The last couple of years have been a wild ride for lawyers and law firms. Remote work, the downright hostile hiring market, and economic change have combined to make life interesting.
And now, just as we are talking about record-high associate pay, the new talk on the street is recession. So, are you ready for the next twist on the rollercoaster ride?
Preparing your career for recession requires one thing: clients. If you have a strong book of business, you determine the course of your career. Whether a good year or a bad one, firms always need somebody who can bring in business.
Rainmakers shouldn’t have bad years.
The End Is Nigh
Earlier this year, associate pay hit a new high, breaking the $200k mark, while law firms scrambled to figure out how to retain associates and support partners.
In fact, not just associates but everyone involved with law firms have been asking for and receiving pay increases because of a higher cost of living and increased workloads.
According to law.com, Amlaw 200 firms grew revenue by 9%, and Amlaw 100 firms grew revenue by 15% last year, the largest year-on-year increase in a decade.
This does not sound like a recessionary environment.
However, inflation is at a four-decade high, interest rates are rising, and the stock market is firmly bearish, which all point to some level of slow down.
We’ve even seen the first whisps of layoff storm clouds as mortgage companies have begun laying off brokers.
Economists, pundits, and anyone else with a microphone and camera have begun to cry recession. Historically booms have led to recessions, and central banks almost always overshoot their targets when increasing interest rates.
So this could well be a turning point: the beginning of the end of good economic times.
Or Is It?
Of course, one reason inflation is high is a tight labor market, which seems to remain tight. Mortgage lenders are laying people off, but everyone else seems busy.
Apparently, nobody told buyers that the housing market was cooling off since median home prices still rose 20.4% in April (down from 20.6% in March, but that decrease seems more like a rounding issue than a headline).
And a raft of new Supreme Court decisions, including Dobbs v. Jackson Women’s Health Organization but also others, have introduced new issues into the legal system.
So, maybe the legal recession isn’t looming quite so close on the horizon.
The economy is out of your control – your career isn’t
I have no idea whether we are heading into a recession or not. I can see arguments on both sides. I hear the pundits and understand the logic, but I know one thing for sure: predicting the economy’s future is a tough game.
Predicting how well a lawyer will do in a down economy, well, that’s easy.
When and if a recession comes, many lawyers and law firms will complain about the economy. We’ll talk about belt-tightening, cutting costs, and doing more with less. Instead of how to manage the workload, the conversation will shift to how to find work and stay afloat.
Many will complain, but many others will not.
You can’t control the economy; it will do what it will do. I don’t know when the next recession is coming, but it will come. There will also be another boom. That is the way of the economy.
Your career, however, shouldn’t be dependent on the economy. With the right effort and focus today, you can prepare your job for the inevitable tomorrow. The law will always be around, lawyers will always be in demand, and you must ensure that you are one who does well in any economic environment.
How to recession-proof your career
If the economy is good, law firms need lawyers who can bring in business to grow and take advantage of the good times.
If the economy is bad, law firms need lawyers who can bring in business to weather the bad times, pay staff, and maintain relevance. For some law firms, a recession is a great time to grow as the market consolidates around stronger players.
So, the way to recession-proof your career is to be the one who brings in business, be the rainmaker.
Rainmakers do well in any economic environment. Whether the economy is going up, down, or sideways, firms always need rainmakers. When you have a book of business, you call the shots.
Successful, rainmaking lawyers should always be happy and feel their firms’ support.
The degree of support, happiness and shot-calling power depends on the size of your book of business. The larger the book of business, the more control you have.
To value your book of business, consider both the value of your clients, the portable business you can take with you, and the value of the potential business a new firm may allow you to develop. (Read more about valuing your book of business here).
Even if your book of business is small, you will have some protection in a down economy.
But consistent effort over time will grow your business. Keep in touch with your clients, develop relationships, follow up and be there when they need you – these actions will all serve you well.
I’m not an expert on building a book of business (though I can put you in touch with one if you’d like, just contact me here; my expertise is in helping lawyers with a book of business find their exact right perfect firm (regardless of the economic environment).
However, I have found that finding a way to keep in touch with people that works for you and doing this consistently, no matter what, over time, yields impressive results. It’s a bit like compound interest, it doesn’t seem like a lot at first, but your efforts compound over time to create a solid client base.
And once you have a solid client base and a reliable book of business, you will never have to worry about the economy again.
How to recession-proof your firm
My focus is mainly on lawyers – but I have also seen the same advice work for firms.
In growth environments, it is easy to take the focus off of the future and think that the good times will continue forever.
But they won’t.
So, what do you do if you manage a law firm and are concerned about a recession?
First, treat your rainmakers well. Remember, they have options, so keep them happy.
But you should also encourage more rainmakers. Help associates learn how to become rainmakers and teach them how to network and connect with clients. Support partners with smaller books of business with tools, marketing, training, and time to connect with clients and potential clients.
Support your rainmakers, help them develop, and create an environment where they feel welcome. You will end up strengthening their negotiating power, but that strong negotiating power also means that they are doing more for the firm. So you should do everything you can to encourage rainmaker growth.
If you don’t, you may end up with an exodus at precisely the wrong time.
Successful Lawyers Deserve to be Happy Too
We believe that successful lawyers should enjoy their career and their lives. We are passionate about helping rainmakers find their exact right perfect fit firm, and we do this in any economic environment.
No matter what is happening in the world, if you have a book of business, you have power and opportunity. So if you don’t have that book of business, I recommend working on it.
If you know you are ready for a switch and would like more from your career – we are here to help. You can contact me here; I’d be happy to spend a few minutes discussing your options. You may also want to download our business plan template here; whether you are looking to move or just want to take control of your career, this is a great place to start.