"Ultimately, lawyering is becoming more of a business than a profession."Well, hit me with a 2x4. Ever wonder why my blog has Profession in quotation marks? Funny, this article is dated May 2011; it's about 30 years late.
There is nothing new, here, to anyone who follows the legal industry even casually. The main import is that it appeared in a widely-read and respected publication. The only reason I'm blogging about it is I started a draft a while ago and didn't want to let it languish. Which is a piss poor reason. Whatever.
The article leads off with Howrey LLP's dissolution. The firm's circling the drain led to much breathless (and witless) writing on ATL. The ultimate cause of death was partners defecting because profits weren't at their accustomed >$1MM/partner/yr. Pundits, including The Economist, can wax all they want on structural changes in the industry, but the firm was killed by old-fashioned greed and mismanagement, same as from time immemorial. Unlike a typical business failure, Howrey was never insolvent, and its investors (equity partners) landed on their feet elsewhere, each presumably with his or her book of business intact.
There's a much better article in the Washington Post that traces the firm's rise and fall. It also discusses structural changes, but the main one is the demise of the general partnership structure that bound partners to the firm and limited risk taking. Seems quaint, but around the time I was in school, associates who had been offered a partnership were advised to check the firm's financial condition, especially unfunded pension obligations. Also see Finley, Crumble.
I note Howrey set up "a back office in Pune, India, to provide low-cost legal research." Snort.
The interesting aspect of the Economist article is its predictions on what firms are likely to thrive in today's economy.
- Elite New York-based firms such as Sullivan & Cromwell that restrict their locations to business centers
- Smaller, highly-specialized firms such as Wachtell that can command a price premium, or, as one of our salesdroids used to call it, a "sustainable competitive advantage"
- Certain global firms such as Baker & McKenzie that have a viable business model and management that can execute it (my emphasis)
My favorite part of the Economist article was the discussion on protectionism. Other countries severely or completely prohibit foreigners from practicing local law. Meanwhile, over at the ABA, they're not only exporting legal work as fast as they can — until it blows up in their faces — but also subjecting the locals to CLE, mandatory pro bono, bar dues, etc.
How I wish this were the real profession I thought I was entering.