Our economy is in the doldrums … or better said, we’re experiencing a depression. Signs abound. From unemployment exceeding 10% and more in some areas, to now thousands of lawyers and staff terminated from the large firms. Who knows how many more there are in small firms …
One large firm managing partner cited an even more frightening fact: Many lawyers have been given generous severance packages in order to obtain liability waivers/releases and to keep the goodwill of those departing. In other words, they won’t feel the impact for 6 to 12 months after leaving. We will see a ripple effect. As bad as it is now, it will get worse …. Unless the federal government is able to pull the rabbit out of the hat.
Our country was built with credit. One of the major thrusts for the Obama administration is to get banks to start lending again. Banks didn’t do this with the first half of the major funding passed in the Bush administration. They horded the money to protect their own balance sheet. Will they do it with the second half, and with other bailout handouts?
Today, I had a conversation with a banker. He said that the federal regulators are requiring a higher capital input from the buyer than ever before. "In the old days" (not that long ago), one could buy a building for very little down payment (10%, e.g.), Today, loan to value ratio has to be 30% and in many cases 40 and 50% This is not the way to growth.
With this type of stagnation of credit, one can be assured that the prices for real estate will continue to slide downward with ever greater consequences. And with continued worsening of our finances, law firms and lawyers will be further impact. If we have too many lawyers today for the work available (as discussed in an earlier post), demand will continue to shrink, and additional law firm layoffs will result.
In this morning’s session of large law firm managing partners, a group I’ve facilitated for more than 10 years, I heard hand-wringing I’ve never heard before. September 2008 was a watershed benchmark for revenue. Since then, revenues have decreased each month for many of the firms. There are only occasional rays of hope in certain practice areas. There seems to be a significant excess supply of lawyers. This is a significant change. As one lawyer cautioned, though, when the paradigm shifts again (as in the past), there will be an inadequate supply of experienced lawyers available to meet the demand.
How do you see the future both for the profession as well as for your own practice area?
Wearing the Bruins logo, I "trucked" up a canyon in the Buellton, CA area last week. It was a great riding week.
Pushing oneself to improve is the essence of our journey here. Helping others is the essence of being a lawyer. And continuing professional education enables us to be better qualified to help others. In one survey after another, staff have said that they make job decisions, all other things being equal, based on the availability of paid education support by the firm for staff as well as for lawyers.
Think about what skills your staff should have to better serve your clients; how can you provide more education to your staff to enhance these skills?
Years ago, a good friend, Denis Campbell, allowed me to interview him. He was an expert marketing director at a major law firm. His topic, titled Five Cards and Three Feet, was the inspiration of this week’s vid-cast.
I recently returned from a week in the Santa Ynez Valley, CA area. The purpose of my vacation was to ride a bike with 35 others from around the world who were similarly enthusiastic about cycling, plus coaches and staff. The Amgen Tour of California started in Northern California and went south, passing through this area (Solvang, Los Olivos and surrounding communities). I watched the Tour’s time trial held in the valley. It was exciting to see Lance Armstrong and other elite cyclists pitting themselves against the clock to see who was the fastest.
Armstrong finished 12th in the time trial, one of his specialties before retiring 4 years ago. And he finished the overall Tour in 7th. In other words, in two races he’s entered (the other last month in Australia), he’s finished in the top 10 … after only a few months of training … and 2 competitive races! And he is 37 years old, an age past which most cyclists are not seen in competition. What a remarkable achievement.
From a psychological perspective, the man is unhappy at not finishing higher up the ladder, because he has such high expectations of himself. He has to continually be coached to greater success as well as to recognize his progress, to keep reality in place. His plan is working and is on target.
Trust the plan. Work the plan. Good advice for Lance Armstrong, a winner in all respects. And good advice for lawyers wanting to achieve greater success.
Prepare a plan. Work the plan. Trust the plan. Make adjustments where and when appropriate as you progress through the benchmarks of your plan.
I’m in Cycling Camp this week, a camp run by Chris Carmichael, the former and current coach of Lance Armstrong. This is my 6th year at the camp … a remarkable experience, run just like the pros.
Today, we rode in the rain and cold, just like the pros did in the Amgen’s Tour of California. Being from Southern California, it was particularly hard for me since we have so many warm, sunny days – so few rainy days that I stay in when it rains. Even had to go out and buy rain gear!
But, it’s great … the people are outstanding professionals who understand their customers pleasure in cycling and do everything in their power to address the wants and needs of the customers. Boy, what a lesson lawyers could take from this experience.
When it’s time to separate from your spouse, do you think of the cost of doing so? Certainly in community property states, one must. But, a New York firm has gone the extra step in removing the cost of lawyers out of the equation. 60 Minutes Divorce! A brilliant marketing tactic … and one way to seize an opportunity offered by the sour economy.
