Legal economics and international monetary policy

I think of the world as interconnected with some basic rules of human behavior. That is why I love reading analyses by other experts and trying to parallel issues in other disciplines with those in the legal profession. A case in point, the below quote is from an interesting article by NYU Economics Professor Nouriel Roubini about world monetary policy:

Simply put, we live in a world in which there is too much supply and too little demand. The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing.

The inability of unconventional monetary policies to prevent outright deflation partly reflects the fact that such policies seek to weaken the currency, thereby improving net exports and increasing inflation. This, however, is a zero-sum game that merely exports deflation and recession to other economies.

Perhaps more important has been a profound mismatch with fiscal policy. To be effective, monetary stimulus needs to be accompanied by temporary fiscal stimulus, which is now lacking in all major economies. . . .

Even the International Monetary Fund has correctly pointed out that part of the solution for a world with too much supply and too little demand needs to be public investment in infrastructure . . . .

So what is the connection to the legal profession? We attorneys also live in a world in which there is too much supply (of undifferentiated, general legal services) and too little demand (for those undifferentiated, general legal services). The result has been a persistent disinflationary, if not deflationary, pressure, on legal billing rates for most general practice attorneys.

The attorneys least affected by this are those that have adopted their own version of “fiscal policy.” Rather than simply slashing billing rates, accepting work outside their core competency, and hoping for the best, they invest in their future. These attorneys are coupling flexible billing practices with their own form of “fiscal stimulus” in the form of writing, speaking, and pro bono work. While this "investment" may not add to their immediate profitability line, it will allow them to develop a greater niche expertise and specialty, differentiating them from their competition, and allowing clients to choose them based on a specific expertise and the value they bring.

I have previously written on the need for attorney specialization, and others have as well. It is interesting, however, that the need and benefit to do so parallels the conversation around international monetary policy. Economics are, after all, just economics.

Next up for consideration: It is easy for any one to slap on a label that he/she is a niche expert for marketing purposes - how do clients and potential clients truly understand a professional's expertise by asking about their qualifications and past experience?

I would love to hear thoughts on any of the above.

The postings on this site are my own and do not necessarily represent the postings, strategies or opinions of the Mandelbaum Salsburg, P.C.