Full disclosure: I introduced this topic, with the advice and consent of my hosts, and it generated more instinctive assent than I ever would have imagined. Part of me anticipated, “OK, one less law firm to worry about,” but there was almost no such reaction.

I based my belief that clients shared some responsibility on their conspiring in, if not actively encouraging:

  • the star system
  • the associated toxic notion that you hire the lawyer, not the firm
  • and their associated demonstrable willingness to chase their chosen stars from firm to firm as need be.

To some extent, this is self-evident and entirely unremarkable. We’ve known for years that some firms (the Magic Circle, the NY elite) tend to have very sticky institutional clients loyal to the firm above any individual. But a change, driven I believe by clients and not by us, began going all the way back to the deal-driven 80’s when i-bankers began to emerge as stars in their own right and suddenly (for example) Chase Manhattan wasn’t quite as immortally wed to Milbank as it had been, nor Citi to Shearman & Sterling.

The personal dynamic of this was simple: Lawyers at these well-bred white-shoe firms were even more intrinsically conservative than your average risk-averse adult who had spent his entire life making the safe and sound choices and avoiding even a whiff of iconoclasm (wearing a bow tie once a month would count as radically nonconformist), and they appeared, to the hungry and aggressive i-bankers, “not commercial.”

Since the bankers’ pay depended on getting their deals done, and done fast, they would go to their superiors and ask for the freedom to select a “more commercial” lawyer at, inevitably, a different firm. And so it began.

Today the dynamic of latent firm/client hostility plays out differently, yet I heard a hair-raising story of the senior partners of three (unidentified) Magic Circle firms heatedly commiserating with each other about what a nasty and brutish client such-and-such an (unidentified) global mega-bank was, nickel and diming them on everything conceivable and inconceivable, and when our intrepid observer reported the gist of this exchange to the GC of MegaBank, the reaction was, “Great! We’re doing what we intended.”

So far is this from a marriage it approaches domestic violence.

“Can’t put the genie back in the bottle,” I hear?

Actually, I think we have a better chance of cabiniing in these kinds of dysfunctional behavior than we ever would have had a prayer of during the boom. If you wish to call that a silver lining, be my guest.

Here’s what I mean: If we are to behave seriously as mature and collaborating adults with a shared purpose in mind to (1) temper the potential destructiveness of mutual market power; (2) think hard and creatively about truly new and superior ways of doing things; and (3) use the shocking implosion of Dewey as a wakeup call about client behavior which acts as an enabler of such tragedies, then now, folks, is the time.

Because universal was assent to the proposiiton that we’re not going back to the 80’s, the 90’s, or 2007 for that matter.

We need to find a sane, productive, and yes mutually profitable, modus vivendi. The difference between the boom years and now is that then it didn’t matter terribly. Now it does.


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