American Lawyer Media released its early 2011 Economic Confidence Survey and law firm leaders are significantly more confident than they were only 6 months ago.
Cost saving trends between August 2010 and February 2011:
- The number of firms intending to move to less expensive vendors is decreasing
- More firms will continue to cut business development spending
- Layoffs have reduced but pressure to control salaries and bonuses increased.
- Pressure to reduce summer associate program spending is easing up.
Biggest economic challenges include:
- Cross-selling to existing firm clients
- Responding to cost pressure from clients
- Pressure to use Alternative Fee Arrangements
Hiring Compared to August 2010 more firms intend to hire attorneys, but staff hiring appears to be stalled. There is no indication that there will be an increase in staff layoffs.
Profits Per Partner: Partner morale regarding profits per partner increased almost 20% from August with almost 68% of respondents expressing optimism about 2011 profits per partner.
Implications: While this is reassuring news, the lessons of the recession should not be forgotton. Since clients are continuing to be economic pressure on billing arrangments, we will need to continue exploring content licensing arrangements which improve the value proposition for both the firm and clients.