My friend and UCLA colleague James Park has published a preliminary draft of his study of Los Angeles Law Firms Before and After Recessions.
This report thus examines three recessions – the 1990 recession, the 2001 recession, and the 2008 recession – and how they impacted Los Angeles law firm offices. We collected data on a sample of major Los Angeles law firm offices – some of local firms, some of out-of-state firms – and examined how this group of firms fared during these three recessions.3
Our main conclusion is that significant reductions in the number of attorneys employed by law firm offices after a recession largely reflect reversals of high growth prior to the recession. The 1990 and 2008 recessions in particular reversed substantial increases in the size of Los Angeles law firm offices. In contrast, the 2001 recession had a limited impact on Los Angeles and mainly had lasting effects with respect to Northern California firms. The 2020 recession may only have a modest impact on Los Angeles law firm offices because they have been conservative in their growth for the past decade.
Recessions have not only affected the size of law firm offices, they have prompted changes to the law firm model in Los Angeles. The large, leveraged model of the New York City law firm never firmly took root in Los Angeles. Examining the last three major downturns and their impact on Los Angeles provides some insight into why Los Angeles law firm offices differ from their New York City counterparts.
