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Lawyers report higher confidence in economy in Q4 survey


This is the latest installment of The Daily Record and Maryland State Bar Association’s Maryland Lawyers Confidence Index, a confidential survey of private attorneys in the state that explores their views on the economic factors influencing their practices. If you’d like to participate in our next survey, please sign up. Also, dive deep into our data visualizations of the results of this survey.
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Maryland lawyers reported higher confidence in the overall economy in the fourth quarter than they did earlier in the year, according to the latest Daily Record-MSBA Maryland Lawyers Confidence Survey. In the same vein, more respondents indicated they were confident that over the next three months their firms would grow in several areas, including the number of billable hours.

The percentage of lawyers who felt confident about the overall economy rose from 42% in the third quarter to 54% in the fourth quarter. Randi Lewis, a recruiter at the Baltimore office of legal recruiting firm Major, Lindsey & Africa, said she took that confidence to mean that the attorneys’ own firms were doing well financially.

“Those results tell me that respondents’ firms are likely doing well, so they perceive the economy is doing well,” Lewis said.

The fourth-quarter survey had the smallest number of respondents in 2019, with 246, down from 290 respondents in the third quarter, 258 in the second and 354 in the first.

Attorneys’ confidence that their firms would hire more lawyers rose 8 percentage points from the third to fourth quarters, with 18% of fourth-quarter respondents saying they agreed strongly that their firms would hire attorneys over the next three months, up from 10% in the third quarter.

Lewis said firms have been looking to hire at the partner and associate partner levels. She added, too, that attorneys in general are showing interest in changing jobs.

“What I’m also seeing is lawyers at all levels exploring the market and seeking to move to different firms,” Lewis said.

The overall index of lawyers’ confidence (which ranges from -100 to 100) also rose, going from -1 in the third quarter to 4 in the fourth quarter of 2019.

That overall index is based on a handful of questions that ask lawyers whether they think their firms will hire additional attorneys in the next three months; whether they foresee an increase in business that results in more billable hours; and whether their firms will invest in support staff, new technology, marketing and business development and infrastructure.

Firm investment areas

Forty-four percent of respondents said their firm anticipates an increase in business that leads to more billable hours in the next three months, up from 42% in the third-quarter survey. Lewis said it makes sense that more attorneys would foresee a boost if their firms are flourishing.

“It would follow that if firms are doing well, they would confidently predict there would be an increase in billable hours in the next year,” Lewis said.

Respondents were less sure that their firms would invest in marketing and business development. Forty-three percent agreed that their firm would invest or expand in marketing and business development over the next three months, down from 47% in the third quarter.

However, Lewis said this survey response was not consistent with her experience.

“It suggests to me that firms are tightening their belts on expenses, but I’m not seeing that,” Lewis said. “Talking to firms, one of the most important areas they’re spending on is marketing and business development. It could be people tightening the expenses in the event there is a downturn. That’s speculation.”

Forty-five percent of respondents said their firm planned to invest in new technology over the next three months, up slightly from 44% in the third-quarter survey. Thirty percent of respondents said their firm planned to invest in support staff in the next quarter, up from 29% in the third quarter.

Firms’ areas of change

Asked about the biggest contributors to change in the legal profession over the next five years, 57% of fourth-quarter respondents listed artificial intelligence and technologies that automate. In the second and third quarters, 53% of respondents listed artificial intelligence and technologies that automate as the most likely contributors to change in the profession.

Thirty-five percent of fourth-quarter survey respondents said commoditization of the legal profession would be the biggest contributor to change in the next five years; in the third quarter, 41% said commoditization would represent the biggest change to the profession. Commoditization can be defined as the mass production of legal services, which allows cost-conscious clients to pick and choose which lawyers or law firms will handle specific aspects of their cases.

Other takeaways

  • Most survey respondents – 26% – were from Montgomery County, followed by Baltimore city (20%), Baltimore County (17%), Anne Arundel County (13%) and Prince George’s County (12%).
  •  Sixty-five percent of fourth-quarter respondents have practiced law for 20 years or more, while 21% have practiced for 1o years to less than 20 years.
  • Thirty-six percent of respondents were female, 60% were male and 4% preferred not to say.

 


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