On 7/8/2013, legal strategy advisers Altman Weil released their 2013 report of United States Law firms. Altman Weil conducted the report in March and April of 2013 and polled managing partners and chairs at 791 law firms with 50 or more lawyers.
Among the most surprising of the trends identified by the company is the fact that mergers among U.S. law firms for the first six months of 2013 have reached their highest number since 2008.
In addition, Altman Weil reports that law firm leaders are aware of many changes the legal profession is facing including "pricing pressures from clients" and "the competitive forces of commoditization and the emergence of lower priced, non-traditional service providers." In order to meet these changes, 65% of firm leaders reported that they have attempted to lower their overhead cost, pricing, and business structure. However, only 30% of law firms show a net reduction in overhead costs as compared to a 69% reduction in 2010.
The information contained in this report echoes must of that I learned in London this summer. While the biggest of the budget constraints in legal have likely passed as the economy has slowly recovered, law firms are still expected to offer leaner services. The Economic Crisis of 2007 forced law firms to offer more competitive prices. Since that time, firms that have been able to respond are now beginning to absorb smaller firms that- pre 2007- may have survived. The legal market in the next several years will likely continue to consolidate into the larger law firms identified in the Altman Weil report. However, these large firms must continue to focus on overhead costs and competitive pricing in order to maintain lean pricing for their consumers.
View the full report here.