Specifically, people are having far fewer children and living much longer than at any time in rec0rded history, which means that by the year 2050, 22% of the world’s population (more than three billion people) will be over 60, twice today’s rate. We already knew that in developed countries, the birth rate has fallen to 1.6 children per woman (below the replacement level of 2.1), but some people will be shocked to learn that the birth rate in developing countries — 5.2 children per woman as recently as 1970-75 — has dropped to 2.6.  At the other end of the cycle, worldwide life expectancy will increase 8 years (from 68 to 76) by 2050, reaching an average lifespan of 83 in rich countries. What that comes down to is far fewer workers supporting far more retirees (by 2050, there will be two adults aged 20-64 for every adult 65 or over, half today’s ratio), which figures to result in dramatically lower levels of productivity than we’ve seen for many decades.

As The Economist explains at length, this is an extremely serious issue for every country, with financial consequences that dwarf the expected impact of the fiscal crisis. The legal industry isn’t in the top 100 things that governments will worry about in this regard, but if you have any interest in the profession’s long-term future — which is to say, if you expect to be in practice 20 or more years from now, or if your firm plans to be a going concern in 2050 — you should be thinking today about the potentially devastating combination of demographics and the simple passage of time.  Here are a few places to start.

1. Get ready for the end of retirement, warns The Economist: “few governments, employers or individuals have yet come to terms with where retirement is heading: the end of the whole concept. Whether we like it or not, we are going back to the pre-Bismarckian world, where work had no formal stopping point.” Unless you’ve made a boatload of money by 65 and managed it very well, you should assume you won’t be retiring then or anytime close to it. Picture older partners staying on with a firm indefinitely, starting with those whose investments were decimated in the market crash and can’t afford to retire. Active lawyers in their 70s and 80s will become commonplace, perhaps as Net-connected solos working with select clients from home on a full- or part-time basis.

2. Four generations in one firm will not be unusual. Keep in mind that the Millennial Generation has run its course; since the turn of the century, every new baby has been part of the next cohort — call it Generation Z for the moment. The first Z’ers will enter law school around 2025 and the practice of law by 2030. During the 2030s, law firms will include young Z’ers, Millennial partners, scattered 60-something Gen-X holdovers, and a surprising number of aged Boomers still cranking out work into their 70s and 80s. Generation Z won’t be a huge presence: Millennials will be by far the most numerous and powerful generation in law firms, since the slimmed-down firms of the future won’t require the vast grazing fields of associates familiar from the 20th century.

3. The massive partner incomes of today could well be considered relics of a bygone era, reminiscent of how we now think of railway barons’ fortunes. Partly, this will be because the revolution in the legal services marketplace will take billions of dollars away from law firms, as outsourced practitioners and sophisticated technology snap up formerly lucrative lower-end lawyer work.  But it’s also because there will simply be far fewer working-age adults –  industries of all kinds are going to be smaller and less lucrative than before. There won’t just be  fewer lawyers to do the work; there’ll be fewer clients to provide it.  Barring major breakthroughs in the latent legal marketplace — lawyers learning to sell preventive legal services and good legal health services to clients that competitors can’t — the volume of legal work ought to be lower, just like everything else.

4.  Unfunded pension liabilities could crush some firms well before 2050. Those employees (staff as well as lawyers) who do eventually retire are going to live longer, and their numbers will multiply as the Boomers finally slide out of working life. This will constitute a major ongoing cost center for firms, and if those liabilities aren’t funded, bankruptcy is a real possibility, as a recent ABA Journal article pointed out. The fear of massive pension obligations will motivate firms to cajole their elderly employees into staying on in some paid capacity, if for no other reason than to delay having to provide them retirement benefits. If your own firm hasn’t addressed this yet, it could be in serious trouble.

5. Say goodbye to a lot of law schools. If the coming wave of legal education reform hasn’t already knocked many law schools out of the game, they can expect to be finished off by a simultaneous drop in both the supply of law students and the demand for new law graduates. The profession will have enough trouble finding work for the older lawyers who won’t or can’t retire; there just won’t be a compelling business case for many new hires. And remuneration for new lawyers figures to drop — keep those clippings about $160,000 starting salaries for posterity — making law school a less attractive option. It’s not a stretch to anticipate that half the law schools in your country will be gone by 2050 — a legal education system that grew fat from the Boomer years onwards simply won’t be able to survive a period of scarcity like this.

These won’t be entirely dire outcomes — there are good news stories here. Many lawyers in their 60s have long felt obliged to quit the profession even though they still had contributions to make and wisdom to pass on; the bias against older workers is as prevalent in the law as anywhere else. And the legal profession today suffers from serious bloat; a little demographic-powered surgery would not be a bad thing. But the force and breadth of the upheaval will still come as a shock to us, because it’ll be incredibly different from what we’ve long assumed is normal but is in fact a product of a particular demographic period that’s now ending. As The Economist points out, the US set its retirement age at 65 at a time when the average American died at 62. Lengthy retirement is a very recent phenomenon, and its time is already ending.

