The new year is the time when newspapers' crystal ball-gazing reaches its annual peak. It's also the time of year when I'm asked what I believe the story for 2008 will be.

As offices reopen across the country, the rather gloomy January weather has been matched by a plethora of unsurprisingly bleak economic forecasts. Take the Financial Times on 2 January. Not usually one for hyperbole, its front page screamed "Worst outlook since dotcom bust" following its annual survey of leading economists.

It's clear we have not heard the last of talk of sub-prime mortgages, credit crunches and the nation's scant coffers. But we mustn't conflate gloom with doom, or downturn with disaster. It is notable that the dreaded R-word – recession – has only been mentioned in the context of a flirtation rather than a full-blown affair, so there's no immediate signs of a certain Mr Brown jettisoning his Darling.

This cautious economic assessment certainly chimes with what senior partners have been reporting to me over the last couple of months. But we mustn't overlook the positives. Our profession is better placed than most to withstand what the economy can throw at it – indeed, we are certainly one part of the economy that will continue to help save UK plc from an even greater trade imbalance.

While I suspect the rate of growth of the profession will slow, the profession is unlikely to stop growing. Last year, PC fees increased from 101,000 to 108,000; so if I had to put a figure on it, I predict 2008 will see an increase of a further 4,000 to 112,000 in total – a more conservative growth, but a record number nonetheless.

Part of this growth will result from the continued expansion in the employed sector and I predict the proportion of the profession made up by in-house lawyers will increase yet again by a percent or so. Elsewhere in the profession, there is nothing to suggest many of the key trends won't continue. There will be more headline mergers – but don't be surprised by the odd strategic demerger.

In the legal profession, and the City to be precise, it is clear that Linklaters will continue chasing Clifford Chance to be the 'number one' practice in the profession. In the year of the Beijing Olympics some will no doubt pose the question yet again whether this gold medal should really represent the gold standard for success in the profession.

So how should we measure law firms' success? Is it really all about gross turnover? It's certainly an issue we at the Law Society will be grappling with.

This year – and next, for that matter – will be similar to 2007 in other ways too. With new competition on the horizon, our message at the Law Society is clear and simple: recognise both the new threats and new opportunities. Success will not hinge on size alone. Smaller practices can, and will, continue to be successful.

But once again there's an 'if' – or rather a series of 'ifs': they will be successful if they have good strategic focus; if they have good leadership and management; and, above all, if they possess the right attitude and energy.

On the legal aid front, I predict the Legal Services Commission will come a cropper. In 2007 it didn't understand, didn't listen and didn't consult, together with exhibiting a staggering ability to make a mess out of anything and everything. At some stage in 2008 this will surely change. The Commission will be forced to seriously rethink its attitude and to negotiate properly with the Law Society. If so, it will be welcome – and not before time. But budget constraints will continue and life will continue to be extremely tough for Legal Aid practitioners.

I believe diversity and environmental sustainability – thanks to the Diversity Charter and Legal Sector Alliance respectively – will move higher still on practices' agendas. The Law Society will continue to play a pivotal role in both these areas and as we enter our third year as a fully representative, member-focused organisation, I am confident more and more solicitors will benefit from our work through ventures such as our International Division and our Sections for dispute resolution, probate, property and law management.

We can certainly expect vigorous debates from different sections of the profession in 2008. We are an increasingly young profession and I know our new Junior Lawyers Division will flex its muscles, campaigning for students, trainees and the newly-qualified alike. One easy prediction is that its talented and energetic chair – Kat Gibson – will be a feature in the pages of Legal Week for years to come.

This year will see the Association of Women Solicitors celebrate their 85th anniversary. The profession has come a long way on all areas of equality and diversity but, sadly, in some firms the reality still fails to match the rhetoric. Are we as a profession doing everything we can do to smash each glass ceiling at every level, in every firm? Or are we merely scratching the surface?

The truth probably lies somewhere in the middle. That must change. In a more competitive legal market we simply cannot afford to lose out in the fight for talent. Good diversity policies and good business go hand-in-hand.

I am sure that if any of my predictions are wrong I shall be the first to hear about it. Well, someone once said "If in doubt, obfuscate" so by means of disclaimer my final prediction is "expect the unexpected".

Vacuous? Definitely. But top of my New Year's reading list is the Alan Greenspan bestseller The Age Of Turbulence, which charts events in 2030; the final chapter is titled 'The Delphic Future', so if it's good enough for the former Chairman of the Federal Reserve…

I wish you all a prosperous and, above all, happy new year. And one last prediction – the trains won't get any better.