I am late to the game blogging on The New Republic article, The Last Days of Big Law.  To quote my friend Diane Hamlin:

Let’s not be like the lawyers. Let’s not attack the example.

I would caution us here to not dismiss the premise of the article, there is big change in the legal industry, by attacking the example.

Is Noam Scheiber‘s article perfect? No.

Does he make some great points that we should be discussing? Absolutely.

But why are we wasting time arguing over whether the glass is half-full or half-empty when there is a hole in the cup?

I worked at my first law firm right out of college. I was there when computers were first rolled out to the secretaries. Not to the attorneys.

Why? Because why would an attorney need a computer? They would dictate. The secretaries would type it up. Business as usual.

Except it wasn’t. A huge change was about to erupt in the business of how law firms operate that is continuing to take shape today.

The younger associates wanted computers. They didn’t want to dictate. It was a waste of time.

A battle ensued. The associates won, and slowly computers started to roll out to everyone.

And then something changed: Attorneys typed up and edited their own memos and pleadings. Secretaries started to turn into legal assistants. Paralegals took on different responsibilities. We didn’t need as many associates to do that research.

But the compensation systems based on that leveraged pyramid of associate to partner didn’t change.

Over time we have seen with the advent of the Internet and Google that general counsel research lawyers and law firms differently. They no longer were dependent on Martindale Hubble and referrals. How they researched and made purchasing decisions was changing. Law firms needed to adapt. Again.

Oh, and that recession, with all those law firm layoffs. And the new technology is not slowing down, but seems to be quickening in its pace and early adoption.

It’s been 25 years since I joined that first firm. It no longer exists, like so many others. It was absorbed into a larger firm many years ago. Why? I’m sure there were many reasons.

When I read The New Republic article I immediately started to look at the similarities (law firms facing a new world) and not the differences (I’m at a mid-sized boutique, not an AmLaw 200 corporate shop. We’re not Mayer Brown).

Think about it. What do we all have in common?

  • A new economy.
  • New and better technology.
  • A change in the business model for both client and law firm.
  • The recession is officially over.

What are our challenges?

  • The billable hour.
  • Staying relevant.
  • How are associates going to be trained when no one wants to pay them?
  • 2000 billable hours in a year is NOT attainable as an average.

These are just a few examples, but isn’t it high time we REALLY start having the difficult conversations?

  • It’s time to check your business model. Is it working? Because if not, it won’t get better now that the recession is over.
  • All that work client brought in-house. It’s going to stay there.
  • Outsourcing. Not going away. In fact, will get worse with the new technology out there.
  • Client holding outside counsel accountable to the value derived from their billable hours? Still there.
  • Why are law schools continuing to churn out too many new lawyers who will never, ever get a job in legal?

If you were waiting for the recession to end so you could go back to business as usual, I hate to break the news to you: Now is the new business as usual.

Technology will continue to eat away at the hours attorneys bill. Clients are still under pressure to keep their legal spend down and managing outside counsel costs.

I say that those law firms that are successful and rise in their ascension in the Big Law ranks will do so by doing it differently.

And everyone else who does it differently will succeed as well. You don’t have to work at Big Law to make a great salary and a competitive PPP.

My friend and legal marketing peer Patrick Fuller writes an annual analysis of the AmLaw 200, and he had a great point on a trend that he is seeing:

The most telling trend, however, is the revenue share between the top 50 and bottom 150.  Since 2003, when the AmLaw top 50 firms garnered 52% of the total AmLaw 200 collective revenue, the AmLaw top 50 has increased their share of total revenue to nearly 59% in 2013.  While on the surface this may not seem like a huge over the past decade, what has happened is that the market share gap between the AmLaw top 25% (AmLaw top 50) and bottom 75% (bottom 150) has quadrupled, moving from a 4% gap in 2003 to 16% in 2013.

More than likely, this trend will not be ending anytime soon.  Over the past decade, the average firm size has increased at twice the pace for the AmLaw top 50 firms (40% to 19.6%) compared to the bottom 150.  Mergers and high-value lateral moves will continue bringing immediate revenue into the AmLaw top 50 firms.

The bottom line is that a majority of the firms (the AmLaw bottom 150) are getting a decreasing share of an increasing market, and have been for the last 10 years. Can many of the AmLaw bottom 150 continue to survive?  In a traditional business environment, the answer is no.  In the business of law, the answer is not so simple.

And I want to leave this blog post there, although he goes on in that last paragraph.

The answers are not simple.

But if we refuse to have the conversation, focusing instead on attacking the example, then we, the legal marketing and business development strategic thought leaders, are not providing the service our firms desperately need.

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