The legal services market around the country is changing at a remarkable pace. Because of the downturn in the economy, competition remains at an all-time high for law firms and businesses alike. In an effort to meet the ever-changing needs of their clients while maintaining their bottom line, law firms are establishing multidisciplinary practices, merging with other firms, and refocusing their recruiting efforts — all to ensure they remain viable and needed entities during the recessionary time.

According to Jim Wilber, principal at Altman Weil in Milwaukee, “like everywhere, we are seeing a decrease in the demand for legal services. Wisconsin is not different than what we see across the U.S.,” he says. “It is true especially for the large international and national firms. Corporate mergers and acquisitions and other corporate transactions are down and that is the lifeblood of large firms.”

In fact, the January 5, 2009 edition of the National Law Journal notes that law firms are moving to reduced hours programs for some associates instead of laying off a certain number of them.

“Despite layoffs or reduced hours, and despite trimming back summer associate programs, we strongly recommend that law firms not stop recruiting altogether,” Wilber says. “The firms that did so in the recession of the early 1990s caused themselves significant difficulties when the economy picked back up — they had very difficult times restarting their recruiting and hiring programs and found themselves at a competitive disadvantage.”

Indeed, according to Tom Olejniczak, founding partner at Liebmann, Conway, Olejniczak & Jerry, S.C. in Green Bay, the legal industry is seeing fewer mergers and acquisitions and real estate transactions, but greater activity in banking, bankruptcy, and collections. So, the slowing economy has affected the legal industry, but not necessarily entirely negatively.

“Any practice area tied to economic activity is affected by the downturn. Real estate and construction law, and business mergers and acquisitions are the two most pertinent examples,” Olejniczak says. “As for law firm hiring, anecdotally, we have heard that times are slow. But our office’s two-year plan is on schedule. We added two new lawyers in June 2008 and will continue employing two law clerks during the summer.”

The State Bar of Wisconsin also notes that the economy is playing a role in how law firms and corporate law departments are doing business. “Anecdotal comments we have heard indicate that law firms are: focusing on client service and satisfaction; looking at new business procedures, such as value-based billing and accepting credit cards; and maintaining or expanding their marketing efforts,” says Thomas Solberg, public relations coordinator at the State Bar of Wisconsin.

Other firms are strengthening their presence in the legal industry by acquiring employees from firms that have closed their doors. Recently Foley& Lardner, LLP of Milwaukee acquired 10 attorneys for its intellectual property litigation practice and one patent specialist from Heller Ehrman LLP, which elected to dissolve in November 2008.

As Catherine Davies, shareholder in the business law and international departments at Reinhart Boerner Van Deuren in Milwaukee explains, certain practice areas in the legal industry have slowed somewhat due to the economic downturn, including real estate. “However, other practice areas have become much busier, such as bankruptcy,” Davies says. “Larger firms have a diversity of practice areas and that diversity helps soften the effects of a weak economy.”

Davies notes that law firms are being cautious when hiring these days. “During our fall recruiting process for our 2009 summer associate program, we paid close attention to the local marketplace and we listened to reports from students about their experiences in other markets,” Davies says. “It is our understanding that nearly all large Milwaukee firms reduced their class sizes for their 2009 summer associate programs. It also appears that firms are generally cutting back on their hiring of first–year law students for their summer associate programs. We have received more applications than usual from extremely qualified first–year students at highly ranked law schools.”

So how are corporate legal departments and in-house counsel fairing in this economy? “Although firms’ hiring practices are certainly tightening up, I am not yet aware of significant downsizing of legal departments or closing of firms in Wisconsin,” Davies says. “If such events do occur, other law firms will have the opportunity to hire qualified lawyers and that may in turn affect the number of positions available to graduating law students.”

Non-Profit Sector

Businesses both large and small are struggling during this recessionary period, and nonprofit entities are no exception. To help offset the legal expenses faced by nonprofits, Marquette University Law School established the Milwaukee Legal Initiative for Nonprofit Corporations (M-LINC) in September 2008.

According to Karin Holmberg Werner, the director of M-LINC, “it is intended to fill a need for legal advice and education for area nonprofits, particularly those that cannot afford to pay for legal advice without a substantial impairment of their programs.”

