This article in The Recorder is mostly about the free-fall that the real estate legal marketplace in California is experiencing. But my attention was caught by Mark Greene, a real estate lawyer there who diversified his practice at the height of the boom and has seen his foresight pay off:

Wise to the cyclical nature of the real estate practice, Greene began to take on other — and, for him, more nontraditional — projects about two years ago. While the bulk of his practice today continues to center around large institutional clients, work for high-net-worth individuals is making the difference between being busy and not busy, making up about a third of his practice now.

A lot of lawyers spend their time looking for the next big thing — the practice area that’s been quietly building up and is poised to become red-hot. But they don’t spend nearly as much time looking for the next small thing — the practice area that’s about to go stone-cold because of changes in economic, technological, cultural or political circumstances. If that next small thing is part of your book of business, you need to know about it. And if it constitutes a major portion of your work, you have a serious, fundamental issue on your hands.

Greene and others like him were smart enough to recognize the bubbly froth developing in the real estate boom and act on it. It’s easy to say, with hindsight, that any lawyer could have forecast the end of feverish times in their practice area, but not many actually do (Cadwalader, for instance). And even if you’re a short-selling economy-watcher with a keen eye for coming disaster, you can’t always tell which way the impact cracks will branch out from a major economic change.

Take high oil prices, which seem to be here for the foreseeable future. Susan Cartier Liebel reports a forecast that in the next four years alone, ten million cars will come off American streets and highways. Sure, if you’re in-house at Chrysler, you can read the writing on the wall. But what if you do corporate work for healthy carmakers whose inventories start backing up because people are holding onto their old vehicles longer? What if you represent suburbs whose tax bases might start shrinking as people can no longer afford to commute that far? What if you specialize in auto accidents and people start driving less?

The challenge for lawyers to spot the next small thing is that they can’t count on their clients in these areas to help them look ahead — as often as not, they don’t see the big change coming either. With Western economies so volatile, in the face of globalization and technology, there aren’t many sure things anymore, and the landscape upon which your practice is built could change awfully quickly.

What can you do? One thing might be to develop an appreciation for the Law of Unintended Consequences, and cultivate a habit of thinking about the indirect results of events in your industry or community. Lawyers are linear thinkers by nature and by calling, but once they start practising non-linear thinking, they’re actually very good at it.

And to the extent you can do so within the bounds of competence, diversify your practice, just as you’d diversify your investment portfolio. Even — especially — when times are good, look for related but separate business lines or client bases into which you can move and eventually come to specialize. As Q said to James Bond in Desmond Llewellyn’s last appearance: “Always leave an escape route.”