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Citibank's Law Firm Group has recently issued its mid-year financial assessment of the legal industry and it is not a pretty sight.  But that bad news is based on results as of June 30, 2008, well before the takeover of Freddie and Fannie, the bailout of AIG, the disappearance of WaMu and Wachovia and Merrill, and the bankruptcy of Lehman, not to mention the failure of the Congressional rescue plan, all of which portends even worse carnage to come.

The first half of 2008 looks very different from the previous six years.  Revenue growth was the weakest it's been in seven years--averaging 4.8% compared to the 10.6% 7-year average. With law firms continuing to add lawyers to their ranks (up 5.6%), a slowdown in productivity comparable to mid-2001 is taking hold, with expenses (up 10.1%) increasing faster than revenue.  Compensation costs are up 15%, well above the 7-year 10.1% average increase.

Practice areas like restructuring and bankruptcy that have been anti-cyclical in the past have not yet helped cushion the fall. 

Profits per Equity Partner dropped 9.1% during the first half of 2008 even though the 1.8% increase in the number of equity partners is substantially down from the 2.9% seven-year average.  Top tier firms suffered the most, falling from a 11.7% increase in PPEP in 2007 to a 11.8% drop, victims of the languishing deal/financings markets and an inability to be nimble in changed circumstances--the big firm head count increase doubled that of smaller rivals, which is in part why smaller firms had only half the drop in PPEP (5.3%) for the first half of 2008.

Interestingly, "international firms," those who have 10-15% of their lawyers overseas, have been subject to the same downturn, while "global firms," with 25% or more of lawyers overseas, have fared much better.  However, it may just be a matter of time before the global economy starts to throw out the same challenges to those firms.

Projections as of June 30 of PPEP for the year 2008 are flat to down 10%, indicating top-tier firms risk up to a 15% decrease, putting 2008 on track for the worse year since at least 2001 and maybe earlier.

Unfortunately, those numbers are likely to be rosy.  They do not take into account the recent paralysis in the credit markets, the enormous financial burden the government (and ultimately taxpayers) has taken on and the disappearance of several major banking clients.  Word of mouth indicates that many firms are holding back distributions to a level as much as 30-40% below last year's. Given the fall of Heller Ehrman and the teetering of a number of other law firms, those who register a 15% decrease in profits this year may be the winners. 

How to make the best of a difficult situation?  Tying associate bonuses to their and/or the firm's profitability may help motivate young lawyers and limit expenses.  Attrition has recently dropped dramatically so firms can winnow out unproductive lawyers and cherry-pick lateral hires that are consistent with their strategic plan, making sure they really know why those lawyers are leaving their old firms.   Making sure collections are current is also critical.  And this is the time to clamp down on administrative and other non-essential expenses. Finally, robust business development is more important than ever.

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The depression demon attacks lawyers with particular vengeance, and denial and secrecy have long been the response. The recent loss to suicide of prominent lawyers from across the country, and the near loss of others, has inspired the courageous to speak out, a first step toward turning the professional spotlight on a condition that is rampant, but also treatable.

Evidence of the problem is long-standing. A landmark 1991 study by Johns Hopkins University ranked lawyers first, among 105 professions surveyed, in the rate of clinical depression.  A 1992 OSHA report found that male lawyers in the US are two times more likely to commit suicide than men in the general population. Lawrence Krieger, a clinical professor at Florida State University College of law, who focuses on work-life issues for lawyers, has research showing that practicing lawyers exhibit clinical anxiety, hostility and depression at rates ranging from 8 to 15 times that in the general population. Research in North Carolina indicates that 11% of lawyers in that state think of taking their own life at least once a month.

After the suicide of several prominent Texas lawyers, including Kenneth Malcolm “Mack” Kidd, a justice on the 3^rd Court of Appeals in Austin, and Hermes Villarreal, a lawyer who had a loving marriage, three happy children, a successful personal-injury practice and was chairman of a community mental health facility, Texas State Bar Association president Martha Dickie commissioned a task force and video on depression last year as part of her focus on lawyer mental health issues. Over 1500 videos have been distributed. “Lawyers and suicide—it’s rampant,” says Dickie. “I am absolutely convinced that this video is saving lives.”

