There was a time when lawyers spent an entire career in one particular practice area. For an increasing number of attorneys, those days are over. With practice areas becoming more cyclical and a heavy emphasis on maintaining profitability, lawyers are feeling the pressure to re-tool. I recently had an opportunity to speak at the Association of Legal Administrators Conference in St. Louis regarding this topic and wanted to share some initial highlights of the discussion below:
A legal career used to be very stable. After about eight years as an associate, you made partner, and continued your career at the same firm. However, as competition in the legal marketplace has increased, law firms have begun to operate more like businesses with heavy attention to profitability, measured by profits per partner. Beginning about five years ago, firms began to reduce the number of equity partners being made each year by either adopting two-tiered partnership models and/or deferring partnership for some associates. Companies have drastically cut legal budgets.
Since September 2008, the legal industry has lost about 34,000 jobs. Firms started reducing associate salaries, deferring start dates for incoming associate classes and eliminating lock-step pay. A dean of one of the top law schools in the country said that as of September 1, 40% of the class of 2009 did not have a job. The previous year it had been 4%.
Now, more than ever, law firms are more business-oriented in how they operate, and companies are heavily focused on cost containment and doing more with less. Efficiency is one way to ensure survival, which is why the business case can be made for practice area re-tooling. Among the many changes in law practice management over the last 10-15 years is the growing acceptance of attorneys who change specialties. An associate, junior partner, or in-house counsel with a good track record and institutional knowledge of the organization’s culture and its client base has a good chance of being given time to climb the learning curve. In many cases, the ideal scenario for both the firm/company and the re-tooling lawyer is to make the transition within the organization.
In my next blog posting, we will continue the discussion including the following topics:
- Obstacles to overcome
- How to prepare for a transition
- High-growth practice areas
