Law firms requesting credit in the New Year are finding that the conditions for borrowing have become onerous.   An article in the ABA Journal posted yesterday says that banks have doubled interest rates for firms and imposed more regulations.  Banks are exceedingly cautious about lending because of dissolved law firms.  The law firms originally began to decrease pay to partners in order to lessen their original debt that was in danger of rising due to lower revenue income.  Partner defections have ultimately led firm dissolution in many cases according to a lawyer for Citi.

It seems to be a circle situation for the law firms, if they have to pay higher interest rates on credit, they still won't be able to pay their employees adequately.  And if they do, they will likely have to decrease the amount of employees.