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    Wisconsin Lawyer
    February 01, 2016

    What’s Hot, What’s Not: National and Global Practice Trends 2016

    Are you positioned to turn pressures on the legal profession into opportunities for growth? Learn which practice areas are trending hot, hotter, and red hot, and which are cooling down on the national and global fronts.

    Bob Denney

    Hot peppersThis is our 27th annual report on what’s going on in the legal profession. This year’s report has been the most difficult of all these reports to write because of the continuing and sometimes conflicting changes in the profession which many firms still have not recognized or accepted. As always, the report is based on information we compile throughout the year, not only from our clients and many other firms but also from surveys, legal departments, and providers of legal services and those businesses supporting the legal industry.

    Some findings are not new, but we include them because they continue to affect the profession. Other findings have not yet been widely recognized, but we believe they already have or will have a significant impact on the profession. The resulting picture is a montage of a legal profession that will continue to change, not just in 2016, but for years to come.

    This report presents the big picture but the local picture will vary by individual firm depending on its size, client base, nature of practice, and geographic focus.

    Red Hot Practice Areas

    Cybersecurity is a red hot practice area in large firms, where security is also a red hot operational issue, which it should be in all firms.

    Regulatory. This has become red hot due to continuing increases in governmental regulation in many areas, not just workplace safety (that is, Occupational Safety and Health Administration (OSHA) rules). This is a major concern of general counsel and corporate management.

    Hot Practice Areas

    White Collar Crime. We classified it as “getting hot” in our midyear report. The U.S. Department of Justice has since launched a program on prosecuting not only corporations, but also individuals, for corporate and financial malfeasance.

    Labor and Employment. This will become red hot for many reasons, including increased OSHA enforcement in the construction, oil, and gas industries, and teachers’ unions ramping up efforts to organize charter schools.

    Robert DenneyRobert Denney of Robert Denney Associates Inc. provides leadership, strategy, and management counsel to law firms throughout the United States.

    Mergers and Acquisitions. This area is hot for those firms that already have a strong M&A practice. This will continue – unless the economy stumbles.

    Elder Law. Although not discussed much, this area continues to grow; some people want to make changes in their estate plans because they are living longer.

    Health Care was hot last year, too, and for the same reasons as this year: billing investigations and complaints from patients about HIPAA compliance, and provider self-reports related to privacy and security breaches. Health care also has become an industry group that includes at least 15 practice areas, such as finance, regulatory, and labor and employment.

    Technology has become hot as an industry group, which includes multiple practice areas such as patents, regulatory, and telecommunications.

    Same-sex Marriage Rights. In states that continue to ban same-sex marriage, this remains a hot practice area.

    Immigration. Firms that already have immigration practice areas are finding this hot. It could get red hot even before the 2016 presidential election.

    Financial Services is hot as an industry group, which includes multiple practice areas such as banking, IPOs, and regulatory matters among others.

    3D Printing, Disruption is hot in the firms that have this practice. This is a new approach, not only to printing but also to manufacturing and even construction. According to the few firms that understand what it is and have already developed the practice, it saves huge amounts of time and money.

    Practice Areas Getting Hot

    Real Estate and Construction. Commercial real estate and construction have become hot in many parts of the country. Their residential counterparts will continue to have mixed readings even after interest rates rise.

    Pro Bono. Firms want to give back to their communities and, as more clients refuse to pay for newer associates’ work, firms are expected to take on more pro bono work by which to train their less-experienced lawyers.

    Warm Practice Areas

    Alternative Dispute Resolution. This practice area has been around for a long time and is a cost-saving alternative to litigation.

    Energy. All forms that include “clean” were hot in 2015. This practice area will become hot again as the movement against fossil fuels continues and oil prices eventually rise.

    Cold Practice Areas

    Bankruptcy is cold, as it always is until the economy takes a turn for the worse.

    Practice Areas with Mixed Readings

    Environmental. Surprisingly, the temperature of this practice area varies in different parts of the country.

    Intellectual Property. Patent prosecution and trademarks continue to be at least warm if not hot because of the continued growth of social media and branding, but the picture on patent litigation is mixed. Some surveys of legal departments conclude that it will cool down in 2016. However, while a few IP firms and litigators expect that two U.S. Supreme Court decisions may eventually reduce the amount of patent litigation, they all report heavy caseloads. In addition, patent trolls continue to file suits, and the pharmaceutical industry is the source of much patent litigation.

    Commercial Litigation. Except for “bet-the-company” cases, many major firms are reporting declines. There are at least four reasons for this: 1) Corporations have been increasing the size of their legal departments and are handling more cases themselves; 2) clients are more prone to settle out of court to save cost; 3) nonlaw service providers are doing more discovery and document management and some of them are providing other services – all at lower costs than firms can afford to charge; and 4) the use of technology, such as 3D printing, is growing. These are irreversible trends, but many firms still have not recognized them.

