The death of the large law firm.According to the Hildebrandt Institute, the overall profitability of large law firms have fallen drastically and consecutively for the past two years. In March 2012, Lexis Nexis editors reported that only 22% of 2011 law student graduates were recruited by the Nation’s largest 250 firms. Generally when a company is not profitable, they do not hire additional staff.
The large law firms are generally firms with 250 or more attorneys employed. According to Lexis Nexis (article), large law firms hiring efforts have declined by 5% since 2010. Not only have law firms stopped in hiring attorneys, but many firms have participated in several layoffs and reductions in workforce. “Many firms will continue layoffs” and even larger layoffs are expected, said Kent Zimmermann, consultant for Zeughauser Group. The problem has become so large that websites such Americanlawyer.com have developed attorney layoff trackers. To be considered for this list, firms must engage in severe layoffs or reductions in force within the last year. The death of the large law firm
There are many plausible reasons for the weak performance and decline of large law firms. The impacts of a weakened economy can be one reason. Another reason can be the increased supply of new practicing attorneys. The rising overhead costs in law firms can also be another factor. Lastly, student loan debt could be a result in the need for highing paying jobs which has forced lawyers to other fields in order to meet their monthly student loan costs. In any case, many of these large law firms are in need for restructuring and will continue to do so. The notion that large law firms will continue to decline or downsize is very conceivable. Many large law firms find it profitable to become medium and small in size and scale back to only a few profitable areas of law. The death of the large law firm
Ask men.com (article) demonstarted the supply and demand behind the attorneys and recent market place. “Between 1950 and 2000, the number of lawyers increased from roughly 200,000 to over 1,000,000, according to the Lawyer Statistical Report (2005), published by the American Bar Foundation. This growth rate was far in excess of the overall population growth rate of the country. During the same period, the ratio of lawyers to overall population went from one lawyer per 700 citizens to one lawyer per 280”
Large law firms have been battling this new phenomenal and have been losing. There are more readily available attorneys now. Also, there are attorneys who will perform the legal service for fraction of the cost that a large law firm would be forced to charge you. Therefore, the math becomes simple; the small law firm practitioner wins out. If your looking to open your own law firm, now is the time. The death of the large law firm