In 2018, experts suggest we keep our eyes peeled for the marriage of law and tech. It's coming in many forms: Think lawyers addressing cybersecurity issues, law firms delving into AI and incorporating programs that try to predict the outcomes of legal disputes.
Representatives from several New Jersey firms shined light on what an economy on an upswing means for the legal industry: More mergers and acquisitions, litigation and, ultimately, work for lawyers.
As one expert put it, “As the state’s economy shifts, so too does the legal work that derives from it,” suggesting firms need to be flexible and nimble enough to move with the changing of the tides — be it the potential legalization of cannabis, effects of the recent changes to the tax code, or something else yet to be defined.
Managing partner at Sills Cummins & Gross PC
The good news is that we are in a relatively good economy from the law firm perspective. When there’s a good economy, there’s more opportunity for legal work. It ranges from corporate deals to real estate opportunities, and even extends to litigation because people feel they have a little more money and they’re a little more willing to assert their rights.
With a new governor being inaugurated in a couple of weeks, it makes for new opportunities and new perspectives. The exciting thing about [Gov.-elect Phil] Murphy is that he seems to have a balance – a business background having come from Goldman Sachs – but he seems to be focused on issues of more economic equality which at the end of the day, if successful, will benefit the whole state.
Whether we’re talking about potential minimum wage hikes or employment issues (things like NDAs insofar as they relate to this current trend in sexual harassment), there are new situations that people will be moving into, and whenever there’s a new area I think lawyers are important to help with various things — legislation, advising clients, and in some cases, asserting and defending clients rights in court.
The potential legalization of cannabis presents a whole new area for law firms to work with. Even if there is no legislative change in New Jersey, there’s more investment in ancillary services and aspects of the industry.
The recent passage of the tax bill is going to be beneficial to many industries and the legal industries. I think the corporate tax reduction will spurt a lot more merges and acquisitions activity. It’s harder to get a merger done without a team of lawyers to guide you. I think the recent activity there will be a benefit to the industry throughout the state and country.
In terms of threats, we’re in a moderate Goldilocks economy: As long as we don’t screw it up, it looks pretty good. There’s always a chance, though, for an exogenous event (like 9/11) that could change the psychology of the economy, business or population. You can’t plan for it, you can’t anticipate what it will be, but you always have to assume it may happen and you have to be nimble enough to act accordingly.
Chief financial & operating officer, McElroy, Deutsch, Mulvaney & Carpenter LLP
I expect that the legal industry will continue to focus on innovation with continued investments in technology, infrastructure and automation. Though “technology” is hardly a new phenomenon in the marketplace, it will be incumbent on law firms to keep up, by collaborating with AI businesses and technology startups. Additionally, there may be a shift to invest in “sci-fi” programs that claim to predict the outcomes of legal disputes.
Law firms of all sizes are struggling to find balance. We have found that in order to excel in this somewhat turbulent legal environment, you must be cognizant of the need to constantly evolve. Internally, firms need to focus their efforts on transparency through initiatives, meetings and retreats on all levels. Firms will need to continue to devote time commitment to diversity and inclusion, in all areas, because that too provides the best representation.
Senior partner, Meyner & Landis LLP
Since 1962 Meyner and Landis LLP has been focused specifically on the needs of the business community, providing legal and business advice and solving problems as they arise. Our firm practices in banking, business transactions, creditor’s rights, commercial litigation, environmental law, corporate immigration and real estate.
Overall, our expectations for 2018 are upbeat and optimistic. The United States economy is growing at a 3 percent rate; the unemployment rate is at a 17-year low, around 4 percent; corporate profits are strong; and recently enacted changes in corporate tax rates are very favorable to our clients in the business community.
Laws and regulations in our key practice areas are changing constantly, particularly in banking, corporate immigration and environmental matters. This requires us to be proactive to anticipate and avoid legal problems in advance.
For 2018, we are seeing an increase in commercial transactions such as mergers of smaller businesses in lieu of succession planning, and in commercial real estate with value-added repositioning of space to alternate uses. There are many uncertainties in the corporate immigration space, and plenty of anxiety with the legal changes and new regulations emanating from Washington forcing employees to better track its workforce qualifications. We expect continued growth in our law practice in line with the strong commercial activities of our clients.
Managing Partner, McCarter & English
The legal profession, like many other industries, has experienced considerable change as a result of advancements in technology and globalization. Those changes have brought great efficiencies to the practice of law, but they have also brought significant competition to law firms. And so we must all adapt, because even in the face of relatively flat demand for legal services, there are tremendous opportunities for firms that stay ahead of the curve, as we continue to do, coming off a second consecutive record-breaking year.
Intellectual property, particularly in patents, continues to be an integral part of the statewide economy, and we expect that the growth we’ve seen in IP legal work will continue and possibly increase. The macroeconomics of any geographic market drive the legal work, and trends in New Jersey’s economy suggest that patent work will remain robust.
We also see commercial real estate and venture capital as likely growth areas. The trend lines for the state’s tech- and tech-enabled economy are solidly upward, so firms like ours, whose clients include startups, entrepreneurs and the early stage investors that finance them, should continue to see increases in the demand for legal work as companies form, raise capital and engage in M&A activity.
Preventing, identifying and responding to data breaches are an enormous concern to businesses, so legal practices centered on cybersecurity should flourish. We also expect that owners of retail property will pursue property tax appeals as their retail tenants struggle and seek rent reductions.
As the state’s economy shifts, so too does the legal work that derives from it. On balance, firms like ours, which have educated themselves on the changes and demands in their clients’ industries, and staffed and trained appropriately, will continue to grow.