Legal Sector: Is Current Boom Configured for 2008-Type Bust?

Paul, Weiss, Latham, Skadden, Kirkland & Ellis. Quinn Emanuel and more. The good times have been rolling. Both in litigation and transactional. For example, Paul, Weiss, in addition to the season/special bonuses, is throwing in another discretionary one. Litigation-only Quinn Emanuel's Profit Per Equity Partner reached an average of $9 million. 

But Thomson Reuters discerns in the pattern of the current boom trouble - the big kind - heading toward much of the legal sector. In its 2026 Report on State of the US Legal Market it fingers peril. Here's a snippet:

"Today’s legal market dynamics (represented by booming demand amid instability, runaway expenses, and universal optimism) closely mirror the conditions that preceded previous industry downturns in 2007 and 2021."

Explicitly, what is signaling trouble ahead is rooted in the intersection of the law firms' surging expenses for technology and talent and client discontent that the billable hour keeps increasing and is so standard (90% of work billed by the hour). To capture that state of affairs it's fitting to apply the iconic line of poetry from WB Yates' "The Second Coming": Things fall apart; the centre cannot hold.

A common mindset among in-house counsel is that a contraction could occur in mid 2026. That screams more cost-efficiency. It's quantitative. They are looking at outcomes associated with billing, not inputs such as the number of hours. The buzz for all that is: outdated.

Some law firms will have the financial reserves and confidence to weather another 2008 perfect storm. 

When voted in as chair of Paul, Weiss in 2008, Brad Karp had enough faith in the future to make two key decisions. He didn't lay off associates. And he took on the risk of transforming the firm from Wall Street litigation to one also having a dominant presence in transactional practices. Karp highlights those moves in the podcast "Law Disrupted" hosted by John Quinn. The famous quip from that is that he lost sleep about the decisions then and is still losing sleep. The guy has no comfort zone. 

That's why I leverage him as a role model in my coaching. I explain to clients the dynamics embedded in the old business adage: Nothing fails like success. The reasons why range from relying on outdated formulas for winning to hubris. The latter almost did in Bob Iger when he returned for a second round as CEO at Disney.

Success is a mental game. Failure comes from being done in by the “committee” in your head.

Together, we reprogram your thinking. Then we change your story. And, unleash success.

Intuitive Coaching. Special expertise with transitions, becoming a solopreneur and aging. Psychic/tarot readings, upon request. Complimentary consultation with Jane Genova (Text 203-468-8579, janegenova374@gmail.com). Yes, test out the chemistry. Zero risk.

Don’t give up before the miracle.



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