According to the Wall Street Journal, the economy added 200,000 jobs in December 2011, but the legal sector lost about 1,800.  From December 2010 to December 2011, the sector lost approximately 2,700.

The American Lawyer magazine just published their annual survey of large law firm (AmLaw 200) leaders.   Some key findings:

Despite the economy, 73% are optimistic about their firm’s future in 2012. 

Transactional practices at these firms continue to struggle.  Only about 20% are expecting to see any revenue growth in this area. 

A majority (58%) are expecting only modest (less than 5%) profit increases for 2012.

54% reported that clients refuse to pay for work of first and second year associates. 

75% used contract lawyers in 2011 (up from 55% last year).  37% outsourced work to lawyers managed by third parties (up from 25% last year).  28% outsourced work to non-lawyers managed by third parties, (a two-fold increase over last year).

With a continuing emphasis on greater efficiency, firms are increasingly expecting their lawyers to have project management skills.   One respondent said that, in order to succeed, it is not enough to have excellent legal skills, “you also must be able to manage teams and a budget, interact with people, and anticipate your clients’ needs.”  There is also an increased importance placed on the skill of developing new business (it is no longer enough to just  maintain existing client relationships).     

89% are expecting to add lawyers in 2012 through a combination of lateral and entry-level hiring.  However, only 29% are expecting a larger first-year associate class in 2012 (though that is up from 13% in 2011).  74% are expected to hire lateral corporate partners.  82% are expecting to add lateral litigation partners.    

Only 14% reported deferring starting dates in 2011, compared to 46% in 2010.

The well-known legal business consulting firm Hildebrandt Baker Robbins just published a report of its Peer Monitor Index, which includes information about key law firm business metrics for July - September of 2011.

We’ve regularly blogged about the Peer Monitor system before, but to refresh you , it is a service that allows law firms to access their peers’ financial data (in the aggregate) in exchange for supplying their own data to the system for others to access (on a normalized and aggregated basis). There are 35 Am Law 100 firms, 35 Am Law 200 firms and 30 NLJ 250 firms in the system. You can find more information about the Peer Monitor system here.

You can read a summary of the report here.

Among other things, the report shows that demand for legal services continues to grow, though the rate of growth has slowed.  At the same time, expenses have continued to increase as has the rate of that increase.   Part of the explanation for the increase in expenses is that new attorney hiring has increased (as it has been doing for the previous three quarters) in anticipation of growing demand. 

The report warns: “While firms have been hiring, however, demand has slowed as the year has progressed, widening the gap between law firm capacity and available work. Whether this trend continues will depend on the performance of the broader economy and whether we see continued recovery in litigation and transactional work.”  Stay tuned.

The well-known legal business consulting firm Hildebrandt Baker Robbins just published a report of its Peer Monitor Index, which includes information about key law firm business metrics for April - June of 2011.

We’ve regularly blogged about the Peer Monitor system before, but to refresh you , it is a service that allows law firms to access their peers’ financial data (in the aggregate) in exchange for supplying their own data to the system for others to access (on a normalized and aggregated basis). There are 35 Am Law 100 firms, 35 Am Law 200 firms and 30 NLJ 250 firms in the system. You can find more information about the Peer Monitor system here. 

You can read a summary of the report here. 

Among other things, the report shows that — very much in line with how the overall economy performed in Q 2 — the market (at least for large law firm legal services) gained a bit for the third quarter in a row.  However, the “soft patch” that the economy recently hit is causing law firms to “prepar[e] for continued uncertainty and  monitor[] headwinds and risk factors.” 

Bottom line:  “While the law firm market continues to show gradual improvement, growth is still well below historical averages, and a myriad of cautionary factors remain in place, including client rate pressures and
rising costs.”

Each year, the National Law Journal publishes a list of 20 successful midsize firms (50-150 lawyers), called the Midsize Hot List.   You can see the 2011 version here.

The Above The Law blog recently started a new series for small firm lawyers called Small Firms, Big Lawyers.

The latest installment is entitled The Secret To Finding A Small Firm Job.  You should read the whole thing, but one highlight was the testimony of the author – the principal of a small firm – that his suggested method, which comes down to informational interviewing, works: 

“Over the past 13 years, I have hired five lawyers whom I first met in informational interviews (months or even years before I hired them). In addition, I know of six other informational interviewees who ended up with jobs that they got after I sent them to other lawyers.”  

We have a a bunch of resources on the subject of Informational Interviewing on the CDO website. 

The ABA has undertaken what appears to be a careful and detailed study of the geography of lawyer salaries.  They’ve developed an online search tool that enables you to see where the jobs are and what they pay by county.  They’ve also “identified  10 smaller markets whose average salary figures may surprise you—lesser law markets that are paying big-city bucks.” 

You can read their entire findings, which comprise the cover story of the latest ABA Journal, here.  

Today’s Recorder contains an article about 2010 revenues and profits at eight Northern California based law firms.  It also reports on interviews with some of the firms’ leaders about what they are expecting for the future. 

Read the whole thing here.  Notably, head count at six out of the eight firms dropped in 2010. 

One highlight:

“Extreme caution about hiring remains the rule – even at firms like Morrison & Foerster, where revenue per lawyer was up a healthy 6 percent. Chairman Keith Wetmore said MoFo’s biggest challenge was aligning head count with work levels. ‘We’re being very careful not to let groups hire ahead of demand,’ he said. ‘We’ve also managed costs and staff head count aggressively, not replacing people when they leave, restricting travel costs and revisiting our marketing and tech budgets.’”

The latest annual Hildebrandt/Citibank Client Advisory is out.  We’ve posted about the Client Advisories before (see here). 

You can access the whole report here.

Among other things, it predicts:

• continued sluggish demand for legal services on the part of corporate clients
• associate recruitment goals have stabilized at levels much lower than in pre-recession years and are likely to remain there for the foreseeable future.