I read Paul Lippe’s blog post yesterday about the shock in the industry of the demise of Heller.

A law firm friend of mine told me many of his peers were “shocked” at the demise of Heller and its failure to find a merger partner. That put me in mind of the iconic scene in Casablanca, where Vichy police captain Louis Renault declares himself “shocked, shocked to find gambling going on [in Rick’s Casino]” while pocketing his winnings.

I too have industry friends who were shocked, I wasn’t. I was reading between the headlines about the layoffs, failed mergers, practice defections and partner movement at Heller.

Paul is predicting that Heller is the first in a trend of law firm dissolutions and lays out his reasons why. I could not agree more.

As firms decide how to deal with the current economy, the employment numbers are out and it ain’t looking pretty.

The law sector saw jobs shrink by 2,000 in September — the fifth consecutive month of losses. According to the U.S. Bureau of Labor Statistics, the legal workforce of 1,165,100 is down by 1.15% from one year ago, when the industry employed 1,178,600 people. The drop-off is even steeper since May 2007, when legal employment peaked at 1,180,700.

On a world-wide basis, 28 companies went public during the month, down 67% from September 2007 and down slightly from the 29 in August this year, according to data from Dealogic. Just $181 million was raised, a fraction of the $9.4 billion in the year-ago period, and down from the $1.3 billion in August.

In every corner of the world, the amount of money raised by IPOs could have represented just one small deal during flusher times. In Europe, the eight deals that were completed raised a total of $21 million, down from 19 that raised $784 million in September 2007. In North Asia, seven deals, including three from China, raised $30 million, compared with 20 that raised $3.7 billion a year ago.

There were no IPOs in the U.S. during September; last year, there were four that raised $990 million. It has been five years since the U.S. has seen a month without any companies going public; the last time that happened was in April 2003.

But rather than panic at the bad news, lawyers and law firms need to realign quickly and take advantage of the new opportunities. Those who do will avoid the path of Heller and will reap the benefits at the end of the day.

With the stock markets falling and credit markets tightening, law firms across the United States are dealing with panicky clients and scrambling to form new practice groups focused on the economic crisis.