Law firms are about to witness high turbulence in the year 2023. The legal market is witnessing a downside curve as compared to 2021. Although the law firms recorded an impressive growth of approximately 4.2% in 2022.
Even with such impressive growth last year, the legal industry may face challenges that may muddle various facets. This includes the profitability of law firms, surging expenses (inflation), varying client preferences, drastically altering demands, and, most importantly, economic disturbance.
PPEP Strikes Legal Industry
The legal market growth is calculated via various metrics, one of which is Profit-per-equity-partner (PPEP). Our trusted sources mentioned in a report that the legal industry has never shown such a downfall in a decade. Reports also suggest that the overall client demand in the legal industry contracted by 0.1% since last year.
Moreover, law firms in the US and the UK reported a fall in customer demand, especially the large firms, and enterprises. This is a warning sign for large firms as the clients are moving on a cost-cutting strategy amid constant economic downfalls.
The market seems to shrink and this may lead to difficult times for law firms in 2023, especially large-size law firms. The legal industry may witness market shifts, low productivity, diminishing client demands, and surging expenses. This will not just affect the market in terms of client retention, but also push organizations to lay off associates and attorneys in bulk numbers.
Unlike two sides of a coin, the subtle economic downturn will bring opportunities for mid-sized opportunities. With declining client demands, there are high possibilities that clients may shift to mid-sized law firms dumping the big laws. But the big question is: Are mid-laws ready to handle these clients?
The answer lies between the thin lines of automation and legal tech. Even in the choppy waters, it’s crucial to shift to automation for successful law firm management. If you haven’t made a move! It’s time you step up choosing a powerful yet pocket-friendly law firm management software. CaseFox is one such platform offering premium features free in all their subscription plans.
Biglaws Stepping Towards Bulk Layoffs
The global market landscape has witnessed a layoff trend in the legal industry. Legal conglomerates are laying off employees amid the economic downturn. Undoubtedly, with the gradual collapse in legal demand, law firms are finding it difficult to find enough work for lawyers.
Some most renowned names in the legal industry recently announced laying off their attorneys and associates. Several other law firms have clearly stated a “Hiring Freeze” for a few months now. Cooley LLP straight away laid 150 employees on a single day. This combined 78 attorneys and paralegals and 72 business professionals. Last year the firm hired vigorously amid the post-pandemic boom, which now seems to be diminishing.
Not just Cooley LLP, there enters some other biggies as well Gunderson, Kirkland, Shearman & Sterling, and Goodwin. Big Laws have stepped up to perform a stealth layoff. Undoubtedly, there’s something perilous coming up in the next few months. Biglaws are strategizing on survival instinct as the market looks vibrant.
Hold Tight! Legal Industry Getting Windy
Dealing with such a situation is painful, but just answer this! What’s the difference between getting fired and getting laid off?
Layoff means you lost your job due to organizational restructuring which has nothing to do with your work performance. So there’s not much stress to shoulder yourself with. However, if you plan to start solo, We have a great offering that can help you grow faster, even at hard times. Try our law firm management software that serves solo practitioners, Small Laws, and Big Laws.
For more queries and information, we are happy to serve you all around the clock!