Easing the pain through partnership
In an economic downturn, law firms specializing in financial business can ease the pain by establishing relations with their clients that are not strictly based on individual deals. The clients may also benefit.
Of all those providing professional services, lawyers have often been the last to suffer in a downturn. Many actually do quite well when the economy looks ominous. Retooling for insolvency and restructuring work has served many firms that have found their previously booming corporate and capital markets practices underemployed in straitened economic circumstances.
But in the recession of the early 1990s some firms did what had previously been unthinkable: they laid off lawyers. A return to this looks increasingly likely for some firms. Those that have grown spectacularly on the back of a continuous flow of deals are now having to reassess how they will cope now that demand has dropped off.
There has been unprecedented growth in the legal sector over the past five years or so. During this time many firms have appointed new partners, and associate salaries have in some cases more than doubled in the past five years. What has been called the war for talent has meant that the payroll at the largest firms has climbed ever higher. With the decline in work that some departments are already facing, firms need to look for ways to keep lawyers busy and maintain revenues.