Edward Poll, The Daily Record Newswire
When lawyers enter legal practice, they understand that certain aspects of what they will be doing will change during their careers. There will be new laws and regulations to become familiar with, new court decisions from which to take emerging precedents. There will also be technological advances, the kind of change that has made once-common law office tools like dictating machines and letterpresses virtually extinct.
However, every law practice undergoes far more fundamental changes than these, ones that affect not just what a lawyer does but how a practice actually functions. Such broad changes are generally not anticipated at the start of a practice career, but they can ultimately have the greatest impact. Here are three examples –negative, positive and neutral — of this broader, fundamental change.
Negative: Economic Conditions
We continue now into the fourth or fifth year (depending on your measurement) of what can only be called a depression for the practice of law. Many small businesses, the lifeblood of solo and small firm practices, have closed their doors. Many individuals who likewise typically bring a flow of business from real estate transactions, divorces and similar life events have had to postpone these events because they could not afford either them, or a lawyer’s services to help with them.
These same economic conditions have had a negative impact on many lawyers of Baby Boomer age, who not long ago pictured themselves nearing retirement but now must remain in practice because their retirement savings have shrunk so dramatically.
Positive: Economic Conditions
Paradoxically, the tough economic times have created significant opportunities in certain practice areas, such as bankruptcy law.
The housing market collapse has led many people to seek legal help to avoid foreclosure on their homes; granted, some states have banned lawyers from accepting retainers for doing this work, but the work itself still exists. Politicians at every level are busy passing laws to “fix” the tough economic conditions (run down the list — healthcare, labor law, tax law and much more), creating more causes of action for which clients need advice.
And there is one more change that is positive for some firms: as frightened lawyers look to sell their practices at any price, those law firms that are well run and free of debt will also be positioned to take advantage of many opportunities to be offered by purchasing these practices.
Neutral: Practice Planning
The uncertainty and opportunity created by economic conditions increasingly changes the way lawyers look at the future of their practices. Despite the belief of some lawyers that they will never be able to retire but must instead “die with their boots on” in practice, others at least consider the need for practice planning: an estate plan to provide financial security, a succession plan to sell or otherwise transfer the practice, and a retirement plan for life after practicing law.
The net effect of this change is neutral because, while it can save lawyers from sudden rash decisions about their futures, it also forces them to confront their own mortality. No lawyer is immortal, and there is nothing permanent in the practice of law or in life. Coming to grips with that is difficult, but in the end is a necessity that few, if any, lawyers think about when first hanging up their shingles.
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Edward Poll, J.D., M.B.A., CMC, is a law practice management thought leader and contributor to this publication. His website is at www.lawbiz.com.
