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Jun 25

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Should we be using Latin for “the new normal”?

Lawyers love Latin and are known for using such phrases, shall we say, ad nauseum. Which is why I’m surprised I haven’t noticed one using Latin for “the new normal.” Instead, they’re just using “the new normal.” Perhaps it’s because attorneys reserve Latin only for topics they enjoy explaining to others. But “the new normal” is a sore point for the legal industry. Hence, no Latin.

In the past five days I’ve heard legal industry experts use “the new normal” several times to describe the industry’s depressed condition. One such instance was at a law society luncheon featuring an executive from a prestigious worldwide law firm. He explained that upon first recognizing an abnormally prolonged slowdown in the industry years ago, he interviewed several of his firm’s partners as to when conditions would turn around. They predicted a few months.  Six months later, with no meaningful turnaround in sight, he interviewed several more partners with the same question on his mind. This time they responded, “Welcome to the new normal.”

That interview is now long-dated. And, so far, the partners were right. The speaker proceeded to convincingly validate just how right they were with charts displaying various year over year industry performance metrics, each showing consistent declines. He then commented that, pre-recession, his firm required its associates to bill between 1,900 and 2,000 hours per year. Now average annual billings are closer to 1,600 hours per associate.  Judging from the post-presentation Q&A session, I almost expected Prozac prescriptions to replace dessert.

A second widely-published occurrence of “the new normal” came with Weil, Gotshal & Manges LLP’s recent announcement of layoffs for associates and staff and big pay cuts for 10% of the firm’s partners. The prestigious firm has offices worldwide, including a presence in Shanghai, Warsaw, Dubai, and Budapest, according to its website. It employs 1,200 lawyers and, according to the Wall Street Journal, has companies such as General Electric and General Motors paying its fees. The WSJ article quotes executive partner Barry M. Wolf, saying:

“We all expected (work) would pick up meaningfully this year, but it clearly hasn’t. I think we’ve come around to the view that this is the ‘new normal’.”

The article describes the scene that unfolded in the conference room at the firm’s Houston’s office, which appears to have taken the brunt of the layoffs.

“Weil associates in the Houston office were called to a meeting in the boardroom at 9:30 a.m. local time, according to several attorneys there, about an hour after Mr. Wolf’s email went out. They sat around the table in the center of the room as John Strasburger, the Houston office’s managing partner, delivered news of the layoffs, adding that he had opposed the cuts, according to several associates in the office’s complex commercial-litigation group, which was laid off en masse. One associate started crying. Others had a “deer-in-headlights look,” one lawyer said. Some pulled out their phones to text their spouses and significant others.”

The new normal.  It seems to mean there is no return in sight to pre-recession conditions. The industry is no longer down, not because it has rebounded, but because no one expects a rebound. Get use to it or make other plans, they’re saying, because it’s not about to change.

For those of us in the legal industry, let’s hope the “new normal” chorus is wrong. Meanwhile, perhaps we can fill some of those non-billable hours by coming with just the right Latin phrase for “the new normal.” For starters, and coming from someone who simply drew upon the first English-to-Latin online dictionary he could find, how about novus vulgaris?

About the author

Eric Madsen

Mr. Madsen is a Chartered Financial Analyst (CFA) charterholder and a Manager at Fulcrum Inquiry, a finance and economics consulting firm that performs economic damages analysis involving commercial litigation, financial investigations, business valuations, and forensic accounting. He also holds an MBA from the UCLA Anderson School of Management and a B.S. in Economics. He conducts expert analysis in finance and economics. Mr. Madsen may be contacted at 213.787.4122 or at emadsen@fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/06/should-we-be-using-latin-for-the-new-normal/

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