Monthly Comments
| Law firms aren’t worth much. Lawyers who start and build a legal practice are often surprised to learn that there’s no buyout waiting. Firms almost always pay nothing for their acquisition targets. The acquiring firm assumes liabilities, signs a new partnership agreement, and lives on. Law firms have no value because when they depend on the owner/principal partner. In the case above, the partner brought in the business and owned the client relationships, so without him, there was no firm. So there was nothing to sell. The alternative is to build a legacy. Designing your legacy is an often overlooked or procrastinated Pillar. But if you want to create options for yourself, it is crucial to start early. Two things make a law firm valuable: 1. A brand that people recognize and that supports the lawyers in the firm. 2. The ability to generate income independent of leadership. Putting these in place starts right out of law school with deciding who you want to be, how you want to be perceived, and what you stand for. It ends with options when you arrive at retirement. A last-minute fire sale never ends well. If you haven’t set the firm up to work without you or prepared the next generation of lawyers to take over and pay you residual payments, you run the risk of ending up with nothing. Plan early and give yourself options. Far too often, lawyers face painful decisions at a time in their lives when they should be enjoying the fruits of their labor. But with early planning, almost anything is possible. So, don’t wait until it’s too late, read more here about how to Design a Legacy. |
Hottest Geographies at the moment:
This hasn’t changed much in the last year, and I don’t expect it to change much this year.
However, in April 2024, San Diego seemed to be re-emerging as a hot market.
- Warmer Climates
- Lower Cost-of-Living Climates
- Secondary Markets
- Florida
- Charlotte
- Raleigh
- New York
- Washington, D.C.
- Texas
- California
- Seattle
- West Coast
Hottest Practice Areas
We’re seeing fewer stories about reducing headcount and more stories about talent scarcity, so the focus seems to have shifted back to growth. Group hires are popular; some think that single lateral partners may not be as effective as a group, and acquiring a full company has risks (6/24). I’m also seeing more about the “heating up” lateral market, but I don’t know when the lateral market is not hot… (6/24).
Some interesting Headlines:
July 2024: Where Lateral Hires are Surging
The 2024 AmLaw 100 Ranked by Revenue Per Lawyer
Big Law in Sports: Maybe this should be its own practice area. (6/24)
| Practice Area | Gauge | Opportunities | Uncertainties | |
|---|---|---|---|---|
| Generative AI Technology |  | Economic activity/recession – There are also some suggestions that the uptick may not be sustainable. | Impact of AI on litigation. | |
| Corporate / Mergers and Acquisitions/ | | M&A seems to be back; we’re seeing many articles suggesting that M&A is strong, such as this one from law.com, this one on the private equity market, and another on M&A rebound. From March 2024, energy and pharma driving M&A. April 2024: Mergers and Acquisitions in 2024 a Cautious Recovery with Strategic Shifts July 2024: Recruiting increases based on increased PE activity. | M&A seems to be back; we’re seeing many articles suggesting that M&A is strong, such as this one from law.com, this one on the private equity market, and another on M&A rebound. From March 2024, energy and pharma driving M&A. April 2024: Mergers and Acquisitions in 2024 a Cautious Recovery with Strategic Shifts | |
| Capital Markets |  | Capital Markets have been down, especially in the last 18 months, but seem to be strong in the first part of 2024. There is some speculation that concern around election shocks is driving current activity. This seems to especially be true in terms of business coming from Latin America. More activity in venture funds (6/24) | Impact of US elections on capital markets – some concern that the election could disrupt the market. | |
| Funds Lawyers and Finance | | Demand for funds lawyers is up all over; if you can retool as a funds lawyer, this is an area with sustained demand. Finance is a little less clear: it seems that it is steady. Interesting thoughts on how structured finance is becoming more important. (6/24) | ||
| Energy | | While many corporate practices have been down since 2022, the energy market continues to be strong, with many deals proceeding. If you focus on a down market and are looking for opportunities, retooling for energy may be a good move. This seems to be at least partly driven by the Inflation Reduction Act money. | The long-term impact of the Inflation Reduction Act. | |
| Bankruptcy | | We expected bankruptcy to be strong in 2023, it wasn’t as strong as we expected. In the first quarter of 2024 it has been stronger than expected, but with interest rates likely to decrease, and inflation under control, we expect bankruptcy to moderate. Of course, there’s this article on how O’Melveny is expanding its bankruptcy practice. Bankruptcy filings (March 2024) Another firm is expanding their bankruptcy practice (March 2024) | What will happen to interest rates? | |
| Labor and Employment | | Years ago, this was a slow and steady practice, but it heated up with the COVID shutdown. It remains hot, with employees not wanting to return to offices, layoffs with companies experiencing the recession, and general uncertainty in the labor market. | The impact of the recession on the labor market. | |
| Litigation | | Expecting to see an uptick in litigation because it is a counter-cyclical practice. As deals go bad, we’d expect people to sue over these deals rather than move to the next one. We are starting to see some improvement and greater demand for litigation. Also, many court closures created a backlog of cases, and as courts catch up, this has created demand for more litigators. April 2024 Article showed a huge uptick in Antitrust Litigation IP Litigation busy (6/24) | If clients experience a recession, they may not want to pursue expensive litigation. The impact of a recession, therefore, is an uncertainty. | |
| Commercial Real Estate |  | Real Estate is off everywhere at the moment because borrowing money is expensive, and the direction of interest rates is unclear. Sit back, build your book of business, and be ready for the next wave. Real Estate is not down in Florida… one of the few exceptions to the rule. | The future of interest rates. | |
| Environmental Social And Governance (ESG) and Regulatory | | Regulatory practices are strong across the board – if you feel that your practice is threatened, look for an opportunity to retool as ESG. 2023 got hit with banking crises and climate change legislation. We like the insights from this article from March 2024, it suggests that ESG will stick around even in the face of political uncertainty. | Political impact on ESG programs and future. | |
| Intellectual Property | | Bio-Tech was up at the beginning of the pandemic, and it continues to be sought after. There is a lot happening in electrical engineering, computer science, and pharma/biotech seem to be the busiest areas right now. Patent litigation has been very busy. | Some suggestions that firms are reducing IP staff – but patents still seem very strong. (December) | |
| Privacy and Cyber Law | | Continues to be very active, and sources tell us that this is an opportunity for the future. If your corporate practice is down, consider a CLE in Healthcare. | ||
| Healthcare | | Continues to be very active and sources tell us that this is an opportunity for the future. If your corporate practice is down, consider a CLE in Healthcare. | ||
| Cannabis | | Everybody says that there is an opportunity in the Cannabis market, but we aren’t seeing it so strongly. | ||
| Lobbying | | News suggests that Lobbying is hot right now, a function of divided government and an election year… this is a good time to be a lobbyist! |