I often think about what’s in store in the practice for a new lawyer. Would you, as a parent, suggest that your son or daughter become a lawyer, and if so, what type of practice would you recommend? Observers in the industry are forecasting a cooling of the legal market over the next five years due to ever increasing pressure on rates from clients, rising costs, the unbelievable hike in associates’ salaries, and a segmentation of the market place. The legal industry over the years has had an annual growth rate for revenue and profits per equity partner averaging 9.8% for growth rates and 10.6% for revenue. Projections for 2007 have the growth and profitability rate down some and to not greater than 7 to 10% respectively. Why is this occurring? Well, apparently, the business model for legal services is outdated and a billable hour is headed for the grave. Fixed fee arrangements are the possible wave of the future, with the exception of practices such as personal injury and collection where contingency fees are the norm, but there has been downward pressure on those fees. I can remember suggested Commercial Law League rates—the rates today are much lower.

In representing creditors’ committees, while still existing, are more driven by high-quality and better value for the money, from the law firm obtained.

While the largest growth industry will come from litigation, corporate services and intellectual property, it is believed that both profits and volume will be somewhat stagnant. It is believed that spending on outside counsel will decrease significantly in the coming year.

Apparently, the top five in-demand positions include in respective order, licensed attorneys with five or more years of experience, corporate attorneys, first-year associates, paralegals, and legal secretaries. The hottest practice areas continue to be the intellectual property area, complex litigation, antitrust, mergers and acquisitions, and the growing area of immigration services. With an aging population, estate planning and elder law are also areas that will see growth. Real estate has historically been a good area of practice for lawyers. The current downtrend will affect that area, but over the long-term, the area will remain positive. In dealing with mergers and acquisitions, private equity and securities fraud will also see growth.

I haven’t discussed bankruptcy. Bankruptcy has been flat, and with continued growth, the specter of new private equity and hedge funds dealing in distressed business, as well as distressed real estate, we’ll see many entities who would otherwise be moving for bankruptcy, doing out-of-court workouts. Banks are selling their loans, and the successor lenders are taking over the assets.

But, there will always be collection cases. The collection business is the key to other areas of practice, including representation of creditors in bankruptcy proceedings, creditors’ committees, and affiliated areas. Would I suggest to my daughter or son to become a lawyer? Yes. It is an honorable practice. One can make a very fine living out of it, and it is enjoyable. While there may be a current downturn, I believe the future is bright for young lawyers in the practice areas of demand, including the collection practice.