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Lawyer jobs at risk, survey suggests

Posted by: Laurence Simons 19/02/13

Remember dinosaurs? Like chickens but larger and toothier, these mighty reptiles once stalked the earth, eating smaller animals, master of all they surveyed, with the rest of the world trembling in their wake. Then they disappeared, with the scientific community yet to reach a consensus on why or even exactly when - although it is thought that environmental changes to which they could not adapt played a role.

Some major law firms could be set to follow suit, with the vast majority of law associates questioned as part of a Legal Week survey admitting that it is likely more large companies will collapse over the next two years.

In the wake of Cobbetts' recent rescue takeover by DWF and Dewey & LeBoeuf's implosion last year, 95 per cent of respondents claimed more closures are possible, with 42 per cent expressing the feeling that this eventuality occurring is very likely.

Slaughter and May executive partner Graham White said that the specific cases alluded to above had many factors involved in their collapse, but warned that more problems are likely if companies act like dinosaurs and fail to adapt to changes in the world around them.

"Firms without a clear market position, differentiation or sound financial management might find it harder to cope.

"At the moment, the market is much tighter, with increased pricing pressures, profitability squeezed and work reduced against a background of fixed overheads that represent a large proportion of outgoings and can be difficult to cut back."

The issues most likely to lead to collapse were described as excessive levels of debt, poor financial management, and bad leadership, while excessive property liability was also seen as a potential problem.

However, 88 per cent of respondents expressed their feelings that the firm in which they work has sufficient safeguards in place to avoid these kind of failings, either indicating a touching degree of confidence in their own abilities or a strain of virulent myopic thinking that tends to afflict high-flying executives.

Simmons & Simmons head of corporate and commercial Mark Curtis pointed out that domestically-focused companies, particularly those in the UK, could find themselves under more pressure than those with a link to emerging international markets, where conditions remain stronger than in more developed regions.

According to research by the Centre for the Study of the Legal Profession at Georgetown University Law Centre and Thomson Reuters Peer Monitor, morale problems in Biglaw are on the up as businesses find their potential income held back by the economic situations.