While the U.S. economy was starting to show nascent signs of recovery by early 2011, it became apparent that BigLaw was unlikely to participate in that recovery when it finally took hold. While optimists believed that BigLaw would simply lag, many predicted the business of BigLaw had fundamentally changed.
Through the recession, sophisticated consumers of legal services, including some of the largest companies in the world, came to understand that it was no longer necessary to pay inflated rates and bloated costs to address even some of their most complex legal issues. They learned that most of their matters could be addressed far more efficiently and cost effectively. Yet, despite this breakthrough, many of the same large firms that had lowered rates, offered discounts and cut staffing levels during the recession, sought to return to earlier days of revenue growth by raising rates and costs. Whether it was due to fixed cost structures that demanded they redouble their efforts to grow revenues, or a stubbornness they hoped would “will” them back to earlier times when they billed at full rates, generously staffed matters, and treated rate increases as annual rites of passage, many large firms were unable to or simply unwilling to keep with the changed times.
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