Now that several years have passed since the financial meltdown and the raft of forecasts that the legal industry would transform, did it? No, not by any means. Quite a few observers of the law scene thought the cost pressures of the recession would force major changes of management practices. Why that crisis-spawned revolution never upended relationships between law departments and law firms deserves reflection. To that end, this article first notes how key benchmark numbers stayed stable during the post-crash years, and then offers four reasons why the business of law continued pretty much as usual: technological, financial, managerial, and psychological.
The General Counsel Metrics benchmark survey, the world’s largest, collected 2009 and 2010 staffing and spending data from more than 1,000 law departments. At one point, 60 of them had provided data both years (40 of them U.S. companies). Despite the sharp downturn and the trumpeted opportunity (or perceived necessity) to redefine law department management and operations, this large sample of U.S. law departments maintained very similar ratios of lawyers per billion dollars of revenue. Layoffs weren’t dramatic. Indeed, they barely happened since the average difference between the 2009 and 2010 figures was less than 1 percent. After all, law departments could choose to handle inside some work that might otherwise have gone to outside counsel and thereby preserve their ranks.
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