Legal profession surf definitely not up
In the client advisory produced by Citi Private Bank’s Law Firm Group and Hildebrandt Consulting – reported by The AmLaw Daily -- firms are told they can ‘no longer rely on a rising tide that lifts all boats’ because ‘the tide is out’.
The report paints a picture of a changing landscape for law firms, where partners bill for fewer hours while investing more into their firms through capital contributions. Law firm leaders are also expected to act like businesspeople rather than lawyers to attract clients as demand drops.
Between 2008 and 2012, global demand for legal services dropped 0.4 per cent, compared to a 3.7 per cent increase in the four years before 2008. Meanwhile, fee rates are rising at a much slower pace than before the financial meltdown.
According to the report, ‘With too many lawyers chasing too little work, pressure from clients to provide discounts and other forms of pricing concessions has become a fact of life in the current market’.
Dan DiPietro, chairman of the law firm group at Citi Private Bank, added that firms need to change their definition of success and accept they may need to engage in what others consider commodity work, as long as the cost-structure is right. Addressing the business climate this year, Mr Pietro added: ‘If you’re comparing it to a new definition of what a good year is, I think the year will be just fine.’