Copious have been the articles about BigLaw partners decamping to start their own firms, but when the story migrates from the legal press (among which I count law.com (comprising The American Lawyer, the National Law Journal, etc.) The Lawyer, LegalWeek, the occasional non-salacious news from AboveTheLaw, and a few other sources) to Slate, of all places, attention must be paid.
Under the headline Leaving Big Law Behind, we read that:
Lawyers often enter the profession because it’s a safe bet, and they’re paid handsomely to be risk-averse. But increasingly, Big Law partners like Marc Zwillinger and Christian Genetski–who started their Internet-focused firm in March and have since doubled the client roster–reach the pinnacle of success only to leave it behind.
After a career of being coddled–and drained–by esteemed institutions, these high-achieving lawyers, hardly naturals for entrepreneurship, find themselves choked, financially and otherwise, at the top of the heap. As the Big Law model–in which the nation’s largest law firms turn the top law students into billable-hour-crazed associates and, sometimes, partners–evolves to accommodate global entities, companies below the $100 million-revenue level that can’t or don’t want to pay Big Law rates are being squeezed. And this presents a window for partners, fed up with the Big Law model, to strike out on their own.
True enough, right? Well, yes, but there’s more to it than that, shall we say.
There have been many high-profile stories of lawyers leaving blue chip firms, notably Peter Chaffetz, global head of litigation for Clifford Chance, forming Chaffetz Lindsey in 2009, so this doesn’t exactly qualify as new news. (Disclosure: I knew Peter when he was at Clifford Chance, although we haven’t spoken recently.) Indeed, that firm’s website succinctly states the case for abandoning BigLaw:
Conflicts
Conflicts have always been a problem at large firms. That problem became dramatically worse following the economic downturn, as so many of the resulting disputes involved firm clients on both sides. We saw a need for a top-quality firm that did not have those conflicts.Costs
Even before the downturn, the large firm cost and fee structures made it difficult for clients to hire us on small to medium sized cases. Today, our clients face relentless pressure to reduce legal expense, even on the largest cases. With low costs and no excess overhead, our new firm provides the value clients require.In short, the Chaffetz Lindsey team delivers the same quality legal work as always, but with the freedom to serve a broader range of clients and the economics to help those clients with a broader range of their needs.
The Slate piece also cites, as motivations to decamp from BigLaw:
- The organizational overhead “tax” imposed on everyone (not just partners, although they’re the only ones Slate mentions); big organizations require care and feeding. This is inelucatable.
- Oddly, they also cite boutiques’ relatively greater freedom to deviate from hourly billing, citing the example of an Sonnenschein spinoff that offers monthly “all you can eat” retainers covering everything except litigation. “Oddly,” I say, because there’s nothing remotely unique to the boutique model about this pricing structure.
- Another strange argument that makes an appearance is that “partners are expected to cross-sell” in BigLaw. This is criticized on the grounds that a client might be steered towards someone who “isn’t necessarily best suited for the job,” or, conversely, that the lawyers receiving the cross-sold client “may be so busy that they don’t give the inherited client the attention he or she deserves.” If you can explain to me how either of these scenarios serves the interests of anyone at the hypothetical BigLaw firm being critiqued, I welcome your insights.
Don’t misunderstand me: Could it happen? Yes, of course. Could cross-selling be a sustainable strategy if these scenarios were typical, and not exceptional? You, and clients, be the judge.
But I don’t want to dwell on deconstruction of any specific article, or firm.
For one thing, I have also had conversations with people at many of the BigLaw firms from whence folks have loudly decamped, who have said the alumni were about to be pushed. Or that conflicts were a figment of their imagination. Or that their new rates are not materially different from their old rates.
The last thing I have any interest in is refereeing those debates. Just to note that there are always two sides to every story.
Instead, I want to suggest that’s what’s going on here, while it makes for great content for the celebrity-centric aspects of coverage of our industry (oh, you hadn’t noticed that there is such coverage?), is the natural evolution of an industry under economic stress.
A year or two ago, I began to receive, periodically, emails from various partners and former partners in BigLaw, all of them requesting anonymity, which I scrupulously honor, who had either left to set up their own boutiques, had just seen a colleague do it, or were thinking about it. I can assure you that these emails were far “hotter,” emotionally, than is typical for my inbox; these folks were passionate about whether this is what they ought to be doing, or, if they’d already done it, about why BigLaw was structurally broken and attending its wake would only be a matter of time.
I think it’s fair to say that one way to encapsulate the feelings most of these people were expressing was the heartfelt, “This isn’t the firm I joined!”
And you know what? They were right.
I won’t rehearse for you the staggering statistics on the growth of the AmLaw 50, the AmLaw 100, the AmLaw 200, or the NLJ 250, over the past 20 years, but we’ve been on one heck of a sleigh ride, friends. Those aren’t just statistics; those are living, breathing organizations. Firms have changed, some unrecognizably so.
What we’re witnessing now, I believe, accelerated but not caused by the Great Reset, is people sorting themselves out into the firms they belong to be in. BigLaw is not for everyone. But its global reach, its wide and deep expertise across practices, its ability to handle the Big Deal at the drop of a hat, all serve clients’ needs in ways for which there is no substitute. Boutiques, likewise, will always be with us: From Cartier to Ferrari to single malt scotches, every industry worth its salt welcomes, and is improved by the competition from, boutiques. But query whether they will ever be the main event.
What we’re seeing, I suggest, is greater diversity of business models than we had in, say, 2006. This can only be healthy. We’ll even give Slate the last word:
Ultimately, while Big Law is definitely not dead, the increasingly diverse models ensure an end to the days when clocking time as a Big Law partner is the best measure of success in the legal profession.
In other words, don’t read Chaffetz Lindsey as a precursor of the demise of Clifford Chance. No more than you should read the success of Boies Schiller as implying fissures at Cravath (David Boies’ alma mater).
What all this “means” is far simpler: May the games continue.
