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Tough economy spurs growth in some legal sectors

San Diego's vibrant legal community should become more active in 2008, especially in the first couple of months, according to industry analysts.

Driving this activity will be the acquisition of partners and practices by local law firms, who are coming off strong performances in 2007.

"What you'll see is law firms locally (in 2008) trying to enhance their current market position by making strategic hires in specific areas of growth, like bankruptcy and, in particular, the subprime market," said Larry Watanabe, a partner with the legal search firm Watanabe Nason LCC. "You'll continue to see demand for intellectual property litigation and commercial litigation, because in a down economy, litigation picks up. And you'll always see continued demand for corporate M&A (mergers and acquisitions) lawyers."

Judybeth Tropp, director of externships and pro bono programs for the Thomas Jefferson School of Law, agreed that attorneys with life sciences degrees or backgrounds will continue to be in demand.

"In San Diego, we typically are trending toward biotech, with more and more biotechs popping up," she said. "One can't help but notice IP groups are ever growing at the major firms in town."

The effects of a slowing economy, along with the ongoing housing crisis, will manifest itself in the legal community as national firms in San Diego cut back certain practice areas.

"People are preparing for a rough corporate economy in 2008," Watanabe said. "Hopefully we'll stay off a recession, (but) people are fearful and concerned where the markets are headed. I see practitioners moving to different platforms, where they can use their expertise on a global level."

Most firm's land-use practices will still be thriving in the coming year however, according to Thomas Jefferson's Tropp.

"It's so important in our county to have really terrific lawyers that understand the nuances of land use," she said.

Tropp said public sector law in San Diego County is growing, especially among Thomas Jefferson students.

"San Diego can be proud of the excellence they bring to the fore," she said of the district attorney's office and the public defender's office.

The influx of national and international law firms, which have entered the San Diego market with increasing frequency in the past decade, likely will cool off, Watanabe said. And because of their high billing rates, the national firms stationed here won't be able to sustain practices in labor and employment or trust and estates, he added. Local firms or boutiques likely will pick up the slack.

"Increased billing rates at the major national law firms will continue to have a negative impact on partners in the labor and employment, real estate, trust and estates and health care areas," Watanabe said. "It will also affect partners' abilities to handle matters for smaller regional companies, which are unable to support the billing rate structures of these firms.

"(National) firms will focus on high-end, cost-effective practices," Watanabe added, "but they'll have to focus hard again on making sure they're profitable."

The new year will feature employment opportunities in San Diego for recent law school graduates, Tropp said.

"Students who do want to stay have options to stay," she said. "It's still a much smaller legal community than Los Angeles and it's not growing as rapidly as Riverside County.

"San Diego offers such a nice variety for students, and the culture is so mentoring-oriented," she added. "The San Diego County bar has gone out of its way to be very welcoming to students."

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