The American Lawyer does a great job summarizing 2008 for the Am Law 100:
Nothing grows forever. For the first time since 1991, both average profits per partner and revenue per lawyer dipped last year among the Am Law 100 firms, the top-grossing firms in the nation. And, given the weakness in the market thus far in 2009, another decline seems likely this year.
What’s amazing is the run these firms have had; most other businesses suffered 3 or 4 earnings slides during that period. Hopefully the law firms retained some earnings during the last 18 years to see them through.
There’s also a report from the Financial Times ($), giving a slightly brighter picture, focusing on the interest of US and UK firms in the (theoretically) growing Middle East and Africa. You have to love the eternal optimism that is inherent in managing partner DNA:
While no one doubts that there are genuine commercial opportunities in these places, lawyers are equally sure that there will not be enough work to go round. Almost every senior partner seems to think there are too many law firms there and that somebody will suffer â€“ although all are equally sure it will not be them.
This starts to hint at what is really going on. It’s not just the economy; clients are doing some things differently (beyond just asking for discounts), and won’t go back to the status quo when things turn up a bit. Most firms have to believe and convince key client partners that they will continue to win more work at the expense of others. I think the pie is being carved up, getting smaller, and being filled with mincemeat.
Sometimes you have to bite (gently) the hand that feeds, so the last words are for Aric Press and John O’Connor of TAL:
There will be blood — 2008 was not the bottom, just the beginning.