The most seminal message of this chart can only be that “something happened” around 2008. As noted near the top of this piece, it was rather an achievement to have a down year in the decade before the great financial meltdown and even more of an achievement never to have one in the decade since.
And what, you are now entitled to ask, would be the point here?
- Whatever happened to Law Land in 2008 did not affect the rest of the economy or, I would wager a fair amount, to any other industry of our scale. (I don’t count sectors targeted by photon torpedoes from software doing what it does, eating the world, and the digitization of everything, and while we’re at it count your blessings that we’re not all in the newspaper industry.)
- The undeniable growth headwinds we’ve been facing since 2008 have been agnostic across essentially all firms; sure a few have failed entirely, usually due to voluntary overdosing on performance-enhancing drugs like debt and promiscuous lateral partner guarantees, but again, you almost had to work at it to find your banker turning the lights out.
- Like any competent detective or devotee of mystery novels, one can often do worse in approaching an unexplained event to rule out what did not happen. The economy did not do this to us. It was healthy in Period 1 before and it’s been healthy in Period 2.
Here’s really the point:
Every time new AmLaw (or NLJ or Global XX) results are released, you can hear the sights of relief that performance overall was pretty solid, so really what’s all this talk about client fee pressures, NewLaw and alternative service providers, growing in-house sophistication, online subscription self-service platforms (from LegalZoom for good old people up to offerings from the Magic Circle for global i-banks’ derivative desks),.and those over the horizon (way over the horizon, the senior crowd not very secretly hopes) more amorphous threats like the Big 4 and AI. Perhaps people mean their message to be reassuring, but for me at least I fear it tends to be heard as a counsel of complacency.
The burden on them, if I may be so bold as to suggest how they write their next pieces on this issue, is to explain why the last 10 years have not looked exactly like the first 10.
To me, this deep dive into the macro data leads to the inescapable conclusion that something profound changed for Law Land ca. 2008. It wasn’t episodic, it wasn’t a temporary recession-induced swoon, and it hasn’t gone away.
You often hear founders of NewLaw companies remark that the Great Meltdown was the greatest thing that ever happened to them. Do they know something we seem inclined to look away from?