When I started at my current job 3 years ago I was the only person wearing a tie, let alone a suit. Bets were taken on how long my suit/tie would last. Now, nearly half the office males wear a tie, and I have seen the odd blazer/sports jacket too !
Law firms in NYC have been largely business casual for years now. I've noticed, though, that as the economy got worse, attire got incrementally less casual. I don't think we'll ever see a return to full-time business attire (no one I know wants to wear a tie every day), but people seem to be breaking out the suits more often than they did a few years ago.