Thanks for the article Mark. Might also be worth reading some of...

Thanks for the article Mark. Might also be worth reading some of the citations (will have a look after).

I guess the question if a recession hypothetically hit Australia (which sooner or later it will)  is:
What impact that will have on Shine?

From the article:
"An example of this is that it has been well documented in the press that there is often an increase in personal injury litigation during periods of an economic downturn.[3]"

Summarizing I imagine the impacts of Australian recession are:
+ PI (positive impact)
+ Class actions (positive impact)
+ Insolvency law (positive impact)
+ Workplace Relations law (positive impact?)
- Family law (negative impact)

It would seem that Shine is well positioned for a recession.

I suppose the reverse of this argument is... how is a law firm impacted during a boom period? and should we expect this to be the reverse of the above? i.e. rising divorce rates and lower rates of PI claims, insolvency, and CAs.

Given Shine's current strategy of diversification, it might make sense for them to use a recession as an opportunity to buy up firms in  areas of law that traditionally do badly in recession (once the squeeze has hit and they are struggling and therefore eager to sell). So that when the recession eventually ends Shine can benefit from a business positioned to take advantage of the Boom cycle.


Also the talk in the above article around automation and outsourcing.... this is a long term trend that has little to do with the boom and bust cycle. It's very negative from the perspective of Australian legal grads and clerical staff but very positive from the perspective of shareholders of Shine. It increases economies of scale within the legal industry and puts pressure on smaller firms to sell. We can anticipate with certainty that firms like Shine will become more  economically efficient in the long term and once this kicks in will have a competitive advantage over smaller firms.

Additionally as the last man standing among publicly listed laws firms Shine will have a funding advantage over its (non publicly listed) competitors - though this advantage is dependent on Shine's share price being above it's intrinsic value (which currently I believe it not to be).