State of the Legal Market (PDF link):

Peer monitor growth chart

peer monitor billing chart

The 2013 Report’s conclusion?

It is now increasingly clear that, even when more normal growth returns, the market will be very different from the way it looked in the pre-2008 period. Building on underlying forces that were present even in the pre-recession period, the economic down turn served as a catalyst that has changed the legal market in fundamental ways, not the least of which has been the shift from a seller’s to a buyer’s market for legal services. With that shift has come growing client insistence on efficiency, predictability, and cost effectiveness in the delivery of legal services, a reality that has required a fundamental paradigm shift in law firms themselves. The new, more intensely competitive market has also required law firms to refocus their own strategies and to take steps to manage their businesses more effectively. From aggressive expense controls to improved work processes and from alternative pricing structures to more expansive staffing strategies, firms have scrambled to address the challenges of the rapidly changing market.

The funniest thing to me in the report’s conclusion is the following sentence:

…growing client insistence on efficiency, predictability, and cost effectiveness in the delivery of legal services, a reality that has required a fundamental paradigm shift in law firms themselves.

Translation: “Oh shit! Clients got smart! They don’t want us to continue billing them excessive, exorbitant rates to justify our mahogany paneling and marble floors! They want us to *gasp* help control costs!!!” Cue swooning of middle-aged white shoe firm partner.

[hr]

Still excited to be going to law school? Or be a new lawyer? Scared? Nervous? You should be. To be become successful as a new lawyer now takes more work than probably any time in the past. Demand for legal services is depressed and pricing is dropping or becoming flat. And being smart and a hard worker isn’t enough (not that it ever was). Smart and hard working is the baseline just to get in the game. You’ve got to bring more to the table.

Hustle more than the next guy. Network more than the next guy. Work smarter than the next guy. Think about problems laterally. Discover new ways to help clients resolve legal issues quickly and effectively while controlling costs. Because now more than ever, legendary Harvard Business School marketing professor Theodore Levitt’s famous axiom holds true:

“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”

Clients don’t want to retain lawyers in order to justify associates or fancy offices, clients retain lawyers to solve their legal problems. The more your work and effort focuses on client’s legal problems, the more likely you to stand out from the herd, make a difference, and find success in the practice of law.

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About Keith Lee

I'm the founder and editor of Associate's Mind. I like to write, talk, and think about law, professional development, technology, and whatever else floats my boat. I practice law in Birmingham, AL.

2 comments

  1. Oh the power of graphs. If you weren’t scared of applying to law school before, I bet you are now.

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