by Zack Bombatch, Staff Writer
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The American law firm has emerged as
a new animal in the wake of the recent enduring economic recession. Large firms require much more from their
attorneys, even their entry-level associates, by mandating their job
responsibilities reach beyond assisting in the provision of legal advice and
focus more attention of firm-wide business functions. While the legal industry is a service
industry, firms now realize that they must contain internal costs that cannot
be passed along to their clients. Beyond
reducing overhead, firms must now, more than ever, identify areas of society
that require legal advice. Instead of
reacting to client needs, firms must proactively pursue areas of practice that
will generate sustainable revenue streams. This is not a novel idea; however, the
proactive approach to legal counsel now must reach far beyond the next quarter
or even fiscal year. It must reach into
the next decade to determine where the surges in areas of legal practice will
emerge.
In the Pittsburgh area, the economic boom in the energy industry has
provided many Pittsburgh firms with the opportunities to create centers of
excellence in oil and gas law, property law, and a myriad of other
energy-related law; however, this boom is cyclical. Eventually, the surge in these interrelated
areas of practice will subside. The true
entrepreneurial lawyers will be the ones who identify the next areas of law
that will ride the wave of the shale industry. The price of natural gas has
plummeted to such low levels that companies from across the nation has explored
the possibility of setting up shop in the Pittsburgh region. There is a plethora of legal practice to be
pursued in the decades to come. The
energy industry projects an increase of 1.5 million jobs by the year 2035 for
the shale regions. It is important for
attorneys to realize that “drilling is just the beginning” is not merely a
slogan, but a truth of the region.
What’s next? Entrepreneurial
lawyers will be able to identify the types of businesses that will relocate to
their geographical area, those businesses’ future challenges, and the rights
and liabilities of businesses and individuals impacted by this new economic activity.
This entrepreneurial approach to firm
growth is not contained to the legal industry.
Several Fortune 500 companies enjoy sustainable success by taking risks
that some start-up companies with less than ten employees would pursue. A study of Asian business models demonstrates
that many companies have adopted a “hundred year business plan,” where
businesses project the economics boom and busts of the future and structure their
plans accordingly in anticipation of these fluctuations. Maybe 100 years is a bit far in advance for
the legal community, but it is not outside the realm of possibility for a firm
to develop a 10 or 20 year business plan that will provide structure and
predictability as the legal industry wades through the ocean of the changing
legal needs of the region.
This approach is not and should not
be reserved for large firms. It is
likely that medium sized and small law firms who feel the pulse of the region
on a very micro level will identify these trends before they even emerge. Legal entrepreneurship may require firms to
fundamentally shift their practice areas multiple times over the course of
several years, but if properly executed through calculated risks, these
adjustments should be rewarded. Failure
to look well into the future of the legal industry could put many firms at risk
for disaster, especially as a large number of firms have struggled to survive
this decade’s economic environment and new legal business arena.
