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Law Firms - Articles
 
  Gone are the days when simply doing good legal work was enough to make a firm profitable. Following is an article on Nine Important Trends Impacting Law Firm Economics for your review and consideration.  
There are several trends affecting law firm management. Many of these trends are pressuring law firms, making it increasingly difficult for them to remain profitable. And they are forcing firms to rethink their traditional management strategies. Consider these demographic and economic changes:
 

In the last 10 years, the total number of law firms has grown by 50%.

Law firms are also increasing in size. In 1978, only 15 firms in the United States had 200 or more lawyers. By 1982, the number had risen to 36; and by 1987, there were 105 firms with 200 or more lawyers. In 1994, there were over 200 firms with more than 200 lawyers.

The total number of lawyers is increasing dramatically. Ten years ago, there were 540,000 lawyers in the U.S., one for every 418 people. Today, there are approximately 875,000 lawyers, one for every 310 people. By 1996, there will be more than 1 million lawyers, one for every 280 people.

More women are entering the profession. In 1970, there were only 13,000 women lawyers. In 1980, there were 62,000. In 1987, there were 132,000 women lawyers -- a 1,000% increase in 17 years. This year, half the people admitted to law school are women.

From 1985 to 1995, law firm overhead increased 160%.

In the last 10 years, the average starting salary offer for new associates has risen 119%.

Over the same 10 years, the average compensation paid to associates has risen 116%.

Meanwhile, average partner compensation is up only 90% during the same period. And studies have continually shown that net income per partner, in real dollars, has declined.

Today, law firms invest more than 13% of their working capital in computers. Ten years ago, the number was less than 4%. In the future, the capital investment in technology is sure to he an even larger share.

 
   
  Chapters will be added at a later date.