You deem the following quote:
- Surprising, because your partners are totally game for whatever changes the rapidly evolving world is throwing at your firm;
- Utterly familiar—depressingly so;
- The ace you have up your sleeve as Managing Partner when it’s simpler to go with the flow.
Now here’s the quote, from the lead of Wells Fargo Survey Sees Revenue Growth Masking Troubling Trends (The American Lawyer, 29 Nov 2016):
Managing partners trying to make a case for painful cuts to their firms’ head counts are facing a dilemma: Things just aren’t bad enough right now.
Or, as my partner Janet Stanton likes to put it more bluntly, “Law Land is just not in enough pain to change.”
The data behind Wells Fargo’s survey of 130 firms (60 of them in the AmLaw 100) is straightforward enough:
- Rate increases are continuing to support revenue and profit growth—with rates up 3-4% and revenue overall +3.8% for the first nine months of 2016
- Despite stagnant underlying demand—in the 0 – +2% band
- And concomitant falling productivity of equity partners, down 1.6% on average and down 2.5% at “high profit” firms.
No, the pain wasn’t evenly distributed. Because “life is unfair,” it rarely is. AmLaw 50 firms were up 4.9% year on year in revenue, AmLaw 100 as a whole up 4.3%, but the Second Hundred down 1.2%.
Joe Mendola, a “senior director” at the Wells Fargo Private Bank Legal Specialty Group, drew a pointed moral from the numbers:
I think the next question firms need to look at is what is the future for the type of legal work I do and what is my plan? Is my plan to focus on my stronger performing practice disciplines? Is expansion from a regional to a national firm an answer? Is a combination an answer?
Careful readers will note that Mr. Mendola did not include “steady as she goes” as an attractive option.