Even after making unprecedented lay offs of attorneys and staff in the first quarter of 2009 that put thousands of lawyers and staff on the street, first quarter earnings reports for the top 100 law firms in the U.S. show declines of up to 20.5% in profits and 10-12% per partner earnings.
From the Chicago Tribune, April 30, 2009:
The downturn is a new experience for many lawyers at the top 100 firms. Since the early 1990s, they have grown used to steady increases in revenue and profits. The increases accelerated between 2003 and 2007, fueled by surging demand for lucrative work in the corporate and finance sectors and annual rate hikes.
But the bursting of the housing bubble and the ensuing credit crunch have brought an abrupt end to the golden age for corporate lawyers.
More evidence that our profession is changing. There is no safety net in the big firms any more. Even those that are still making partners and hiring associates, are stripping equity or cutting loose low-earning existing partners, so growth remains flat.
At this point, unless you’ve been under a rock somewhere, you know what’s happening out there. You don’t need another dismal report to tell you that your own profit margins have disappeared. Take control. Re-tool. Find out what folks need the most right now and deliver. The housing bust has taken away a lot of opportunity, but also has provided some. Learn to help the real victims of the crisis: the borrowers stuck paying for “toxic assets” lenders have erased from their books. Learn how to audit loans, represent borrowers in foreclosure, negotiate loan mods with banks. Whatever it takes to prepare yourself for the post-bust world and control your own destiny.