The legal market will never return to the crazy days of the dotcom boom in the late 1990s, but most lawyers will be grateful for that. Those were the days when business plans were written on the backs of envelopes and millions of pounds of development funds were raised on the promise of business models that could not possibly work.
That has changed. The reason many dotcoms failed was that the infrastucture to support them, ie broadband, was not yet available. Today more than 50 per cent of UK homes have high-bandwidth connections allowing the rapid download of images, music and video.
The success of Apple's iTunes and its iPod are among the most visible examples of this turnaround. But the growth in technology-related issues on the capital markets has also suggested a return to confidence in the sector. There were 58 technology, media and telecoms (TMT) deals on the Alternative Investment Market (AIM) last year, while the main list saw a boom in online gaming flotations. These deals, which included 888.com and PartyGaming, were a recognition that revenues really could be earned by using the internet.
But the daddy of all the floats was that of Google, a pure internet play (as they used to say in 1999), the listing of which last year stunned investors, not just because it raised $1.67bn (950m) at $85 (48) a share, but by seeing that price still climbing post-initial public offering. According to John Battelle, the co-founding editor of magazine Wired and author of a new book on dotcoms (The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture), Google's aim of bringing all human knowledge together in one place is only 5 per cent complete. For an industry described by Batelle as the fastest-growing in media history, with a revenue estimated to reach $23bn (13.08bn) by 2010, there is almost unlimited scope for growth and change. Which means plenty of work for lawyers.
The realisation that clients are more likely to be profitable and able to pay their bills is further good news for TMT lawyers, especially those that got burnt the first time round. The leading commercial firms continue to devote significant resources to TMT-related matters, reflecting the importance they place on the major businesses in this sector. Freshfields Bruckhaus Deringer, for example, recently reorganised the jewel of its transactional practice, its corporate group, to include one team devoted to TMT.
The market may have changed, but it is by no means going away.