“Sitzkrieg”–Why Lawyers Will Weather the Impending “Recession”

Immediately following the declaration of war against Hitler’s Germany in 1939, the uneasy populations of the allied nations went about their daily business; their lives as yet unchanged. In a gallows-humor attempt to explain this sudden onset, of, well, nothing particularly unusual, some cheeky Brit came up with the term “sitzkrieg”—the “sitting war” in contrast to Hitler’s “blitzkrieg”—“lightening war” against Poland. Of course, the “phony” war turned all too real soon thereafter, and lasted six years.

I couldn’t help think of the sitzkrieg as I sit here next to my three warm cats contemplating what many call inevitable, the first American economic recession of the 21st Century. It pains me even to mention such a possibility as I am: a) an incurable optimist; b) a shameless and blithe capitalist; and c) not an economist by any stretch of the imagination.

However, one can’t help but hear the voices that proclaim the impending doom of, not an economic implosion, but of a gradual slow-down of the steady growth we have been enjoying.

Of course, this will undoubtedly raise the issue of what impact the legal markets will face. It is nearly an aphorism that transactional work flowers during economic booms, and then wanes while litigation waxes during economic down-turns. It is certainly the case that the lateral litigation market has been lackluster after years of sustained growth. Thus, I will rush to be the first, perhaps, to proclaim the beginning of the end of this last long brush with bullish corporate practices. We no longer believe so innocently (as we did before 2001) that things that go up need never come down.

However, I don’t for one minute believe that this will be catastrophic for any solid corporate practice. It may merely result in allowing natural attrition to take its course. Further, it will only intensify the already tedious and long-drawn-out process that most lateral hiring is these days. Yet again, this is all the more to the good because I can assure you there has been little or NO frivolous or poorly-thought-out hiring going on, even in corporate circles. I do not see any widespread shrinkage in corporate groups looming on the horizon.

The result is that, as a profession, lawyers are going to ride out any impending “recession” that comes in the next 18 months, it one comes at all. The trick that I think most trained and traditional economic pundits are missing, is that the global economy has so much pent-up and ending demand for resources, that economic blips are being smoothed-out almost immediately. I liken this to the SF housing market. Whenever prices fall even by $5,000, as many more family can qualify to buy. What we end up with is, basically, is a stagnation or flattening of economic indicators. I don’t think that we can realistically call every loss of a point of annualized growth a “recession”. We perhaps need to go back to the well for a more descriptive neologism.

I’ll settle for an unending sitzkrieg.

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