TMG's Take... on the Outlook for Law Firms
A perspective on legal management issues from The McCormick Group.

The events of the last six weeks have certainly had an impact on the legal economy. Most obviously, collections will be a huge challenge for law firms, which typically put on a full-court press to collect accounts receivables at the end of the calendar year. Long term, pundits have already been projecting what will happen as a result of the continuing economic slump, the monumental financial bailout package passed last month, and the prospect of even more legislation. Here are some observations from our end:

• The financial rescue package and the imminent re-regulation of the financial services industry are likely to exacerbate the already clear trend toward stratification of the legal industry. Over the past 15 years, we have seen the banking regulatory practice increasingly dominated by top-tier firms such as Sullivan & Cromwell, Cleary Gottlieb, Sidley Austin and Arnold & Porter. Several midsized firms that had large banking regulatory practices in the 1980s have seen those practices wither away. (The same trend has also been more recently occurring in securities regulation, as top securities enforcement lawyers are tending to gravitate to the big New York or major multi-city firms.)
• Firms with strong Washington regulatory practices will weather the storm a bit better, as there will likely be a significant increase in regulatory work (and related litigation), no matter who wins the election. Beyond financial services, increased environmental regulation is sure to come in the next few years, as the “green” revolution continues and global climate change legislation gets enacted. (Already, we’re seeing a renewed emphasis on consumer product safety, in light of the passage of the Consumer Product Safety Modernization Act in August.) Some of these areas will provide midsized firms an opportunity, because many clients are unlikely to pay $700 and more per hour for nuts-and-bolts regulatory work.

Our overall conclusion: If your firm has neither a strong financial services/securities regulation practice nor a strong Washington regulatory presence, you might want to take a serious look at your strategic plan.

TMG's Take is a regular e-mail advisory produced by The McCormick Group. The company's Law & Government Affairs and Law Firm Services groups combine the expertise of more than 15 Consultants to help law firms fulfill all of their lawyer and administrative recruiting needs. TMG's Take covers topics across the spectrum of law firm management, including associate and partner compensation, growth strategies, marketing and business development, operations and facilities management, finance and accounting, professional development, and technology. Please direct all inquiries to Steve Nelson, Managing Principal, at 703.841.1700 or snelson@tmg-dc.com.