The decline in demand for the work of law firms in Australia has set alarm bells ringing across the legal profession - calling into question the sustainability of the old models, but creating opportunities for a new agile and technology savvy generation of lawyers.
The effects of the global financial crisis on Australia were delayed by the relative independence of its banking sector, and cushioned to some extent by the boom in demand for iron and coal, largely fuelled by China. Today the economy is under pressure: earlier this year an article in Forbes magazine placed China and Australia at the head of a list of seven countries "most likely to suffer a debt crisis" within the next three years. That is not to say that Australia is facing full blown financial meltdown. In fact GDP per capita growth looks healthy and should continue to stay buoyant over the next few years, but it's fair to say that complacency has been driven from an economy that has grown steadily for the last quarter of a century.
This uncertainty is affecting the demand for commercial legal services, which has trended downwards over the past five years, according to a 2015 report by The Melbourne Law School and Thomson Reuters Peer Monitor. The overall decline in demand is primarily attributable to the decline in demand for the industry’s three biggest practice groups (which between them represent 48 percent of all legal services provided): dispute resolution, banking & finance and corporate general, the report said.