Law firms have already started to feel the effects of the bubbles bursting, as layoffs are starting to spread in various practice groups focused on financial affairs.
Dent focuses on bubbles, or times when certain things become overpriced. The theory is that there will be a series of bubbles this decade, and once the last of them pops, we will enter into the next great depression.
There have been three bubbles so far this decade: a tech bubble, a housing bubble, and a lending bubble. These have popped, as has been amply demonstrated by events in the past few years.
The next major bubbles, Dent says, are in emerging markets: the economies of South America and Asia. These bubbles are predicted to burst later this year, followed quickly by the minor bubble of technology stocks. The last major bubble to burst will be oil and commodities stocks. After that, inflation, the aging Baby Boom population, and other factors will lead us into the next great depression. Dent predicts this will happen at some point between 2010 and 2012, when the economy will crash once more, a la 1929.
Law firms have already started to feel the effects of the bubbles bursting, as layoffs are starting to spread in various practice groups focused on financial affairs. If Dent is correct, international practice groups and perhaps patent law will start feeling the results of the bubbles popping early in 2009. Resource lawyers also will feel the pinch as commodities and oil plunge, though the rest of us may welcome relief at the gas pump. Bankruptcy and other practice areas will probably pick up. In the long term, though, there will be a generational shift from the star Baby Boomer partners and lawyers as they retire.
There should be some turbulent changes in the times ahead. Regardless of whether Dent is correct in his specifics, it is clear that the turnover from the Baby Boom generation and decreasing workforce will lead to some interesting developments.
Savvy lawyers should keep an eye on the emerging trends in the marketplace. If at all possible, try to maintain a diversity of skills so that if your practice area goes belly up, you are still valuable to your firm, or at least to some firm.
It might also be prudent to save what you can, though this is good advice regardless. You never know when you will be let go or your firm will decide it can no longer afford to keep you.
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