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The 2021 Report on the State of the Legal Market, from The Center on Ethics and the Legal Profession at Georgetown University Law Center and the Thomson Reuters Institute, suggests that law firms have reached a "tipping point" in the wake of the COVID-19 pandemic. As we look back on 2020 and 2021, the authors of the study note, we may discover that these two years led to permanent changes in the legal industry.
Law firms have survived – and some have thrived – despite difficulties in 2020. While any lawyer can tell you that demand tanked in the first part of 2020, many law firms were able to compensate by increasing rates. Large law firms, in particular, were able to maintain profitability, although the industry did see the first widespread cutbacks since 2008-09. According to an October survey by Thomson Reuters, small and mid-size firms overwhelmingly took advantage of the Paycheck Protection Program.
The report suggests we may see a new normal when widespread vaccinations occur and current social distancing measures recede. Potential changes include:
None of the above should be particularly surprising. These changes were already occurring in the legal industry before the pandemic. What 2020 did, according to the report, is accelerate change. Working remotely is perhaps the quintessential example. While the technology to work remotely has existed for years, law firms were reluctant to make such a dramatic change. With the success most law firms have had with a remote workforce, the opportunity to reduce overhead by reduced staff and office space may be tempting for many. However, lawyers have repeatedly reported being eager to return to the office, so a flexible work arrangement that splits time between home and the office may be the most likely result of 2020.
While demand continues to be lukewarm, according to the report, reduced travel expenses, administrative costs, and other expenses should be able to offset lowered demand, and equity partners can expect another strong year in 2021.
You can download the full report on the Thomson Reuters website. FindLaw is a part of Thomson Reuters but took no part in the creation of the report.
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