Shareholder, Polsinelli PC, and President, Springfield Metropolitan Bar Association
2015 Economic Outlook: Dwayne Fulk
Dwayne Fulk leads the SMBA into uncharted waters as private practice continues to lose market share to in-house council. 2015 Projection “Rate pressures will be high, especially for practices that are growing faster than the market, and because of increased competition, law firms will increase their marketing and business efforts.” SBJ: How did the legal landscape change in 2014? Dwayne Fulk: The most notable overall was a small uptick in the market for outside counsel services, such as private attorneys. The market nationally is now over $100 billion. The uptick was led by global companies, because they are using more U.S. counsel.
We saw some of that locally. Although litigation spending was flat the past several years, the overall number of matters increased. That means everyone is doing more with less.
SBJ: Will that trend continue? Fulk: It will. This next year, there will be some continued growth, but it will be a slow growth. There is not a practice area that is expected to grow more than 8 percent nationally, [and that’s] the trend here locally as well. I think there will be shifting priorities, especially to small technical or routine cases.
SBJ: What changes are you forecasting in 2015? Fulk: A change we have seen incrementally, which will drastically increase in the next year, is competition for new legal work. It’s at the highest levels ever recorded. I think we will see some additional marketing and client development efforts based on that competition.
There currently are the highest number of law students ever, but also the lowest number of law school applications. We will have a shifting and adjustment in terms of the staffing. I think we will see hiring being relatively flat, but the competition will increase. Some areas, like litigation, will probably decline, because companies are deciding to settle cases as opposed to litigate. They are also pulling that work in-house.
SBJ: Why the decline in law school applications? Fulk: There are a couple factors. One, only half of law school graduates currently are employed in law-related fields. There is a correction in the market in terms of people’s expectations. But I also think law school has traditionally been a default for people who weren’t sure what to do with their careers after college. They are deciding to go more into their fields or other fields of technical expertise.
SBJ: What are your top concerns? Fulk: Law firms are losing market share. They are losing it to in-house legal departments, to online services and also nonlawyer providers. Even though the legal market is increasing, law firms are losing a portion of that market share. High-value practice areas are experiencing unprecedented levels of competition.
SBJ: How do you combat that? Fulk: Client service levels will increase. Along with attorneys providing increased value and efficiency, we will have to be more creative in how we price our services. More companies will start or expand in-house counsel departments, so lawyers may shift that way.
SBJ: In what legal fields have you seen growth? Fulk: We are looking for growth in the cyber security area, especially as to data privacy and liability related to data breeches. Overall, we have seen an increase in health care work, especially regulatory. I think that will happen locally, matching national trends.
Locally, we are seeing an increase in real estate work, which might buck the overall trend of shrinkage nationally because of recent local real estate developments picking up after the recession.[[In-content Ad]]