Persistence of the Economic Downturn Forces a New Legal Landscape

downtown_atlanta_usa.jpgThe past few years have brought significant changes to the legal industry in the US. The recession has forced law firms to reduce costs to stay in business. Just behind reducing staff, cutting back on real estate ranks second in efforts to creating cost efficiencies for most firms. For larger firms, the reduction in office space leased can contribute large savings to the bottom line over many years. But, not all firms have million dollar real estate agreements. Smaller firms are relying on a new way of doing business to survive. And eventually, as opportunities to reduce overhead diminish, even the largest firms will be forced to adapt.
As the economy faltered, relationships between law firms and their clients began to change. Many clients were no longer willing or able to pay top dollar for routine legal activities. Cost is king in the new legal landscape of the recession and many clients are now interested in different types of arrangements to obtain the legal counsel needed. Bartering services, for example, so that no money changes hands between parties, is becoming more common. Clients may be unable to pay for legal services, but the need for these services has not diminished.
This situation is similar to what the healthcare industry suffered in the US as the recession of the 1990s took hold. Patients, unable to pay, still showed up at hospitals in need of urgent care. As the recession deepened, premium healthcare providers were not able to continue with pricing that excluded the bulk of the US population. The result was a shift in how healthcare is managed and obtained. With changes to insurance, individuals were asked to manage their own care as cost was assigned to these individuals. For some underinsured patients, the only solution is to look for healthcare overseas, where costs savings of 30% or more can be founds.
This may be where the legal industry is headed. When the economy was strong, the cost of healthcare and legal services was never questioned. These were must-haves, at any cost. As the economic downturn persists, cutting legal expenditures is on the hit list, even for the largest corporations. Web-based legal services and cookie-cutter programs can help companies and individuals defray legal expenses. But, just as with healthcare, the long-term effects of this strategy may backfire on even the most conscientious consumers.
In 2010, Elaine M. Russell created www.LawSpaceMatch.com, a service that matches lawyers seeking to sublet space with unoccupied office space at compatible law firms around the country. Elaine M. Russell is a corporate and business attorney representing clients throughout Georgia. Elaine’s office is located in the Buckhead section of Atlanta.
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Taken from: The legal industry’s changing environment: Permanent or temporary?