The Brazilian economy is just under 2 trillion and its population is a little less than 200 million, making its GDP per capita around $10,000. (Attention Americans: it is more expensive here than you think.)
The US just crossed the 300 million population mark, our economy is just over 14 trillion and GDP per capita is around $45,000.
What are the respective economies going to look like in 5 years? In 10 years? How is that going to impact the demand for high end legal services? And how will those shifts in demand affect legal careers?
Play out a few scenarios in your mind.
US economic growth will be close to flat for the year. Most of US economic growth since 2001 occurred in the finance and real estate sectors of the economy. Both sectors shed a substantial amount of jobs and there are many qualified people to fill those jobs—if those jobs return. The political will to reform health care (lifting a burden off the shoulders of American employers) and stimulate the green economy seems lacking. It is hard to see where the economic growth will come from. For attorneys, there will likely be growth in tech, bankruptcy and possibly alternative energy practices, but probably not at levels that fully replace the jobs shed in real estate and finance practices, while still providing opportunities for all recent graduates.
In contrast, Brazil economic growth is projected to be around 5 percent for 2010 (2009 economic growth is expected to be 1 percent, quite respectable during a global contraction). Brazil is making substantial investments in infrastructure that will require at least some international suppliers and sophisticated financing arrangements, e.g. offshore oil wells and port upgrades. Demand for commodities may continue to help Brazilian exporters and consumer confidence is still at a decent level. It is easier to envision economic growth in Brazil.
If Brazil continues at its present pace, GDP could grow to $3 trillion in 7-8 years. That would be an increase of 50 percent, which I can imagine that relatively easily. Can you imagine US GDP increasing by 50 percent in 8 years? Will we all have 50 percent more stuff in 2017? I struggle to see that.
So if the Brazilian economy expands by 50 percent, do I think demand for high end legal services will grow by a corresponding amount?
No, I do not. I think the demand for high end legal services could grow by greater than 50 percent in Brazil in the next 7-8 years. As GDP per capita levels move away from $10,000 and toward $15,000, the kinds of projects businesses and people undertake change. Projects grow more complex, cosmopolitan and expensive. To better manage risk, financing structures will change. All of this requires greater attorney involvement. And hopefully, greater opportunities for young international attorneys.
Update: the first version of this post incorrectly stated that 2009 Brazil economic growth was projected to be around 5 percent. Economic growth in 2009 will be around 1 percent. Economic growth in 2010 is expected at 5 percent. The post has been corrected with the proper estimates.