Normally I don’t just dash off a blog post and list articles. The news today, however, calls some quick links and comments.
The New York Times Dealbook reported this morning Big Law Firm to Cut Lawyers and Some Partner Pay. Weil Gotshal is set to cut 60 associates, 110 staff, and the compensation of 30 partners.
Had I not read that breaking news, I might have thought BigLaw faced a brighter future: today the Wall Street Journal reports that Law Firms Regain Some Pricing Power while The National Law Journal reports Large Firms in a Hiring Mood Again.
My view is that the New Normal for BigLaw is not as bad as many commentators suggest but not nearly as good as many BigLaw partners think. Most now agree we have transitioned from a growth legal market from 2000 to 2007 to a shrinking / flat / low-growth market now. Prospering in a flat market means competitive differentiation and – gasp – changing.
To understand the types of changes we need here in the US, look at the news from the UK. Today The Lawyer published a series of articles on how BigLaw is changing in the UK:
- When change is inevitable…
- Addleshaws’ process-mapping divides opinion
- Barclays calls lawyers in for cost-cutting summit
- The art of the possible (a re-think of BigLaw IT by By Nathan Hayes, IT director, and Mark Webber, partner and head of technology, Osborne Clarke.)
Also consider the types of changes outlined in the ACC blog post from last week, More Corporate Law Departments Turn to Legal Support Services to Reduce Excessive Fees, which lists all the winners of the ACC Value Challenge. The lesson here is that clients have plenty of alternatives to large law firms. Not all general counsels are taking full advantage of those alternatives – at least not yet. So this report may be much more a leading than lagging indicator.
This is not a good day for Weil Gotshal. The Above the Law post on Weil concludes with “”Alas, we predict more layoff news to come; as early as this afternoon, in fact.” So it may not be a good day for BigLaw more generally. The good news is that few US-based firms have taken steps to differentiate their offerings and to embrace the client demand for value. So BigLaw still has plenty of opportunities to do well. For many firms, however, this will mean working in new ways.
Update (430pm EDT) Jones Day lays off 65 IT staff; CIO Michael Fick to depart. All floaters in NY office laid off says ATL. Above the Law and Cleveland Plain Dealer. Above the Law separately reports that 17 partners are leaving Patton Boggs and notes “We expect there’s a lot going on at Patton Boggs that we haven’t yet covered.”.