Due to the rapidly deteriorating economy, many legal firms found themselves dangerously over-capacity in late 2008 and much of the year in 2009. A recent article featured in the National Law Journal presented survey findings from the AM 250 regarding the number of lawyers lost or gained over the past year. The findings concluded, “The total number of attorneys working at the top 250 law firms plunged by 5,259 lawyers. Put another way, it’s as if all of the lawyers working at two firms the size of Jones Day vanished in 2009.”
As significant as this figure is, it doesn’t even include the number of legal support personnel impacted by the economic slowdown.
To manage global litigation and economic volatility, it may be a strategic consideration for law firms to develop more “on-demand” models. Designing an “on-demand” model allows the law firm to push the volatility of their fluctuating legal services onto an outside vendor. Due to their diverse client base, vendors are better prepared to handle variability by using the principle of diversification.
Leveraging the same principal of diversification, law firms often act as an outside resource to assist internal corporate legal departments better manage work overflows. As such, why should law firms absorb all of the variability risk of their clients?