The WSJ had a great article on recessions and law firms:
What really interests me is the assumptions these now-defunct law firms made. For example, why were they so confident that complex cases, like the Microsoft anti-trust matter, would continue indefinitely? Didn't they realize at some point, all those associates had to work on other cases to bill a sufficient number of hours?
It looks like the recession bankrupted law firms that were inefficient and that failed to diversify. What's the lesson? Whoever ignores the rule of "not putting all your eggs in one basket" does so at his own peril. In law and in stocks, it pays to diversify.