Recession Proofing – Update

In late February 2018 I released a column titled "Recession Proofing – Why Now? Perhaps the Better Response is Why Not?" It struck a nerve with the legal industry. So much so, I thought it worth an update on the likelihood of the recession and the single best strategy for law firms to embrace in order to not only survive but actually prosper in a recession.

An inverted yield curve, which has correctly predicted the last seven recessions going back to the late 1960's, occurs when short-term interest rates yield more than longer-term rates¹. That's when yields on one-month, six-month, or one-year Treasury bills are higher than yields on 10-year or 30-year Treasury bonds. During healthy economic growth, the yield on a 30-year bond will be three points higher than a three-month bill.