We are very excited to announce several significant new Envision developments and are

utilizing this final issue of LegalMarketingNews to tell you all about it. Moving forward,

you will be able to go to www.insidelegal.com to catch up on the latest legal technology

 marketing news and information. Below you will learn about our new blog

Contents

U.S. Legal Industry Overview

Inaugural InsideLegal Summit

Launch of InsideLegal Blog

U.S. Legal Industry Overview

Understanding the Landscape

4th Edition - Updated for 2008

Do you and your company understand the legal marketplace? Do you know where to go for statistic and trend information? Envision Agency has been involved in marketing to law firms for years, and we cannot tell you how often we come across companies who are either unaware or misinformed about basic legal statistics. We are referring to information that builds the basis of any market analysis or sales plan - How many law firms are there in the U.S.? What do the top rankings in the industry measure? Where can I go for insightful electronic discovery- specific information? Here is a breakdown of important industry statistics that we have compiled from various sources. Please note that this “overview” is a compilation of industry survey information, and is no means an exhaustive list of legal statistics, research and trends.

• There are approximately 1,354 law firms in North America with 100 employees or more (~40+ attorneys). Of those, 375 firms have 250 employees or more (~100+ attorneys).

• Firms with 100 employees or more account for less than .5% of the entire US law firm market. 65% of all U.S. firms have 2 to 4 employees, 9% higher than last year.

• 97% of all U.S. firms and legal service providers have less than 25 employees (~10 attorneys). This represents a 2% increase compared to 2006 statistics.

Am Law Revenue Rankings

• The “Billion Dollar Revenue Club” expanded to eleven firms in 2007. Skadden Arps continues to lead the pack with $1.85 Billion in gross revenues, and new club members include DLA Piper US; Greenberg Traurig; Kirkland & Ellis; and Mayer Brown.

• 49 of the 2007 Am Law 100 firms had gross revenues exceeding $500 million, 8 more than in the 2006 ranking.

• Wiley Rein achieved the largest 2007 Am Law 100 revenue increase with 169.5%, moving up 76 rankings to 64th overall.

• The Am Law 100 profitability index looks at a firm's ability to convert revenue into profit and demonstrates who most effectively balances leverage and overhead for the highest possible firm profits. The top five Am Law 100 most profitable firms include Wiley Rein, Cadwalader, Dechert, Paul, Weiss and Cahill Gordon & Reindel.

• The Am Law 200 revenue gap widens: Despite solid numbers -- increases of 10 percent in gross revenue, 5.3 percent in revenue per lawyer, and 6 percent in profits per equity partner – “Second Hundred” firms continued to lose ground to their larger counterparts in 2006.

Technology Surveys

2007 ILTA Technology Purchasing Survey:  In 2007, ILTA in cooperation with Envision Agency, conducted its annual IT purchasing survey of ILTA member firms with 100+ attorneys. What’s new?:  Budgets are way up, but only among law firms with under 200 attorneys; small firms (under 200 attorneys) are implementing and planning major software purchases, larger firms are focused on infrastructure, hardware upgrades, and innovative mobility solutions; Law Technology News is the most popular legal technology publications and blogs such as Law.com, TechnoLawyer and DennisKennedy.com are finally making a noticeable impression.

ILTA’s 2007 Technology Survey: There were 499 respondents representing firms with attorney counts ranging from 3 to 4,700. Compared to larger firms, smaller firms are:

• More likely to buy instead of lease new technology.

• Less likely to bill clients for faxes, scanning or copies printed by laser printers.

• More likely to have users working with two different word processing programs.

Compared to smaller firms, larger firms are:

• Much more likely to have attorneys using laptops full-time.

• More likely to have scanner work flow software (e.g., eCopy, AccuRoute).

• More likely to provide financial support of PDAs and have a much higher adoption of PDA usage.

• More likely to have or be working on a matter-centric interface of their systems.

• More likely to employ a service level agreement to define expected levels of customer service for the firm.

Electronic Data Discovery Trends:  Fifth annual Socha-Gelbmann Electronic Discovery Survey: According to George Socha and Tom Gelbmann, co-producers of the annual Socha-Gelbmann survey, the 2007 report examines the demands for and consumption of commercial electronic discovery services and software. The survey informs consumers of electronic discovery software and services and provides an independent view and ranking of the best in class providers.

