Sunday, May 18, 2014
2014 "Law Firms in Transition" survey finds managing partners acknowledge the "new normal" is here to stay
The 6th annual Altman Weil survey on "Law Firms in Transition" is available here but if you don't want to read the entire 131 page report, the Wall Street Journal Law Blog has a good summary here. The survey, conducted in March and April of this year, was sent to managing partners and chairs at 803 law firms across the nation with 50 or more lawyers. The response rate was 34% overall with 42% of the nation's 350 largest firms responding. Among the findings as summarized by the WSJLB:
Nearly six years after the financial crisis kicked off widespread industry upheaval, the majority of law firm leaders polled agree that the following are now permanent parts of the legal landscape:
- Greater price competition
- Practice efficiency
- Commoditization of legal work
- Competition from non-traditional service providers
- Non-hourly billing
. . . .
Firm leaders also agree on the consequences of the shifting marketplace, although with less unanimity. Most expect to see smaller annual billing rate increases, fewer equity partners, more part-time and contract lawyers, reduced leverage, and slower growth in profits per partner.
Despite this daunting self-assessment, law firms are proceeding without an apparent sense of urgency. Most firms are making some adjustments, and some are testing new strategies, but there is certainly not a groundswell of change.
. . . .
Regarding the prospects for newly minted law grads at the larger firms, the survey found that managing partners report that clients still balk at paying to train first year associates and that the top of the market starting salaries of $160k are not sustainable from the client's perspective. (It's interesting to note that those starting salaries haven't moved in nearly a decade which tells you something).