[Ed. Note: This post was originally printed on our sister blog, Guerilla Law Firm Blog where we post stories about the practice of law and the future of the legal profession.]
When my mother was still alive and living in a skilled care facility I would try to visit often. Because we were 2000 miles apart, I could only manage monthly visits. Each time I would arrive, my mother would tell me who died in the intervening weeks or suffered some major medical setback such as a stroke. Reading Law360 each day is much the same thing.
Every day the headlines trumpet the demise of another well respected “white shoe” firm or detail the gruesome hemorrhaging of lawyers and staff. Today’s Law360 headlines note the termination of 170 people at Weil, Gotshal & Manges (60 of them lawyers) and the departure of 17 partners at Patton Boggs. (The latter coming on the heels of the recent cutting of 65 lawyers and staff from that firm.)
What’s going on?
In the words of Weil, Gotshal executive partner Barry Wolf, “I think we’ve come around to the view that this is the ‘new normal.'” We are glad that at least some folks in the BigLaw world world finally realize that the Titanic has struck an iceberg and is going down. (Yesterday I was at one of the premier BigLaw firms. From their ivory tower overlooking the Capitol one would never know that things aren’t going well – the ability to put on a game face at these monolithic firms is amazing.)
The bloodshed isn’t limited to well respected firms closing their doors or kicking lawyers and staff to the curb. A front page story in today’s Wall Street Journal revealed that the pain felt at Weil, Gotshal runs much deeper. According to the WSJ, the firm’s executive partner also announced that there would be “meaningful compensation adjustments” for certain partners of the firm. In some instances, partners would see their compensation cut by hundreds of thousands of dollars annually.
In our opinion, BigLaw simply became too big. The salary pressure in recent years has pushed firms into billing outrageous rates and often requires layers of junior lawyers to support these firms’ insatiable appetite for money. For decades, these big firms controlled the market and set rates. The recession, however, forced clients to push back. Clients are demanding more for less and a new breed of law firm is emerging to fill the void.
We have nothing against the caliber of lawyers at Weil, Gotshal or BigLaw in general. Many of them come to us looking for work. The problem with these big firms isn’t the lawyers as much as it is the business model. Building these huge vertically integrated firms is simply not the most efficient or cost effective way of delivering quality legal services. To be blunt, clients get the shaft. They pay over inflated rates and must often pay for three or four lawyers to research a problem that can be better addressed by a specialist at a boutique firm.
What is the future? We believe that virtual firms and specialized boutiques represent the future. Firms with low overheads and highly skilled and specialized professionals that can instantly come together to address client’s needs.
[Mahany & Ertl is a boutique tax and fraud litigation firm. We offer the best talent, wonderful service and alternative fees. For more information, contact managing partner Brian Mahany at (414) 704-6731 (direct).
Interested in working with us? We welcome BigLaw refugees that desire an environment where they can control their practices, work remotely and team with other very high quality lawyers. We concentrate in fraud, tax and corporate litigation. If you have what it takes, give us a call. ]
Post by Brian Mahany