For a fifth time, the survey includes EDD market size information (covering 2006 calendar year), including:

• 2006 commercial EDD revenues were about $1,952 million, up 51 percent from 2005;

• The top 30 providers collected about $1.08 billion;

• An additional 550-plus vendors accounted for another $592 million;

• "Do-it-yourself" firms (law firms and companies doing EDD work they otherwise would have sent to a provider) represented $130 million.

Judging from consumer and provider expectations, the authors anticipate that the market will grow at approximately 33 percent from 2006 to 2007; 28 percent from 2007 to 2008; and 23 percent from 2008 to 2009. If these growth estimates are realized, the EDD market will exceed $4 billion by 2009.

According to Hildebrant's 2008 Client Advisory, "2007 was one of stark contrasts for the U.S. legal profession - a story of two very different years rolled into one. Although there were some signs of economic trouble on the horizon (rising interest rates, high oil prices, and a sharp downturn in the residential housing market), firms grew at a healthy pace in 2006, and there were expectations that growth would continue in 2007. The first half of 2007 not only met these expectations but exceeded them, with firms around the country reporting high levels of activity. In the third quarter, however, the picture changed dramatically. In most firms, productivity dropped, in some firms significantly, as the growth in business subsided, driven by the precipitous drop off in structured finance work triggered by the sub-prime mortgage crisis, a decline in M&A and transactional work due to a growing sense of uncertainty in the economy spawned by fears of a recession and resulting in an overall slowing of economic activity, and a continuing softening of the litigation market.

Continued Consolidation and Segmentation of the Market. During 2007, consolidation activity continued in the legal market with no slowing anticipated in 2008. There are signs that some firms may be adopting a merger strategy in an effort to grow their way into profitability. There were 55 mergers involving U.S. law firms during the past year, roughly similar to the preceding three years. There were 19 reported dissolutions of law firms in the U.S. during 2007, up from the 9 reported in 2006 - the highest number Hildebrandt has seen in recent years.

Continued Global Expansion. The number of U.S. firms with foreign offices remained fairly stable – 106 among NLJ 250 firms in 2007, with 35 new international offices being opened by NLJ 250 firms during the year. Notably, there was an 11 percent increase in the total number of lawyers practicing in foreign offices of NLJ 250 firms – 15,231 in 2007, compared to 13,707 in 2006."

Inaugural InsideLegal™ Business Summit

Envision Agency has unveiled the InsideLegal Summit, a boardroom-style business briefing event, exclusively focused on important business issues affecting the legal technology industry. The first event was hosted by Microsoft Corporation, February 4^th, and covered the business side of the legal technology industry – what it is like to market to and do business in this space.  What made this event unique was the caliber of the attendees; the refreshing approach to topical discussions (debate formats and open forum); and the eclectic mix of topics - all selected based on various attendee and industry insider feedback.  Topics covered in the first event were:

• “Pay to Speak” trend – Some industry events are beginning to sell speaking opportunities to vendors in bundles with track sponsorships. 

• Industry consolidation – The trend of larger companies buying up smaller vendors. Large companies seeking “end-to-end” application via acquisitions/companies of all sizes being up on the auctioning block.  Is it every company’s goal to be an acquisition candidate?

• Vendor byline articles – Some publications are no longer (or never have) allowing vendors to contribute articles focused on industry trends, subject matter expertise or technology direction.

• UK/US legal industry comparison – What are the major differences between the two and how are companies adapting in their efforts to do business overseas.

ThiThis was the first in what is bound to be a successful series of summits throughout the year – each with different topics and formats.  If you are interested in attending a future InsideLegal Summit, please contact JoAnna Forshee with your contact information as well as any topic suggestions.  Also, read the full press release here.

What makes this blog unique is not only the breadth of legal technology topics covered, but also the array of contributors and opinion variety. InsideLegal’s guest blogger program will allow readers to glean interesting content from a collection of industry experts including consultants, vendors, firms, media, as well general business and strategy contributors.  Other InsideLegal features include “tech battles” comparing competing software and service vendors against one another in an application-specific “war of words”.

Read more about the launch here.