    Hot Geographic Market

    Washington, D.C. Several firms have opened offices in the nation’s capital, and others are expanding existing offices due to continued increases in governmental regulations and enforcement as well as in public affairs and lobbying work.

    Other Issues

    Cybersecurity. As noted under “Red Hot Practice Areas,” this is a red hot operational issue in large firms. It should be in all firms, regardless of size.

    New Practice Area Subspecialties. Several new subspecialty practice areas have surfaced in a small but growing number of firms. Examples include 3D printing, drone law, brand and digital governance, biometric recognition technology, and social media defamation.

    Industry Groups. Two years ago we reported that a few firms were forming industry groups as opposed to practice groups. This trend has slowly gained momentum. Recently, Schwabe, Williamson & Wyatt reorganized its practice structure into six industry groups: technology; health care; real estate and construction; ports and transportation; manufacturing and distribution; and natural resources.

    However, in defining this as a “go-to-market strategy,” Schwabe, like the other firms that have adopted this structure, has recognized that industries are really broad marketing groups that include multiple practice areas and what recognized authority Patrick McKenna calls “subindustries.” For example, health care includes at least 15 areas such as finance, regulatory, and labor and employment; financial services includes banking, IPOs, and regulatory; and technology includes patents, regulatory, and telecommunications.

    Outside or Nonlawyer Service Providers. Outside competitors for legal services continue to grow in number and in the breadth of services they provide. Furthermore, they are providing services not only to law firms. Legal departments are increasingly retaining them directly and bypassing law firms because their fees are lower.

    Start-up Law Firms. Because of the continuing tight market for new lawyers, and the need to make legal services more affordable, law schools in California and several other states are funding start-up firms.

    Mindfulness Movement. Reportedly at least two dozen law schools offer for-credit courses in Zen-inspired blends of meditation, breathing exercises, and focus techniques, with support from companies such as Google and General Mills. At least one law firm and the legal department of a major corporation retain a mindfulness coach.

    Debt. Historically, law firms have not incurred debt to provide cash when needed but have used short-term lines of credit and capital contributions or buy-ins from equity partners. Now, alarmed by the collapse of Dewey & LeBoeuf almost four years ago, large U.S. firms have considerably reduced their bank debt even further and are leaning more heavily on their equity partners to provide capital. As a result, more partners are taking out bank loans to provide this capital, which effectively shifts debt.

    The Accountants are Here! In the last decade, accounting firms have been quietly but steadily building their legal services divisions. According to The Economist, they have focused on “mid-tier, process-oriented work rather than the big deals and lawsuits that elite law firms chase.” Of course, accountants can’t practice law in the United States or in most European countries.

    However, as we reported two years ago, several countries – notably Britain, Australia, and Mexico – have authorized multidisciplinary practices, which allow attorneys to share profits, without restriction, with members of other professions. Since then the Big Four – Deloitte, PwC, EY, and KPMG – have been buying small law firms, hiring partners from other firms, and recruiting on campuses. Rather than trying to build full-service practices, they are concentrating on areas of law that complement their existing services, such as immigration, which fits with expatriate tax work; and labor, which fits with human resources consulting and compliance, commercial contracts, and due diligence.

    Bar Exam Scores. The average score on the 2015 summer exams reached its lowest level since 1988. Law school deans have said the test was unfair and that a software glitch made it harder to submit test results. The president of the National Conference of Bar Examiners, which created the multiple-choice section of the test, replied that law schools have been admitting students with lower qualifications who may encounter difficulty in taking the exam. And, of course, applications to law schools continue to decline.

    Foreign Laws. U.S. Supreme Court Justice Stephen G. Breyer wrote a new book in which he argues that there is a growing need for judges and lawyers in the United States to take foreign laws into account as they seek to resolve disputes that arise, not only in the United States but also abroad.


    As we were in the midst of preparing this report, one of my collaborators said to me:

    “From where I sit, all I’m hearing is ‘change!’”

    “We’ve gotta change.”

    “We are experiencing a tsunami of change.”

    “The profession is experiencing radical change.”

    “And yet, as far as I’m concerned, we ain’t seen nothin’ yet.”

    Those comments sum up what we have reported here while pointing out some examples – but by no means all – of the developments that are affecting and changing the legal profession. But the question in my mind, and in the minds of some far-sighted people is, “Will the legal profession survive?”

    Yes, I believe it will if the profession follows the message my late father-in-law constantly repeated to his family:

    “Do what you have to do, when you have to do it, whether you want to do it or not.”

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