Worst Recession Since the Great Depression Affecting Lawyers Too

Alan Insul, a Los Angeles lawyer
limiting his practice to business, corporate, and real estate cases,
offers some candid commentary about his law firms dealing with new
economic realities.

It’s tough out there, even for lawyers. From major law firms to
small firms, excess is being trimmed in order to better facilitate a
nouveau climate urging more cautious business expenditures for legal
advice. “The nation’s businesses are pulling in their collective horns
beneath the juggernaut of our longest and deepest recession since the
Great Depression,” asserts Alan Insul, a Los Angeles lawyer limiting
his practice to business, corporate, and real estate cases, “I find
that many clients are shedding large law firm representation and
looking toward smaller firms for efficient and more cost-effective
legal representation.”

A survey of the nation’s top 250 law firms bears out what Insul is
saying. During the past year, these apex firms have shed 5,259 lawyers
from their payrolls, a drop of 4%. This is the largest lawyer retention
downturn since the National Law Journal began collecting such
information in 1928 – just prior to the dismal Great Depression. Two
other distinct declines, both in the neighborhood of 1 percent, were
recorded during the early 1990s. One firm, Fried, Frank, Harris,
Shriver & Jacobson lost 168 lawyers, a decline of 26.4%.

Other firms are cutting billing rates and pay for associates by up
to 20%, primarily in response to clients’ concerns about cutting the
costs of legal services.

“It’s a challenging marketplace we’re in now, and a changing one.
Clients, in looking toward smaller firms, while not willing to
sacrifice on quality, nevertheless are coming to appreciate that the
smaller more nimble firm is by definition more flexible, and can very
often handle most, if not all, of the same matters previously handled
by larger firms,” Insul explains.

During the early 1930s and especially in mid-1937 during the
so-called “second wind” of the Great Depression, lawyers too were
embroiled in a bleak scenario featuring bread lines and soup kitchens,
and a chronic lack of steady employment even for the most qualified and
best trained among them. Nowadays, the outlook is more positive for
lawyers, especially those willing to make some adjustments. “Making
some of these adjustments can even lead many firms and their clients to
a stronger business position overall,” Insul concludes.

To learn more, contact Los Angeles business attorney and California corporate lawyer, Alan M. Insul by visiting Insullaw.com.