Thriving in a Recession
Recently First Alert - Bowman's Accounting Report, published by Bowman Communications, Inc. focused on as "Thought leadership for your challenges ahead" with mini-articles by 14 experts, including yours truly.
Here's what I had to say:
The Big Trend
The law firm recession is here, with firms laying off lawyers and staff, a decline in M&A and transaction work, a drop-off in litigation, particularly in Texas and California and work once thought to be complex, like project finance, is now viewed as routine and is priced accordingly. Corporate procurement departments are getting involved in hiring law firms, and demanding rate freezes or discounts.
The Unconventional Wisdom
Look past the real estate, airline and construction downturn, and target companies in thriving industries, like technology, energy and telecommunications. Strategy: emphasize cross selling. Defense: Protect your “crown jewel” clients with frequent visits. Offense: Pick off top talent from competitors whose profits per partner are dropping.
The Misplaced Assumption
Law firms are cutting marketing, which is like dumping jet fuel while trying to keep an airplane aloft. Instead, law firms should fire low-margin, low fee, non-strategic clients, include business development activity and results in every lawyer’s performance review, shut down unprofitable practice areas, even if they generate revenue and close unproductive offices.
The Watch List
Emulate the firms that are best at balancing a thriving business with their obligations to the profession: Debevoise & Plimpton; Weil, Gotshal; Munger, Tolles; Latham & Watkins; Patterson Belknap; Paul, Weiss: Cleary Gottlieb; Wilmer Cutler; Gibson, Dunn; and Orrick.
The Bold Prediction
The recession will be intense, but short. Everyone wants to get back to normal. Short term, the backlog of real estate will be sold as owners accept losses; banks will end the credit crunch; layoffs will make companies more efficient. Long term: end of the Bush disaster will be replaced with a new optimism when a Democrat is elected president.
For more excerpts from the First Alert special issue visit the LawMarketing Portal.