As Werner explains, the legal environment and reporting requirements for nonprofits have become increasingly complicated in recent years. “Most nonprofits cannot afford to retain lawyers to help them become aware of these legal changes and to make the appropriate changes to their programs and/or internal documents as they arise,” she says. “Moreover, there are a lot of organizational actions that nonprofits take that can benefit from the assistance of an attorney (for example, negotiating a new lease with a landlord, updating bylaws, merging with another nonprofit, and assessing employment law requirements for employees.)”

M-LINC consists of three branches: a legal referral service; educational programs on legal topics for nonprofits and; the Marquette Strategic Analysis, through which M-LINC chooses one nonprofit each school year and then pulls together professors, students, and administrators from Marquette University to assist that nonprofit.

“Nonprofits benefit by obtaining free legal advice and guidance,” Werner says. “Law students benefit by being able to translate their legal education to real world legal issues, develop contacts with area nonprofits, and generally give back to the community.” Since its inception, M-LINC has assisted more than forty area nonprofits, including mostly small to mid-sized public charities or start-up public charities in the Milwaukee area that have a wide variety of legal issues.

“Student interest in M-LINC has been overwhelming,” Werner says. More than 20 law students attended the M-LINC orientation in September and those students have subsequently volunteered their time on a variety of M-LINC projects.

This type of volunteerism is paramount for today’s law students who are looking to make an impact on their career, especially during a tough economy.

“For new grads or law students, the current recession is a stark reminder that although the practice of law is a profession, the profitability of one’s law practice is a business,” Wilbur says. “That means that the goal of a new lawyer needs to be to find a way ultimately to ‘be known for something.’ Finding a way to establish a recognized practice niche, one that is perceived as valuable in the marketplace, is still the ticket to financial success for individual lawyers.”

Solberg says that it’s obviously going to be harder to find work in an economic downturn. “On the other hand, this may be a great opportunity to look for opportunities in more rural areas, where smaller firms often have a hard time finding associates and may not be impacted to the same degree as larger or more urban firms,” he says. “Bankruptcy law looks to remain strong over the next few years.”

Olejniczak agrees. “For newly graduated lawyers, large law firms are reportedly cautious in hiring, and the slowing economy will force new grads to look in areas outside big cities for work,” he says. “With the larger firms hiring more cautiously, small firms, and practicing in smaller communities should become more attractive.”
According to Paul Katzman, assistant dean for career planning at Marquette University Law School, while the number of employer participants in the school’s 2008 Fall On-Campus Interview Program (Fall OCI) was comparable to that of the previous years, the number of students hired through Fall OCI slightly decreased.

“I suspect that a number of law firms, particularly larger law firms that regularly have summer programs with a number of students, were a bit more cautious in their recruiting and hiring and cut back on the size of their summer classes,” he says. “Typically, however, the vast majority of Marquette students do not secure positions through OCI, whether Fall OCI or Spring OCI, regardless of the economy. Most of our students find jobs with employers that generally do not recruit on campus. These employers tend to hire much later in the year, often right before the end of the academic year, so the next few months should be revealing.”

Until the economy rebounds, Davies thinks many recently graduated law students and soon–to–graduate law students will have more difficulty finding positions they desire on all levels—law firms, in-house positions, government positions, etc. “This may not apply to the top students at the top law schools—they will always be in high demand,” she says. “As to practice areas, bankruptcy and creditor’s rights practices may be extremely busy in this economy, but they may be less busy when the economy improves. Finding a job will be easier if you are flexible and willing to consider practice areas where the firm in which you are interested has needs.

Katzman also is hearing of Wisconsin legal employers laying off attorneys. “We are being contacted by more alumni than usual who are seeking job search assistance either because they have lost their jobs or are facing the prospect of losing their jobs but, at least so far, I would characterize it more as a trickle than a flood,” he says. “To a degree I’m taking a ‘wait-and-see’ approach with the expectation that things will become clearer in the coming weeks and months, but I’m not putting on rose-colored glasses when it comes to the legal job market. I recognize that there are challenges ahead.”

By Maura Keller

Maura Keller is a freelance writer originally from Wisconsin.

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