Remember when bedtime stories always began with “Once upon a time”? Well, once upon a time, most law school graduates joined an established firm where they could remain for their entire careers. But as we all know, the times have changed—as have lawyers’ employment options.
So let’s look back at the good old days before the latest recession and compare them to how employment life has changed today, not only for fresh-out graduates but also for a growing number of seasoned lawyers.
For many years, the changes were beneficial for lawyers. Firms began to grow substantially as new areas of law developed, and they had to hire more and more lawyers to handle the growing amount of work. In addition, the overall number of firms increased dramatically due to spin-offs and start-ups. Even though law school enrollments were also increasing, these developments produced abundant employment opportunities for graduates, and as the supply struggled to keep up with the demand, associate salaries escalated. The only question most faced was “Which offer will I accept?” and not “Will I be able to find a job?”
At the same time, firms developed aggressive growth plans to meet their clients’ increased needs as well as the increased competition. These developments heightened the demand for experienced lawyers, particularly ones with substantial books of business, and many were able to achieve a substantial increase in income by moving to new, better-paying firms.
But, of course, by early 2008 the picture changed. Firms, mostly but not entirely large ones, began cutting partners, associates and staff, postponing start dates for newly hired associates, reducing salaries, eliminating summer associate programs and sharply reducing or even eliminating hiring.
And today? A basic law of physics is that “For every action there is an equal and opposite reaction.” This can be adapted to the legal profession as “For every old trend there is an equal, if not opposite, new trend.”
Let’s start with law school graduates. The recession has made openings with law firms, companies and government entities scarce. As a result, an increasing number of recent law school graduates are striking out on their own and setting up law offices. As confirmation of this trend, a number of state bars are seeing a membership growth in their solo practitioner and small firm sections.
Furthermore, some law schools are adding or considering adding more courses for solo practitioners, including ones covering entrepreneurial and small business strategies, such as how to maintain the proper financial records and how to develop new business. (An informative list of links to some of these schools is at www.entrepreneurship.org/en/entrepreneurship-law.)
However, the growing move to starting a solo practice is not just limited to recent graduates. A noteworthy segment of lawyers who have been practicing with firms, whether large or small, are also going solo. And a growing number are doing it by locating their offices in their homes. Also noteworthy is that for some the appeal of a home-based practice extends beyond the need to control expenses—they feel it also leads to a better work-life fit and increases their productivity, too.
One of the most dramatic and fastest-growing trends involves partners leaving large firms—not to join another large firm to increase their income but to join a smaller firm or even start their own. One of the driving factors behind this is the increasing number of conflicts that arise with mergers involving their current firms. Another important factor in a good many cases is the ability to provide lower fees for clients who either were resisting or could not afford the large firms’ hourly rates.
In that same vein, perhaps the most surprising example of experienced lawyers trading in their big firm life is the trend to join contingent-fee plaintiffs’ litigation boutiques. As one of these lawyers, Michael Bonella in Philadelphia, said, “Now we can service clients who don’t have the money or do have the money but don’t want to pay high billable rates.”What all this may add up to is that “once upon a time” has been replaced with “the only constant is change.”
Bob Denney , President of Robert Denney Associates, Inc., has been providing management and marketing counsel to law firms throughout North America for over 30 years.