Firms, Clients Differ on Legal Industry's Forecast
A survey of private-practice lawyers, corporate counsel and law students found widely divergent views on the state of the legal industry and the future of the law firm business model. Released Thursday during a panel discussion in New York City on the future of the law firm business model, the LexisNexis-commissioned survey (executive summary) found that 71 percent of corporate counsel say that law firms are not doing enough to respond to the current financial pressures on their business model. By contrast, 77 percent of private-practice lawyers believe that their clients are too focused on reducing costs, at the expense of quality and long-term results.
Described as the first substantial survey of the legal industry since the beginning of the economic crisis, the survey polled 300 law firm lawyers, 150 in-house counsel and 100 law students. Their responses suggest perspectives on the crisis differ significantly based upon one's vantage point. Nearly half of in-house counsel, for example, say they have requested rate cuts from their outside firms. Yet just 18 percent of private-practice lawyers say their firms have implemented such cuts.
Only 38 percent of in-house counsel believe that law firms are hearing their plight and responding by cutting fees and costs. Maybe as a result, 69 percent of corporate counsel have shifted work in-house and 56 percent have reduced their spending on outside firms. Yet the firms report that they have taken steps to respond to the economic crisis: 43 percent have had layoffs, 41 percent have offered clients alternative fee arrangements, 33 percent have frozen their hiring, 29 percent have deferred start dates and 26 percent have reduced salaries.
From where they sit, law students are understandably worried about what they see. Sixty-five percent of law students (and 90 percent of lawyers) say law school does not teach them the practical business skills they need to practice law in today's economy. More than a third say they do not feel adequately prepared by law school to succeed in the marketplace. Given the changes in the market, a fifth of all law students now say they regret going to law school in the first place.
Surprisingly, one point on which private attorneys and corporate counsel largely agree is long-term change. Only 53 percent of corporate counsel and 52 percent of law firm lawyers believe the recession will result in permanent changes to the way the legal industry does business. A majority of lawyers, this would suggest, continue to go about their business wearing blinders.
Posted by Robert J. Ambrogi on December 8, 2009 at 01:00 PM | Permalink
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