After Strong Q1, Big Law Could Bump Up Against Recession in 2025 - What to Expect

 Since the 2008 global financial meltdown, Big Law has refined its playbook in managing downturns. For example, in the 2020 one, triggered by the pandemic, there weren't massive layoffs as there had been during The Great Recession.  

So, if there is a recession in 2025, which some financial institutions indicate the odds for which is 65%, large law firms might be able to get by without RIFs. The only wrench in the works on this is that compensation for associates is higher now than it had been in 2020. Partners could ease the pain if they agree to delayed or even lower compensation. However, already recruitment and hiring are down. And generative AI apps are making inroads, slow but steady.

The financial performance for Q1 this year was strong. Some of that resulted from collection of bills due from last year. But there probably won't be a boost from M&A. The boom that was expected with the Trump victory hasn't materialized. Business leaders feel too uncertain about the economy to move forward with dealmaking. 

Meanwhile the leadership and star partners in Big Law have to navigate both the changing terms and conditions in the deals they assumed they had made with the current administration and the fallout in the court of public opinion for entering negotiations. Sentiment is support for law firms which took the litigation route and resisted the threats. 

Overall, 2025 could be the year that goes down in history as when the institution of Big Law ceased to have autonomy, power and influence. Sure, those firms such as Kirkland & Ellis, Latham and Paul Weiss could still generate high Profits Per Equity Partner. But the mystique could collapse. 

No longer might the brandname players in the firm be able to be change agents in society or even thought leaders. They will be restricted to "stick to the knitting. More and more of that knitting could be a type of "national service" required by the Trump administration as pro-bono assignments. 

In short, the wealth of lawyers in Big Law may be a stand-alone. Just money. 

Of course, you need to earn a good living. Special expertise with transitions, reskilling and startups. Complimentary consultation with Intuitive Coach Jane Genova (Text 203-468-8579, janegenova374@gmail.com).