Daniel Lukasik, managing partner of a Buffalo, New York personal injury firm, became a courageous advocate of treating depression in lawyers after his therapist told him that one-quarter of his clients were, like Lukasik, lawyers suffering from the illness, yet there were no peer support groups. 

On a mission, Lukasik helped create the Committee to Assist Lawyers with Depression for his county bar association, which was recognized with a Certificate of Merit during the New York State Bar association annual meeting this year. He also created the web site www.lawyerswithdepression.com to offer lawyers information on the disorder. Further, he organized  in Buffalo this year what may be the first national seminar on attorney depression. 

The problem of depression is starting to be addressed at the law school level.  This year the 51,500-member American Bar Association Law Student Division launched a mental health initiative to help law students battling depression and anxiety. A mental health on-line toolkit is being offered to student bar organizations and law schools around the country. 

Complicating all these efforts to assist lawyers is the individual's fear of being stigmatized should their condition be known.  This year the ABA adopted a model rule that would grant conditional admission to practice law to applicants who have substance abuse or mental health conditions, for which in many jurisdictions applicants are deemed unfit to practice law. Applicants must demonstrate recent rehabilitation or successful treatment.

These and other initiatives to recognize and provide assistance for depression seem to be starting to have an effect.  Patricia Spataro, director of the New York State Bar’s Lawyers Assistance Program says that now 30-40% of their calls are related to depression, compared to almost zero only a few years ago. The New York City Bar’s Lawyer Assistance Program reports similar increases. “When I started with this program nine years ago, I actually had a lawyer with depression tell me that he wished he was an alcoholic because it would have been easier to deal with,” said Ms. Travis, director of that program.

In England, the Solicitors Benevolent Association, Solicitors’ Assistance Scheme and Law Care have all resolved to work more closely in helping solicitors cope with the pressures of modern practice. Lawyers in the UK, as in the US, spend so much time solving other people’s problems, they believe they should be able to handle their own problems as well, even though they have no expertise in this area, notes LawCare CEO Hilary Tilby. “Our joint aim is to help them recognize they have a problem and offer a solution for dealing with it.”

Why does such a debilitating illness strike the legal community so fiercely? Pessimism is an attitude that has been demonstrated to be highly correlated with success in the practice of law, but it is also a trait that is strongly associated with depression, particularly when coupled with ambitious, high-achieving, perfectionist, type-A personalities who put tremendous pressure on themselves.

The key is making sure lawyers know that there is assistance available that can make life and work more rewarding.

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In a recent article in The New York Times entitled “Girl Power at School, But Not at the Office,” Hannah Seligson gives some good advice to all working women, even those of the “post women’s right movement” generation in which she grew up. 

After feeling self-assured and equal to men in academia, Hannah found the workplace to be different: women undermining other women, men not taking women seriously--focusing on their appearance and “assistantizing” them.  

But she also recognizes that women can get in their own way in the workforce. Work skills women must develop, in her opinion, are a thick skin, the ability to promote oneself, and the ability to negotiate. She also recommends that women dump the perfectionism and create a professional network.

Here are some jewels to consider:

Rather than getting rattled by their feminine “sensitivity,” women have to “become impervious to the daily gruffness that’s a part of any job.”  

Seeking perfection can lead to paralysis and keep women from speaking up or taking risks. 

“Soliciting feedback… demystifies what your boss thinks about you and it also gives you the data to become a more valuable employee.”

“Reprogram your brain to think that girls do brag. Your job is a two-part process: one is actually doing the work and the second is talking about it in bottom-line terms.”

Since “women don’t have as much of a tradition of business networking (‘Do you want to go grab a beer?’ doesn’t quite roll off our tongues),” learning to ask colleagues specific questions about how to advance can be the organic approach to mentoring. 

Finally, women need to “speak salary.” Women often think they will be paid what they deserve, as long as they do the work. Follow the example of men who fearlessly ask for a raise over and over again, regardless of the response. As a Harvard Business School faculty member explained: ‘By and large women believe that the workplace is a meritocracy, and it isn’t.”

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