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Survey Confirms Major Law Firms are Increasing Their Use of Contract Lawyers

December 2, 2010

The American Lawyer reports in its article out yesterday, Law Firm Leaders Survey 2010 – The New Normal, that “the changes implemented during the recession–smaller associate classes, postponed start dates for new hires, reductions in the equity pool, and scaled-back profit expectations–are here to stay, at least for a while.” This includes more partner layoffs, and the increased use of contract attorneys.

They base this prediction on their 2010 Survey of Leaders of Am Law 200 firms. Among many cost-saving measures that firms implemented in 2010, the survey found that the use of contract lawyers increased.

A little more than half of our respondents (55 percent) said that their firm had used contract lawyers, up from 44 percent a year ago.

The ABA article on this same topic, BigLaw Partner Cuts Aren’t Over by Debra Cassens Weiss, also stated that “many firms are apparently making up for reduced associate numbers by shifting work to temporary lawyers.”

The survey also found the following:

• 87 percent of respondents said that 2011’s incoming class will be the same size or smaller than their (usually already reduced) 2010 class.

• 60 percent of respondents said that the downturn has produced a fundamental shift in the legal marketplace.

• 70 percent of respondents said that they plan to ask partners to leave in 2011, and 31 percent said that their firm plans to deequitize partners.

• 46 percent of respondents said they deferred first-year starting dates in 2010, but only 17 percent said they anticipate doing so in 2011.

• 91 percent of respondents said that their firm used a flat fee for entire matters in 2010, compared to 82 percent in 2009, and nearly 93 percent said that their firm used a flat fee for some or all stages of matters last year, up from 78 percent.

• 47 percent of respondents said that clients have refused to pay for work done by first- or second-year associates—a development that is part of clients’ strategy to shift economic risk back to law firms.

• 85 percent of respondents said that more clients are requesting discounts.

• 41 percent of respondents said that they expect their 2011 profits per partner to rise by 5 percent or less—lower than the 8 percent and 9 percent increases common during the boom but better than 2009’s flat result.

While things still look a little dismal in 2011,  there is still hope.  “About seventy percent of respondents said that they were somewhat optimistic about 2011, and 10 percent said that they were very optimistic.” And for attorneys choosing to leave their firms to do contract/freelance legal work, given the results of this survey, things are looking very optimistic for 2011!

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Filed Under: contract attorney, partner layoffs, recession

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