Recession Has Silver Lining for Legal Industry
While the long-running recession has wreaked havoc on most industries across the United States, one has been left relatively unharmed: the legal technology industry. As millions across the U.S. searched for work, the legal technology field was still seeing regular business – at least those firms that weathered the storm and were able to absorb extreme cash flow issues. In early 2009, many law firms and corporations put a hold on paying any bills until the economic storm passed. Unfortunately, some firms weren’t able to stay afloat since credit for businesses was also nearly universally frozen. But for those who did survive, business remained steady (and in some cases grew). Consider the industry somewhat recession-proof in this way.
For better or for worse – some point to the ever-litigious US legal system as a reason why the industry wasn’t negatively impacted as severely as so many others were over the past 18 months. Even during a downturn, companies still sue other companies and parties still sue other parties. Other legal areas that continued to see business include intellectual property, restructuring and unfortunately, bankruptcy.
Even though the recession proved to be difficult, the legal technology industry found a silver lining in the fact that the demand for services will grow, even if the growth may be small at first. Lawyers at many firms also re-evaluated their firms to see how they could improve their services and operations, giving their clients the best legal representation possible at more affordable prices. Some firms have hired lawyers on a contract or an as-needed basis. This allowed the law firm to have extra help and a lawyer to have a job – and more experience. And even though there were many lawyers who lost their jobs during the recession, smart law firms have taken a broader look at how they recruit new talent and how they can retain the brightest of lawyers in their firms moving forward.
In the months ahead, expect to see a huge boost in the legal technologies field. “Dollars are opening up again,” said David Cowen, founder and principal of Cowen Intelligence, a unit of The Cowen Group. “Legal technology budgets that have been frozen the past 12-18 months are now thawing,” Cowen says. During the dark days of the recession, law firms devoured any and all information about the eDiscovery field. The result is lawyers who are more accountable for the information they have learned about the e-Technology field.
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