Is there an impending crisis for major law firms?Posted on Friday, October 12th, 2012
In a recent segment from Bloomberg Law, law firm consultant Bruce MacEwen has charged that the legal industry is currently facing an “excess capacity.” As a result, MacEwen contends many firms are facing enormous pricing pressure and are engaging in “suicide pricing” in order to cover fixed costs and get revenue in the door.
MacEwen paints a bleak picture for Big Law, hypothesizing that as legal process outsourcers (LPOs) become increasingly prevalent, significant attorney layoffs could be on the horizon. And, with LPOs expected to grow by as much as 85 percent in the next few years (accounting for up to $4 billion in revenue by 2014), this poses a potentially serious problem for larger firms.
MacEwen suggests the problems with major law firms are largely structural, and although “somewhat isolated at this point,” the legal industry is going to need to “restructure itself in ways that aren’t on anybody’s radar today.”
You can see the entire interview below:
What do you think? Is there cause for concern in Big Law, or is MacEwen being overly pessimistic?