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Legal Market Review:  Small Firms Struggle in the South

Legal Market Review  Small Firms Struggle in the South-head

Law firm consulting group, PerformLaw recently published a series of legal market reviews providing an analysis of attorney headcounts at law firms in six demographic regions.  In some cases, the reports look at a single city, while in others it provides a view of a larger geographic area.

“All of the markets are generally flat, but inside the data are a number of firms doing okay,” according to Brian Kennel, the consultancy’s CEO and Lead Consultant. “For example, of the 86 firms we survey in the New Orleans market 24 of them are actually growing.” [A screenshot from this report is included below].

The firms that are doing well, have a “competitive advantage” he says.  “This tends to be true in all markets.”

There are also trouble areas, especially for smaller firms with under 10 attorneys.  These firms are “taking a beating,” according to Mr. Kennel.  In New Orleans for example, for every two law firms that have added headcount, five law firms have reduced headcount.

He sees three underlying causes for the marketing trends:

  • Improved litigation management
  • Unwillingness to try cases
  • More in-house competition

Legal Market Review  Small Firms Struggle in the South - middleThe six geographic regions PerformLaw reviewed are:

  • New Orleans. Total attorney headcount has trended down since September last year. The total count in New Orleans is 1,818 based on a sample of 86 law firms.
  • Louisiana. Overall the state looks like a bright spot for lawyers as headcounts have ticked up. A sample of 19 firms puts overall headcount at 325 up from 308 roughly a year ago.
  • Jackson, MS. The aggregate trend line is down to 559 in August 2015, from 571about a year ago. The sample set was 26 law firms.
  • Houston. The Houston market has an S-curve to the analysis, based on a sample of 23 law firms. It bottomed out at 619 in May 2015, off from 628 in November 2014 – but currently sits at 623.
  • Orlando. With a sample of 40 law firms, Orlando sits with 621 – off from a high of 644 in January 2015, but slightly up from a low of 620 in May.
  • South Florida. This analysis looks at attorney headcount in Miami (25 firms), Ft. Lauderdale (31firms) and Tampa (42 firms). Of the three, Miami looks the brightest, swinging up to 482 attorneys.

* * *

So is this a downturn?

“I think that the marketing will continue to become efficient. To refer to this as a down market is somewhat of a misnomer,” he said. “I think it is more related to efficiency.”

The “better managed firms are adapting just fine.”

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Photo: Flickr, Cristian V. Struggle (Chess I) (CC BY-ND 2.0)

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About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.