So start wrapping your mind around having to work well into your 70s or even later, with associates 50 or even 60 years your junior, for much less money than today’s lawyers take for granted. Unless you’re 50 or older, this likely describes the legal profession you’ll encounter when you reach the soon-to-just-another-age of 65 — and even 50-something lawyers should proceed carefully. Of all the trends now acting to change the practice of law, this one might be the most significant — and it’s certainly the only one that’s flat-out guaranteed to happen.

In a survey of 61,297 partners in 1,562 U.S. law firms of all sizes (from 50 or fewer lawyers to more than 700), the total percentage who were white was 94.6%.

Let’s look at that slightly differently, to help it sink in: the total percentage of all minority lawyers was 5.4%. For minority women, the number shrinks to 1.65%. That is to say, there were 1,011 female minority partners in this survey, or about two-thirds of one lawyer per firm. If you lined up 100 typical partners at U.S. law firms, the first 94 would be white (and the first 81 of that group would be male). The last five would be members of visible minorities; only the final, 100th lawyer would be a female member of a minority group.

I mean, come on.

At least the profession is starting to talk about this, though I’m not betting heavily on an imminent change. I don’t have anything else pithy to add. I just thought you might want to sit and think a little about that 100th partner.

Baby boomers are retiring and the number of young adults behind them is on an irreversible slide. Starting in 2011, Canada’s workforce will lose two workers to retirement for every one that enters it. The ratcheting price on youth is a sign of things to come for the rest of the country as an aging population forces provinces to compete for dwindling numbers of young people.

Law firm associates’ salaries are already rising separate and apart from a talent shortage; in time, firms seeking to hire new lawyers are going to find out just what a full-blown seller’s market looks like, and they won’t enjoy it. I can see two long-term trends emerging from this.

First, those organizations and regions in danger of losing talent (i.e., most of them) will continue to look for ways to staunch the flow. Nova Scotia, according to the article, is introducing tax breaks to entice younger Nova Scotians to stay or return. The drawback to that approach is that if you’re trying to compete with Toronto or Calgary (or for that matter, London or Hong Kong) on money, you’re outgunned from the start. It will likely be a stretch just to be in the ballpark of the highest offer, and there’s only so much you can spend to keep up.

Consider instead the lawyer in the Citizen article, who’s returning home to Halifax because it’s a better community for her than Ottawa. Successful lawyer recruitment could in future be less about the firm and more about its environment. Forward-looking law firms could start getting actively involved in their own communities’ efforts to become more attractive to tomorrow’s scarce young worker. They’d join forces with other local organizations and identify potential opportunities and obstacles to young professional recruitment and retention.

Are local schools plentiful and effective? Is broadband access easily acquired and reliable? Are there parks and green space for families? Or, do poor transportation facilities and few cultural centers make for a sense of isolation? Are break-ins and petty crime more than just a nuisance? Are property taxes spiraling out of control? These are the sorts of questions that potential law firm recruits will be asking, as much as (maybe even more than) salary, benefits, hours and advancement opportunities. It stands to reason that the stronger your community base is, the more benefits you’ll have to offer — benefits that won’t cost your bottom line.

The second potential trend is that associates — or, to draw it more broadly, non-equity employees — could simply become too expensive to keep. Associates’ billable hours prop up a lot of PPPs (partnership profit pyramids, to hijack the acronym), but corporate clients in particular are losing patience with the current model and starting to push hard for cost containment. The supply of young talent is now beginning to dry up, so its price will only continue to rise just as clients apply more sophisticated analytics to their legal bills. It’s not hard to see a point where the traditional associate becomes transparently too expensive for the value provided.

What will happen then? Maybe we’ll see more firms unwilling to take on and train a junior lawyer through the first three years of his or her practice, preferring instead to hire only experienced laterals. Maybe we’ll see law firms finally take offshore legal service providers seriously. Maybe, in the most radical scenario, we’ll see firms forced to rethink and perhaps restructure their business models altogether, to cope with more exits at the top and fewer entrances at the bottom. Law firms are built the way they are in part because of the accident of late 20th-century demographics; the availability of talent in the early 21st century might just require a new model altogether.

Most firms haven’t been especially rigorous in defining the roles and supervising the development of their associates. It may well be that associates are about to become too scarce and too expensive for that to continue.

After making an offhand comment in a previous post, that only about 10% of all Canadian lawyers were in large law firms, I began to wonder if that was, you know, accurate. So I checked the statistical breakdowns available at the Federation of Law Societies of Canada website and confirmed that yes, out of 79,147 active law society members at the end of 2006, 7,282 were in law firms with 51 or more lawyers, so the actual figure turns out to be closer to 9.2%.

But then, as often happens when I come too near a demographic breakdown, I became intrigued by a related issue: this time, the relative increase or decrease in large-firm membership over time.

