September 30, 2009
SAN DIEGO DAILY TRANSCRIPT
By Doug Sherwin
SAN DIEGO – The San Diego legal community has weathered the economic downturn better than other regions, according to local law firm officials.
The area’s mid-sized and small firms have even benefited from the recession as clients of national and international firms are turning to them for cost savings.
“In a down economy, litigation typically is going to be the driver,” said Larry Watanabe, a partner with the legal search firm Watanabe Nason.
While the corporate market on a national and international level is starting to pick up, San Diego — with its venture-based entities and startups — hasn’t been as fortunate, according to Watanabe. Venture capital financing still is difficult to attain these days, he said.
The legal analysts agreed that the recession-related layoffs are over as law firms have “right-sized” their staffs. San Diego weathered the cutbacks fairly well.
A number of firms are currently reassessing their market positions and seeing whether an office in San Diego makes sense to the firm’s overall health, according to Watanabe. He noted that firms opening new offices in San Diego stopped about a year ago.
While new offices won’t be opening, Watanabe said he thinks in the next year or two there will be a significant amount of lateral movement among partners switching firms.
“The state of the legal industry is going through a serious reassessment,” Watanabe said, adding, “This recession will teach law firms. Everyone said it’s been a valuable experience because we haven’t gone through it before. It will teach (firms) about growth and in terms of overhiring in particular practice areas that might be vulnerable to a downturn.”