The meltdown of the legal services industry, in the wake of the financial meltdown, is hurting biglaw firms as they shed lawyers and clients.
But small firms are grabbing up both those clients and laid off lawyers, according to Australian legal recruitment firm Mahlab.
Smaller practices are using their lower overheads and cheaper hourly rates to win more work from corporate clients, according to the report.
“Some firms with lower overheads and lower charge-out rates report an increase in new client activity as clients vote with their feet (and their wallets) and move to cheaper firms,” Mahlab says.
“Changes in the legal market offer opportunities to many firms, often in the second and third tier, to ‘cherry pick’ outstanding lawyers who may not otherwise be on the market or open to a call.”
Mahlab’s analysis comes soon after last week’s study of the US legal market that predicted a decline of up to 15% in profits per partner at US firms. That study, by law firm consultant Hildebrandt and Citi Private Bank, predicted more firings at US firms this year as the legal services industry struggles to adjust to falling demand.