The economic crises has finally hit home. People I know are talking about October and November as being months when the world stopped!  … and they couldn’t get off.  No one seems to know what is going to happen next.

I met yesterday with managing partners of several major law firms in my Managing Partners Roundtable.

They all agreed, they have never seen changes as we’re currently experiencing. The top most law firms are freezing compensation increases for next year; they are moving away from lock-step bonus systems and even reducing bonuses for this year; and they are hiring smaller “classes.”

The previous wisdom was that the economic impact for law firms would not be felt until the second half of 2009. But, these leading law firms are saying the impact is being felt now. This year’s revenue will be down by 15% to 25%.  There is no standard except this one:  Everyone is experiencing change; most are seeing economic results that are less than last year; and everyone is unsure about next year’s patterns.

And smaller law firms, and sole practitioners, though more nimble and better able to reduce expenses, are equally unsure about what to do to protect themselves without “cutting the meat” from their law firm and jeopardizing their future recovery.

In this crazy environment, panic attacks are easy to come by.  Richard M. Weber has some cogent counsel for these hard times:

“While I don’t give investment advice, I’ll share with you my own reaction to the current crisis. After my “Sell, I tell you, Sell” panic subsides, I look at all my resources for retirement and begin to settle down. My house is nowhere near “paid off,” but the monthly mortgage payment is within my budget and its intrinsic value is still more than the mortgage principal. I have sufficient life, health, and disability insurance to protect our family from the economic damage those kinds of disasters can create. I have a year’s living expenses in cash (and yes, I’ve checked to make sure that FDIC insurance covers those accounts). More important than all of these resources, however, I realize that I have marketable skills, a number of clients who value those skills and actually pay me, and no particular desire to retire next week to “go fishing.” So my investment account statements remain unopened in a desk drawer, I only glance at the bad news at the top of the Business Section of my daily newspaper, and I get back to the task at hand: taking pride in my work and applying myself to it as diligently as I know how.”

Panic attacks come from the “fear of fear.”  To counteract this fear, look at observable behavior. Look at the facts. Check your reality. What is happening now; review your financial resources. Project financial requirements for the next twelve months. Look at your health. As they say in the airline business, put your oxygen mask on first, before seeking to help your neighbor. You can work through anything so long as you retain good health.  Talk to members of your support system, family and others who have the expertise to provide advice to help you.

And, take a deep breath. Things could be worse, we could be living in a war zone. History tells us that life consists of cycles … though we are in a nasty one now, things will get better.