Over the past decade we’ve witnessed unprecedented growth in the legal economy prompted by a number of change factors including technology, a strong global economy and the infusion of top managers. The technology responsible for this growth includes the Internet, VOIP, outsourced cheaper partners, better research tools and the ubiquitous blackberry.
The economy fueled by cheap debt, a robust capital market and low taxes led to an increased need (Mr . Supply meets Ms. Demand) of top legal talent. The technology leaps which was referenced earlier was also responsible for the surge in IP Attorneys which then fed the Corporate Attorneys and is now feeding the restructuring attorneys.
Along the way the law firms hired outsiders to help them lead their companies. These outsiders joined the firms with of a wealth of management speak and were responsible for significant maturity in financial, marketing, human capital and supply chain issues. Amidst the efficiencies achieved perhaps no greater was that of the economy of scale which led to the growth of the mega-firms. These mega-firms with hundreds of lawyers, regional and international offices, and a wide spectrum of service offerings.
The megafirms also hired Madison Avenue ad agencies who helped craft unique messages about the brand (aka the firm). These sophisticated firms also changed their names from an alphabet soup of partners names to a single strong name like Coke or Amazon.
With the current recession in full swing, these change factors are being put to the test. Can the reduced fees sustain the cost of operating the mega firms? Will the regional firms become dominant again? If there were economies of scale a few years ago, one would logically assume it’s more important than ever. This of course means the firms are going to have to find new ways to cut costs and further leverage these change factors.
Warren Recruiting is looking forward to seeing the impact of the Change Factors and helping the legal landscape evolve.