Obviously, in the popular imagination, the last ten years have seen massive big-firm expansion, thanks mostly to steady growth by established players like McCarthys and Gowlings or mergers of smaller regional players into megafirms like BLG or Faskens. That perception has been aided by trade magazines like Lexpert that focused on the biggest firms (and a few high-profile urban boutiques) to the exclusion of other law practices. At the other end of the spectrum, we’ve also heard about the challenges facing sole practitioners and lawyers in smaller centers, the difficulties competing with title insurers and paralegals, and we would tend to expect that the day of the solo is ending.

Well, I ran the numbers and came up with a few charts that might be of interest. First of all, I compared types of private law practices in 1996 and 2006:

This data is not as complete as I’d like: the ’96 numbers don’t have any data from the Barreau du Quebec or the Law Society of New Brunswick, and the ’06 numbers are still bereft of input from the Barreau, although happily, the Chambre des Notaires is included in both sets.

What struck me first of all was the 15-point rise in sole practices as a percentage of all law practices over the past ten years. Most of that growth came at the expense of small, 2-10 lawyer partnerships, which lost about 2/3 of their numbers — half to solos, it would appear, and half through conversion to professional corporations, which came available for the first time in many provinces over the past decade.

But the really striking fact, to my mind, is that the other three groups — 11-25 lawyers, 26-50 lawyers, and 51+ lawyers — stayed virtually the same over that period as a percentage of all practices. So in big-picture terms, the only real evolution among law practice distribution from ’96-’06 was a dispersal of lawyers from small firms into sole practices and a near-100% increase in the number of professional corporations nationwide.

That’s all well and good, you say, but “51+ lawyers” doesn’t begin to reflect the swelling ranks of the biggest firms over the past ten years. What we need to look at is the total number of lawyers in these firms, and compare them decade-to-decade. True enough:

Again with the caveats: the FLSC’s statistical summaries are very good, but they didn’t provide breakdowns of the number of lawyers in professional corporations in either ’96 or ’06, so I was obliged to omit the corporations from these charts. But since we’re only looking at law firms in both years, at least it’s an apples-to-apples situation. So, what have we got?

What we’ve got is stratification — growth at the ends of the law-firm spectrum, thinning in the middle. Solos and big firms constituted about 41.6% of the private Bar in 1996. Just ten years later, that had grown to just slightly over half — 50.1%. Again, the greatest loss was felt in the smallest non-sole practices, but all three of the median-sized law firm groupings saw an overall decline in lawyer personnel. This confirms the general impression that the biggest firms are taking a greater slice of the overall lawyer population. But it also comes as something of a surprise that in spite of the many and growing challenges of hanging and maintaining your own shingle, sole practices have risen over the last ten years. Go big or go small, it seems.

The thing is, I don’t really expect either trend to continue. Solos first: according to reports by both the B.C. and Ontario law societies, an outsized number of sole practitioners in Canada are in smaller centers or rural areas, which the Census Bureau tells us are rapidly emptying out. They’re also considerably older than average (55 (edit) 51 is the mean age), and by and large, they don’t have young proteges waiting in the wings to buy or inherit their practices.

Now, I don’t think we’re looking at the demise of the sole practitioner, by any means — in the more heavily urban future that awaits Canada, solos will retain the agility and flexibility that will come to define the post-modern law practitioner. As the Internet continues to redefine professional services and niches assume even more importance in successful practices, the solo life will in many ways become even more attractive. But I expect these two trends will balance out in the medium term, and with the number of solos figuring to decline over the next ten years, then starting to pick up again in future. Fifty years from now, in fact, I can see solos dominating the legal profession.

One of the reasons for that future dominance is that the biggest law firms are reaching a crisis point. Either you’re operating on a global scale, now and in the future, or you’re not. And if you’re global, you need tons of cash and an international presence that approaches ubiquity. At the very least, you need to be a serious player in New York and London. Right now, Fasken Martineau is the only Canadian firm I can think of that has any kind of noticeable footprint in both these cities, and a footprint is a long way from even a foothold.

I figure that two or three — four at the very most — Canadian firms will end up competing globally, and their total lawyer complement will never dip below 1,000 lawyers each. The rest of the pack will fall back — done in by an inability to compete for the very best talent here and elsewhere, the loss of the biggest clients to the global firms, and the vicious circles that these two phenomena will create. (And that’s assuming conflict-of-interest rules can somehow be finessed to allow firms to maintain any kind of large, multi-jurisdictional presence). Some of these firms will disintegrate altogether, while some will shrink down to 1980s sizes. The lawyers these dying firms emit in the process, like stars going supernova before burning out, will form constellations of boutique practices or alliances of solos, nationwide and internationally.

Really, in 20 years’ time, the whole notion of “law firm sizes” may very well seem quaint. It won’t be all that relevant how big your law firm is — with the exception of the global giants, size really won’t matter, because the heavily niched, increasingly mobile and wired lawyers of the future won’t find enough advantages to a common office space and letterhead. It may not even take that long, if the changes we can already see rippling through the profession start multiplying faster than expected.

But either way, in the long run, expect to see a whole lot of sole practitioners, a great number of smallish boutiques, a few regional alliances, and a very small number of behemoths. In the future, your law firm can be huge and powerful, or tiny and quick — there’ll be very little room for anything else in between.