Yesterday, the AmLaw 100 Annual Financial Survey came out, and it offers an interesting picture of where the bigs are and perhaps where the industry is going.
I also listened to an ALM webinar yesterday in which there was a fascinating discussion about the findings among Nick Bruch and Dan Packel, two ALM reporters and Gina Passarella, Editor-in-Chief of The American Lawyer. One of the big topics of discussion by the panel: what happens if and when there is a recession.
Here are some takeaways from the data and the discussion and then some of my predictions.
First, the glass is half full: the AmLaw 100 saw another year of growth both in revenue (8%), profit (6.5%) and the all-important profits per equity partner (PPP) (6.5%). All of these numbers were better than last year. The top 10 of the AmLaw 100 had even better years.
The glass is half empty: the data may mean hard times if or when we have an economic recession.
The glass is half empty: the data may mean hard times if or when we have an economic recession. Law firm financials to some extent follow the overall economy, and when the economy goes sour, change happens: the most significant downturn and, I daresay, change maker in the legal profession that we have ever known occurred with the Great Recession in 2008. So what do the numbers tell us, if anything, about what could happen in the next recession?
The Next Recession
First, as Nick Bruch, one of the more astute observers of the legal marketplace, put it, 2018 could have been and should have been a better year than what it was. Nick’s view is that we may be close to the peak of economic expansion and that a recession is on the horizon.
