A senior editor has published a commentary on the waning future of the major law firm in the July 21, 2013, edition of The New Republic, based on a study by Chicago-based Mayer Brown.
The editor, Noam Scheiber, observes, “ ‘Stable’ is not the way anyone would describe a legal career today. In the past decade, twelve major firms with more than 1,000 partners between them have collapsed entirely. The surviving lawyers live in fear of suffering a similar fate. Partners routinely make pitches behind the backs of colleagues with ties to a client. They hoard work for themselves even when it requires the expertise of a fellow partner. They seize credit for business that younger colleagues bring in.” Why is this happening? Scheiber concludes that, “Part of the reason the law-firm ecosystem has changed so dramatically in a single generation is greed: The most profitable partners steadily discarded their underachieving colleagues because they didn’t want to share the spoils. And part of the reason is the brutal recession that began in 2007, prompting corporations to slash every conceivable expense, law firms included. But the biggest problem is that there are simply many, many more high-priced lawyers today than there is high-priced legal work.”
He quotes the managing partner at New York- based Weil Gotchal, Barry Wolf, explaining recent large lawyer and staff lawyer layoffs, as stating, “We believe that this is not just a cycle, but that the supply-demand balance is out of whack across the country. If we thought this was a cycle and our business was going to pick up meaningfully next year, we would not be doing this.”
Scheiber feels the overwhelming majority of the largest firms still operate according to a business model that assumes, at least implicitly, that clients will insist upon the best legal talent instead of the best bargain for legal talent, but that assumption has become rickety in the present context of cost cutting and the drive for efficiencies in all phases of business operations.
This is a sobering article. It posits that corporate America continues to be increasingly stingy in its legal spending. If valid, our silk stocking friends may be largely relegated to competently managing a decline — charging clients the same for more work, or less for the same work; while simultaneously reducing staff and other elements of overhead. This has consequences for the entire legal industry, and mediators are no exception.