Hildebrandt Baker Robbins and  Citigroup’s Citi Private Bank division just issued a joint Client Advisory, which among other things, predicts that revenue (and profits) at large law firms will be flat to ever so slightly up for 2010.

The report also identifies a number of trends observed in 2009.

Hildebrandt is one of the largest and best known business consultancies to large law firms.  Citibank’s Private Bank provides financial services to some of the largest firms in the country.  We’ve blogged about their excellent client advisory reports in the past (e.g., here). 

You should read the entire report, which you can find here.  Also, the American Lawyer’s AmLaw Daily published a helpful summary here.

Among some of its key general findings are:

• Its no surprise that 2009 was a horrible year for law firms, but the report calls it “the worst . . . in at least the past half century.”
• there were some hopeful signs in Q4 2009, but there is “little prospect of a robust recovery” for 2010 and, when the recovery does begin, it will be “quite gradual.”
• over the next several years, the “fundamental economics of legal practice” will be re-evaluated and significantly changed. 

Some key specific observations and predictions include:

• Demand for large law firm services fell 4% in 2009 (contrasted with the period from 2001-07 during which demand increased by 4% each year).
• At the same time, clients increased pressure to obtain discounts, fee caps, and alternative fee arrangements, which caused realization rates to decline.
• Collectively, 5,259 large law firm lawyers were laid off in 2009, which amounts to 4% of the total NLJ 250 lawyer population and nearly 9% of the total associate population; in 2008, these firms increased their lawyer population by 4%
• In addition to payroll, firms did quite a bit of cutting on the expense side (a 5.6% reduction in 2009, which contrasts with 9-10% yearly increases in prior years back to 2001).
• Q4 of 2009 showed some signs that the market has bottomed out (M&A, general corporate, tax, capital markets, and real estate practices showed some improvement)
• Profits per equity partner (PPP) were essentially flat in 2009, which contrasts with a 3% drop in 2008 and 11.5% (average) yearly increases between 2001-07.
• Because the recovery will be “quite gradual” and because of expected continued pressures to keep fees low, “law firm revenues will be flat to only slightly higher for 2010.”
• Law firms will need to continue cutting expenses – one of the only places left is among its partners — they need to thin their non-equity partner ranks and weed out marginally performing equity partners
• PPP in 2010 will be flat to up by, at most, 5% on average
• The first 100 firms on the AmLaw 200 list of largest firms will continue to be harder hit by the economy than the second 100 firms and some regional firms

The National Law Journal has an interesting read (via the NY Law Journal’s online edition) about out-of-town law firms opening up L.A. offices with Entertainment Practices.  It includes a useful overview of entertainment law practice.

The National Law Journal contains a story about an expert study predicting a 4.3% decline in corpoarte legal spending in 2010.  While spending on regulatory work and litigation is expected to increase slightly, the prediction is it will not be enough to offset declines in spending in the areas of real estate, corporate, intellectual property transactional, tax, and environmental work.      

We’ve written about this before (here), but a recent article in the National Law Journal (via law.com) makes the point that more regional firms in cities whose economies were not so tied to capital markets are faring better during the current economic crisis.  Some are even taking advantage of the crisis to take on new talent and expand into other regions. 

Interesting article focusing on litigation boutiques in the National Law Journal (via the New York Law Journal’s website).  These are small law firms that do “BIGLAW” types of cases.  They are often started by lawyers from large law firms and are often the target of law firms looking to expand their business in certain areas through acquisitions.

One resource for finding boutique firms is the website of the International Network of Boutique Law Firms. 

WAMU (one of Washington DC’s public radio stations, which is based at American University) hosted a program last Thursday exploring how trends in the legal industry are affecting the public interest legal sector.

Participants included:  Jonathan Smith (Legal Aid Society of DC), Paul Igasaki (Equal Justice Works), Susan Hoffman (Crowell & Moring) and Matthew Pascocello (Washington College of Law).

Listen to the whole thing (about 1 hour) here.      

Interesting article in today’s Recorder — via law.com — entitled “The Way Some Law Firms Die Now.”  It is mostly about the demise of Heller Ehrmann, but there is also iteresting commentary from consultants who discuss law firms’ “economic resilience” and what is (or was?) perhaps different about “homegrown” SF firms.     

Worthwhile article in the National Law Journal — via law.com — entitled “The Recession Makes Externships A Sweeter Deal For Students.”  It’s about law students’ increasing use of externships to enhance their job prospects.  You can find more information about Boalt’s field placement program here. 

Professor Paul Caron (a/k/a TaxProf) has an excellent roundup of fellowships for graduates/alums looking to enter the legal academic job market.    

He also links to several great articles available online that provide background on becoming a law professor. 

I am sure our 2Ls and 3Ls are tired of hearing us talk with or email them about the central importance of networking, especially in the current challenging legal job market.  We’ve posted on this topic before here, here and here.  Tiring as it may be to hear over and over again, it doesn’t make it any less true.  We’ve read in various places that 70% of jobs are obtained through contacts.

Simply reacting to posted job announcements is not enough in this market.  You need to be sufficiently plugged in so when jobs open up, you hear about them from others before they are posted.  Or, you need to have someone in your network who may know the potential employer, or knows someone who knows someone who works there, so they can get your application materials a more careful look.

There is a recent article in the Legal Intelligencer (posted on the law.com website) that may help you if you feel networking is just not one of your strengths (as many lawyers and law students do).  Its entitled “Four Tips For Reluctant Networkers” and its definitely worth a read.

For further help in developing your networking skills, visit Networking Section of the CDO website (via the Career Development and Job Search Skills link on the CDO homepage).  Also, CDO counselors can help you build and expand your professional network.