It’s going to get rough out there again. More and more experts are forecasting that 2013 will be a very tough year.
It’s going to be tough for everyone: that means it’s going to be tough for us.
The Crystal Ball
We’re going to see more big law firm failures.
We’re going to see layoffs in greater numbers (again). We’re already seeing the stealth layoffs that take place without an announcement.
This guy does a good job of telling the tale:
Those laid-off lawyers become our competition: you’ve heard that story before.
Law schools, while starting to reduce class sizes, aren’t yet reducing the number of graduates. That will take a couple of years.
Clients aren’t—and won’t—be rolling in dough they can use to pay us. It’s rough for them as well.
It’s already challenging, and it’s going to get harder: get ready.
How to Deal with the New Reality
Many of us had hoped the economic changes were a blip and not part of a larger trend. We’re now years into this blip. Turns out it’s a trend. It’s getting worse, not better. It’s not going to turn around for us.
Does that mean all is lost? Does it mean that we should close up shop and go home?
For some of us, that’s exactly what it means. For those who can’t adapt, you’ll see your margins shrink and your debt increase, and the trend lines will run straight into the ground.
However, for others, it won’t be the end. It’ll just be different. You’ll adapt to changing circumstances and come out on top.
The recession, which officially ended in June 2009 (more than 3 years ago) didn’t mean everyone lost. Some businesses declined, while other businesses grew. The winners bought into the new reality. Remember all the discussion about the boom in “affordable luxury” for low-end product manufacturers? A bad economy killed some law firms, while others (bankruptcy practices, for instance) boomed.
Your Survival Kit
I’ve been speaking to lawyers all over the world about the forces at work that require us to be lean, nimble, efficient organisms. We need to adapt to the changing situation. What worked yesterday isn’t working now, and it’s not going to work tomorrow. We’re not going back. This is the new normal.
What are you to do? How can you survive?
You’ve got to do three things:
- Eliminate the marginal players. Got a partner, an associate, or a staff member who’s not cutting it? Fire that person today. Buh-bye.
- Cut your real estate quickly. Once you’ve cut the dead weight from your team, real estate is the next big expenditure that you can reduce. This is why the working from home thing makes so much sense. When you cut your space requirements, you cut your expenses. Look around and see what you can eliminate. It’s time to cut that monthly rent payment.
- Outsource anything that you can outsource at a cost savings. Outsource legal work, administrative work, technology work, marketing, and anything else. You don’t need these bodies on your payroll if you can find someone outside to take on the responsibility at a lower cost.
Now is the time to become lean. Be ready for what’s coming. Be open to adaptation.
