Now, in my travels I have met an enormous number of managing partners, executive committee members, and rank and file partners, in BigLaw, small law, and everything inbetween. My own view is that they’re overwhelmingly smart (or super-smart), analytic, and risk-diagnosing bloodhounds. How could it possibly be that this large cohort of people don’t see what’s going on in the market?

Actually, I believe they do.  Even the supposed troglodytes at Kodak weren’t actually naive at all; they knew digital photography would eat their film lunch, but they couldn’t stop doing what was so profitable.  So I subscribe to the “they prefer not to” hypothesis. After all, it has a lot going for it:

• Those in charge of law firms (and certainly BigLaw, with a small minority of exceptions) are old enough that they may have left the building before change becomes imperative.
• By and large, most firms are not in much pain, certainly not enough to motivate a serious and sustained change to the status quo. (Readers with a familiarity with the psychology of addiction and how to break it may want to chime in with thoughts on “hitting bottom.”)
• Speaking of the status quo, lawyers—more than any other category of professionals on the planet—elevate the presumptive superiority of the status quo over and above any and all other possible statuses. While I have never comprehended this, much less endorsed it, I’m not in the business of denying reality.
• Never underestimate the short-termism of lawyers—for starters, their compensation is 100% in current earned income paid from their firm’s results this fiscal year and this fiscal year alone (with exceptions too immaterial to compromise this as an observation about the industry).
• Compounding the short-term orientation, many lawyers—in our era of hyper-liquid lateral markets—have no allegiance to their firm beyond the last day of the current fiscal year. Why suffer financial or psychological dislocation for even a few calendar quarters if the payoff will only accrue to some uncertain future time?

And this brings us back to our Big Three. Even the stiff-upper-lip Citi addresses it obliquely, in the opening quote to their report:

“It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is best able to adapt and adjust to the changing environment in which it finds itself.”

— Leon C. Megginson, Professor of Management and Marketing at Louisiana State University at Baton Rouge (in a 1963 speech on Charles Darwin’s ‘The Origin of Species’)

Both Altman-Weil and Georgetown take it on far more directly. Altman-Weil presents data showing centralized leadership correlates with superior financial performance. I assume I don’t have to connect the dots for you. Georgetown more bluntly challenges the partnership model of organization itself as potentially not “fit for purpose” any more:

Law firm partners must understand that the exercise of their ‘ownership’ rights can no longer entitle them to exercise a veto over every key management decision or to approve in advance changes in firm operating systems or models. Other professional service firms (including accounting and consulting) have made adjustments to their governance structures to make them more responsive to the demands of their market environments. Law firms need to do the same. This is important not only to enhance such responsiveness, but also to enhance the likelihood that decisions will be made with an eye on the long-term viability of the firm rather than the short-term interests of individual partners.

Could it be, in other words, that we have outgrown our historic roots as partnerships? Is the perennial debate between whether we’re a “profession” or a “business” (we are incontrovertibly both) actually pointing at something more profound and could it be more than a tiresome and tendentious, perennial rhetorical tic to pose this question?

We are not remotely done with this topic.