The changing business environment has caused law offices to rethink the ways in which they deliver their services and staff their firms. Years from now, the financial crisis and resulting recession may be viewed as catalysts that fundamentally transformed the legal landscape. Some changes that are already occurring and that may have a lasting impact include:

• Corporate clients, concerned about rising legal costs, continue to press law firms to find more cost-effective ways of delivering legal services. Alternative fee arrangements, such as project- or outcome-based billing practices are gaining wider acceptance as a result. Also, companies are asking their outside law firms to lower costs by relying more on paralegals, contract employees and other legal staff who can deliver certain services at more economical rates.
• The difficult economy also has prompted in-house legal departments to re-evaluate how they can operate more efficiently. In addition to asking external law firms to rein in costs, many corporate legal departments have modified their use of outside counsel and are performing more work in-house. Some are selectively hiring paralegals and attorneys with needed specialties to enhance their internal capabilities.
• Midsize firms have benefited from the recessionary environment and may continue to do so. Because they can offer a lower cost structure than large national firms, they have attracted some prized clients away from large firms.
• After experiencing the effects of staff reductions on morale and productivity, going forward, both law firms and corporate legal departments may be inclined to adhere to a more flexible approach to staffing. They are increasingly recognizing the value of using contract attorneys and temporary support professionals to augment full-time staff. It is becoming more clear that this approach can help law offices better manage expenses, reduce the possibility of future layoffs and gain the ability to expand or cut back staff levels to meet changing demand for their legal services.
• As layoffs in the legal field have mounted, downward pressure on salaries has increased. At large law firms, in particular, base compensation levels for first-year associates are under close scrutiny and may be recalibrated. Moreover, with the current supply of legal professionals outstripping demand, it may take time for salaries at all levels to rebound.