Firms showing signs of recovery in years following recession

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When the economy tanked in the late 2000s and early 2010s, even large law firms in Milwaukee, far away from New York, felt the effect.

Nic Wahl, managing partner at Milwaukee-based Godfrey & Kahn, said he and his colleagues saw clients become more discriminating in when and how they chose to seek legal services.

“For some it meant simply taking on more risk and engaging outside counsel only for significant or critical matters. And for others it meant expanding their legal staff and bringing work in house,” Wahl said. “Combine that with efficiencies caused by advances in information technology and it has meant less overall demand for the industry.”

More than 300 miles away in Polk County, Kathleen Gionis said there was a marked slowdown during the recession years in the number of business opportunities coming to her two-attorney firm, Gionis & Murtaugh, which specializes in family law.

“It suddenly became different,” she said. “The phone didn’t ring as much. Business slowed down. I was worried. We never did lay off anybody, but I thought about it.”

Lester Pines, senior partner at Madison-based Pines Bach, says he believes the bad economy led many firms to postpone hiring. Large firms and law schools felt the brunt of the recession’s harmful effects. It’s only recently that they appear to be recovering, he said.

“The trend in BigLaw has been consolidation and growth, and that seems to be accelerating,” Pines said. “But that’s only one segment of the legal industry. Other segments really were not heavily affected. I don’t see that there are any lingering effects. Law is still a pretty stable profession.”

Gionis and other top officials within law firms appear to agree with Pines.

Gionis said the feeling that there was less work likely had more to do with perception than reality. Business was harder to come by. But there wasn’t so much less of it that she and other lawyers had to lay off staff or close up shop.

“Business was still going along,” Gionis said. “People were still getting divorced but the psychological aspect of it worried a lot of attorneys.”

Back in Milwaukee, Catherine La Fleur, who owns the La Fleur Law Office, agreed that the work has come back, noting that many of the Marquette University Law School graduates she taught this semester have found jobs or are close to getting them. The family-law attorney is also able to find plenty of work for her two law clerks and a young lawyer she employs.

For his part, Wahl says Godfrey has seen a recovery, particularly in its litigation, general business and mergers-and-acquisitions practices.

And Godfrey is not the only firm showing encouraging signs. Pines said large law firms generally appear to be expanding and consolidating. Various Wisconsin-based firms have added offices and taken part in mergers in recent years, following a national trend.

For example, the Missouri-based Husch Blackwell merged in 2016 with the Milwaukee-based Whyte Hirschboek Dudek.

Milwaukee-based von Briesen & Roper opened other offices in the state last year and absorbed two firms in January. The large Milwaukee-based firm Foley & Lardner merged with Dallas-based Gardere Wynne Sewell in March.

Wahl said there’s no one single reason why firms merge. Mergers can be risky, he said, because they often introduce change into something that was likely a smooth-running operation. Although mergers may be an industry trend, Wahl said  they aren’t in the cards for Godfrey.

“From our standpoint, we really like where we are in the marketplace: focused on all the great companies here in Wisconsin,” Wahl said. “So while we continue to look to add talented people to our ranks at all levels, our focus is usually at the individual or small-group level and not any large combination.”

In the northern part of the state, Stewart Etten, president of Wausau-based Ruder Ware, said his firm has been hiring primarily to replace lawyers who are retiring. Ruder Ware, with more than 40 lawyers in its ranks, is the largest firm in northern Wisconsin.

“There hasn’t been a lot of growth in a lot of the law firms in this area of the state,” he said. “Our numbers have remained pretty flat until recently, when we opened the office in Green Bay.”

That office opened in May. Etten said he and his colleagues will be weighing any future opportunities carefully.

“It’s a hope certainly for our firm that we’re going to expand the practice,” he said.

Both Wahl and Etten do have some causes for concern. Etten said his firm is increasingly competing with non-lawyers, whether they be online legal service providers such as LegalZoom or specialty firms that offer services normally provided by a law firm.

Wahl believes the changes the industry has seen will only accelerate.

“As an industry, we need to continue to evolve to make sure we are adding value to our clients and their operations because the competition, both from within and outside of the traditional legal arena, is intensifying,” said Wahl.