Celebrating 10 years! 2007-2017

what will the next recession do to the legal job market?

Looking for thoughtful answers here. It's pretty apparent t dcgootle09/01/17
lawyers hooking on craigslist? notreallyalawyer09/01/17
I suspect it'll contract again. But it'll be nothing compare thirdtierlaw09/01/17
Old boomers in cavernous, empty offices screaming at their l therewillbeblood09/02/17
Credited. midlaw09/05/17
I really hope the profession is near rock bottom, although i loblawyer09/01/17
The industry is already pretty lean, and enrollment is decli texfed09/01/17
Yeah, the historical trend has been for recent grads to wait 6figuremistake09/02/17
My friend is in in the GC of General Motors. She told me tha mrlollipop09/02/17
Maybe they realized paying someone 1200/hr to "Review client 3lol09/02/17
I think a lot will depend on how the insurance companies rea patenttrollnj09/02/17
Yep. Insurance companies are really working over law firms qdllc09/05/17
To ber fair, it was the law firms that originally abused the patenttrollnj09/05/17
One thing that I wonder is whether big companies might event skepticmadenotborn09/04/17
Has in house always demanded ridiculous credentials like "to mtbislife09/04/17
For fortune 500 companies yes. But even today you can find s thirdtierlaw09/04/17
We live in a boom and bust economy so a market correction is nighthawk09/05/17
dcgootle (Sep 1, 2017 - 2:52 pm)

Looking for thoughtful answers here. It's pretty apparent that the profession has undergone a permanent contraction as it doesn't seem like anything can get it to the pre-08 hiring levels. Based on history, a recession is likely within the next few years, if not sooner. Where will we be at that point?

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notreallyalawyer (Sep 1, 2017 - 3:46 pm)

lawyers hooking on craigslist?

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thirdtierlaw (Sep 1, 2017 - 3:51 pm)

I suspect it'll contract again. But it'll be nothing compared to the blood bath that 2008-2011 brought. Biglaw is going to be hit the hardest. You'll see whole OCI classes getting no offered, stealth layoffs, and more "restructuring of firms" i.e. massive layoffs.

Maybe you'll see a bit more growth in midlaw as some of the large companies who avoided making the switch between 2008 and 2011 go for the cheaper services.

The industry is so much leaner than it was a decade ago, it's unlikely that it has much further to contract. Well until automation starts creating its own havoc.

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therewillbeblood (Sep 2, 2017 - 11:29 am)

Old boomers in cavernous, empty offices screaming at their last remaining associates because they weren't able to review 2,000,000 documents and draft a motion for summary judgment by themselves, before trudging off to the local steakhouse to complain about how their profit share keeps going down no matter how many associates they fire.

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midlaw (Sep 5, 2017 - 6:15 am)

Credited.

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loblawyer (Sep 1, 2017 - 4:02 pm)

I really hope the profession is near rock bottom, although it's obvious law schools haven't remotely adjusted and seem to have no intention to so so. I agree that biglaw is probably the most vulnerable - there are already articles about $180k starting salaries taking their toll on the lesser biglaw firms. Clients aren't making up that difference; first year billing doesn't generally get paid as it is.

I'm in a far smaller firm making far less, but my billable is reasonable and actually gets billed and collected.

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texfed (Sep 1, 2017 - 10:10 pm)

The industry is already pretty lean, and enrollment is declining at the worst law schools. A recession won't shrink the industry as much as 2008, but (despite sites like this one) will probably drive more lemmings to law school to wait out the recession, saving the worst schools from closure just as we're finally getting close to seeing them die. It's a shame.

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6figuremistake (Sep 2, 2017 - 3:43 pm)

Yeah, the historical trend has been for recent grads to wait out recessions by going to grad school including (or particularly) law school. I hope the bump won't be that large because of the greater transparency regarding law school outcomes. That said, once the law schools start graduating classes during the recession that can't find any work, it will be another round of really bad press that may be difficult for some of the lower tier schools to endure. A nasty recession, followed by a weak recovery (in an industry that wasn't that great to begin with), followed by another (even minor) dip, hopefully will be enough to finish a few scam outlets off.

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mrlollipop (Sep 2, 2017 - 8:05 am)

My friend is in in the GC of General Motors. She told me that GM hired over 15 biglaws right before 2008 crisis. Now GM only uses 6 biglaws and hires more midlaw to do their work. She even said the management is planning to cut one more biglaw.

I won't be surprised other big companies are doing the same thing: reduce works for biglaw and hire more midlaw because its cheaper.

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3lol (Sep 2, 2017 - 10:57 am)

Maybe they realized paying someone 1200/hr to "Review client files" was a needless expense. It's shocking it took a financial crisis for that to happen.

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patenttrollnj (Sep 2, 2017 - 12:27 pm)

I think a lot will depend on how the insurance companies react.

Much of the 2008-2010 job losses were the result of insurance companies no longer willing to pay for each and every billable hour charged by law firm, thus causing firms to switch to charging a flat fee or billing fewer hours. As a result of this, fewer attorneys were needed.

These many insurance mills were the "bread and butter" of far too many lawyers, including a steady revenue source for biglaw firms. It was a dirty little secret that these mills operated as a "scam" in which arbitrary billable events were created in order to charge the insurance company--most of these billable events being utter nonsense. For 20 or so years the scam lasted, but eventually the insurance carriers caught on.

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qdllc (Sep 5, 2017 - 7:28 am)

Yep. Insurance companies are really working over law firms to have more done for less. Even when they are underbilled for services rendered, they always push to go lower. It's sort of a war of attrition. The firms that can hold on will be the ones left standing when it hits bottom.

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patenttrollnj (Sep 5, 2017 - 9:58 am)

To ber fair, it was the law firms that originally abused the system. For 20 or so years, they had this great scam going, and many attorneys became rich by over billing for trivial or unnecessary work.

I recall that the insurance companies started causing problems as far back as 2006-2008, but then when the "great recession" started. At that point, they really got aggressive about cutting costs.

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skepticmadenotborn (Sep 4, 2017 - 12:49 pm)

One thing that I wonder is whether big companies might eventually just start hiring in-house lawyers straight out of law school. In-house is already the default preferred destination of people getting hired by big firms; Biglaw associates go into their firms knowing there is virtually no chance of making partner. And of course it's much cheaper to have an in-house lawyer do something than an outside firm.

The drawback, of course, is that lawyers get trained in big firms before going in-house. But big companies already have training programs for other employees. They may decide it's cheaper or easier just to train new law grads.

There will probably always be a place for firms to handle highly specialized work with which in-house lawyers aren't familiar. But the work that surpasses that threshold may become rare.

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mtbislife (Sep 4, 2017 - 5:19 pm)

Has in house always demanded ridiculous credentials like "top law school, amlaw100 and 8+ years experience" or is this a product of the market being saturated?

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thirdtierlaw (Sep 4, 2017 - 5:36 pm)

For fortune 500 companies yes. But even today you can find some small businesses offering 75k for a "general counsel" and hire someone from a T3 or T4.

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nighthawk (Sep 5, 2017 - 11:18 am)

We live in a boom and bust economy so a market correction is coming. When it happens, people will shift what they do. In 2008-9, I recall small real estate firms becoming consumer bankruptcy firms overnight. Lawyers who have done sophisticated transactional work will look to more traditional legal practices like wills and litigation. There will be a strong push into family law, which tends to be much easier to break into or go solo. There will be talk of market saturation, though that is nothing new. Big firms will merge and some will go the way of Heller Ehrman and Thacher Profit.

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