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WHAT WE'RE WATCHING

UNDER PRESSURE - Client demand = good. Client demands = maybe not so much. As Law.com's Jessie Yount and Hugo Guzman report, corporate legal departments and other law firm clients are becoming increasingly assertive about the need to boost efficiency and control costs—adding another layer of challenges for law firms already wrestling with a sharp drop in deal work and other economic pressures. In-house departments are demanding more for less from outside counsel. From fixed-fee arrangements to more efficient staffing, general counsel want law firms to offer more choice and flexibility and potentially share in more of the risk. With economic and client pressures escalating, some law firms in recent weeks have unleashed a range of austerity measures, from pausing hiring and deferring associate classes to relying on performance reviews to thin attorney ranks.

IT'S ALL GONNA COME TOGETHER - Small and boutique law firms have helped drive an increase in legal industry combinations this year. Going forward, Law.com's Andrew Maloney reports, merger activity is expected to be robust heading into 2023 amid rising fears of a recession as well as some law firms reigniting talks that were paused during the pandemic. Overall, law firm mergers still remain below average, analysts at Washington, D.C.-based Fairfax Associates wrote this week. The group tallied 12 completed law firm mergers in the third quarter, with 37 total mergers through 2022. That's more than last year's count of 33 at this same point in time, but below the 10-year average of about 44 through the first three quarters of the year. But after a "surprisingly quiet" start to the year and plenty of economic and geopolitical uncertainty through most of 2022, the analysts were optimistic that combinations would rise, saying interest in mergers remains high across the industry. "We expect to see additional mergers announced in Q4 (although some may not be effective until 2023), and robust activity into next year," the report stated.

ON THE RADAR  - Hyundai Motor America and Kia Motors were slapped with a consumer class action Monday in Minnesota District Court over the ignition systems of certain vehicles. The case, brought by Hellmuth & Johnson, asserts that the systems are 'hackable' by malicious third parties, leading to a 'nationwide rash' of auto thefts. The suit further claims that there are tutorial videos posted on social media which demonstrate how to bypass the vehicles' ignition systems. Counsel have not yet appeared for the defendants. The case is 0:22-cv-02431, Hilliard et al v. Kia America, Inc. et al. Stay up on the latest deals and litigation with the new Law.com.   

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