For the AmLaw second hundred, I think the story is short and sweet: More and more clients are acting on the sane business judgment that sometimes “good enough is good enough,” and the $450/hour person outside a Top Ten metro area is every bit as competent as the $700/hour person in Big UrbanPlex. Guess which tranche of these three that benefits?

For the AmLaw first hundred, I think the PeerMonitor figures—being averages by definition—mask what last week’s release of the 2013 AmLaw 100 itself shined a spotlight upon: Namely, the AmLaw 100 firms are increasingly made up of the Top 20 (in terms of performance) and everybody else. In other words, when it comes to the AmLaw 100, averages don’t just mislead, they may be lying.

The batting average of a team comprised of Babe Ruth, Ted Williams, Hank Aaron, and six discards from the minor leagues is not .300 in any sense that matters. (Extra credit bonus prediction: Next year the AmLaw will begin to report its results by segment and not by 1—100 as a unitary category. If they don’t do it, I’ll reinterpret the numbers to do it for them.)

For the mid-size firms, it does not mean they are poxed, any more than it means AmLaw second hundred firms can dial in the autopilot. It shows relative headwinds and tailwinds, sunshine and clouds. As I said, the individual experience of any particular firm will vastly outweigh the importance of sectoral averages.

But.

Mid-size firms have been under stress for at least a decade, and I believe longer. Twenty years ago (say) it was simple to visit any metropolitan area in the US of respectable size—from the Bay Area to Seattle, San Diego to Arizona to Colorado, Texas, Chicago, Atlanta, Boston, Philadelphia, Florida, Minneapolis, St. Louis, Detroit, Cleveland, Pittsburgh, Washington, and so on and on, and find mid-size firms with genuinely talented lawyers in relative abundance.

As a managing partner of a global firm at the Canada conference pointedly observed in connection with the PeerMonitor presentation, that is no longer remotely so.

Those firms have by and large ceased to exist, through merger and combination from “above,” as it were, through lateral seepage of talent, and finally through the process of cell mitosis, if you will, splintering into smaller boutiques made up of groups of the original partnership—still talented but no longer “mid-size”).

I won’t remark here on the dynamics of combination with larger firms—gallons of ink (megabytes of pixels) have been spilled on that topic elsewhere—but the splintering into boutiques is worth a word.

Econ 101 teaches that, all else being equal, the less capital it takes to enter an industry, the easier it will be for newcomers to set up new entities and begin to compete. A corollary is that the smaller the “minimum economic scale” required for an entity to compete effectively in XYZ industry, the more new entrants there will be.

Law firms score astronomically high on both measures: They require virtually no capital—zero liquid assets on hand, in fact, if you have even one respectable credit card in your wallet—and even solo practitioners can (I’m not saying will, I’m saying can) earn a living.