Don't Cry For Big Law

Walls Street Journal Law blog writer Nathan Koppel writes about the economic downturn from the perspective of corporate law firms, and discovers things aren't quite as bad as you'd think. This from his blog post:

The sky, it turns out, is not falling on corporate law firms. That is the counterintuitive take in this bullish piece from The Deal magazine, titled, “Don’t Cry for BigLaw.”

David Marcus, the author, draws an analogy to the 2000 dotcom implosion to argue that most firms will emerge just fine from the current economic rough patch.

Initial public offerings and corporate work in Silicon Valley dried up significantly in the early part of the decade. Still, the leading tech law firms, such as Wilson Sonsini and others, emerged and sustained healthy partner-profits ─ $1.38 million on average at Wilson Sonsini last year, according to AmLaw magazine.

“The lessons: Even in tough economic times, law remains a very profitable business with high profit margins, and law firms, despite being frequently maligned for their business ineptitude, are reasonably adept at adjusting to new circumstances,” Marcus writes.

And there are plenty of reasons for optimism: regulatory work remains robust, and the high-end plaintiffs’ bar continues to churn out litigation that big companies must pay dearly to defend.

Sure, the Deal concedes, there will continue to be pain ahead – and some law firms may even fold. “But law will remain a good business, and law firms will prove far more stable than many of their critics suspect.”

So, LB readers, is Marcus right and is everything just peachy in Big Law?