BigLaw lawyers with any interest in potentially moving to a boutique law firm, should be aware of some recent reporting and discussion about developments in the legal marketplace, in particular those related to the state of BigLaw.
Much has been written on the subject of why lawyers are moving from BigLaw to boutiques and what’s required to make those moves successful. This blogpost is in fact a follow up to a blogpost I’d written recently about whether BigLaw lawyers should leave for boutiques.
I thought here I’d outline the current state of BigLaw with an aim to helping BigLaw lawyers understand what the macro-situation is for BigLaw and whether they ought to be seriously considering a move to a boutique. And the answer to that question — is yes. Below is an overview of some of the most recent analysis and commentary by some of the top observers of BigLaw which led me to come to that conclusion.
The state of BigLaw in 2014
BigLaw is not adapting
BloombergBusinessweek reported in an article last week that “in 2014, large law firms will continue to face challenges in the new year, [citing] legal search consultants at Major, Lindsey & Africa”, who stated: “’Our message in our last advisory was clear: BigLaw, it is time to adapt or die. We think this same message is equally true as we head into 2014. Only more so.’”
“The key to a firm’s long-term success” [according to Major, Lindsey & Africa] “will depend on strong and flexible leaders whose strategy reflects the realities of the legal market and a will to change the status quo. Leaders must “query whether the traditional leadership models and strategies have run their course, or, at the very least, whether firm chairs and managing partners should continue to practice while attempting to oversee such a vast business enterprise.”
BigLaw is losing market share while utilizing failed management strategies
Ron Friedmann, consultant to the legal services sector recently wrote on Prism Legal Blog (citing a recent study by The Center for the Study of the Legal Profession at Georgetown Law and Thomson Reuters Peer Monitor): “The dominant law firm strategy today is trying to grow by merger or lateral hiring. The report questions whether growth is the right strategy.” Friedmann cites intense competition in the legal services sector as having “resulted in clients moving work from (A) law firms to in-house lawyers and (B) pedigreed” firms (AmLaw 20 and Magic Circle) to “non-pedigreed” ones.”
NewLaw is becoming an increasingly formidable challenger to BigLaw
Downward demand for legal services, intense price competition, disruptive technologies and the increasingly sophisticated challenge to BigLaw from what is known in the industry as NewLaw, coupled with the resistance by [large] law firms to adopt necessary innovations or changes necessary to compete effectively (as Eva Bruch outlined in her review of a recent book by Dr George Beaton entitled NewLaw New Rules) – will likely continue to be a drag on BigLaw’s ability to compete for market share
BigLaw either needs to change, or face elimination from the market
In a recent article in JD Supra about what legal sector consultants believe should be top priorities for law firms in 2014, “Jordan Furlong, principal at Edge International and senior consultant at Stem Legal [outlined his belief that]: “2014 will be the year that law firms either get serious about making themselves into competitive businesses, or start planning for their elimination from the market.”
Why BigLaw lawyers should be assessing alternative employment
What appears clear from the state of the legal market going into 2014, and in particular BigLaw is:
- BigLaw is facing intense competition from numerous angles, and that competition is going to intensify
- BigLaw is not responding quickly enough — or at all — to these challenges
- BigLaw management is unlikely to substantively change management practices that are not working effectively.
- Some of the most well-respected observers of BigLaw believe that BigLaw faces continued staff losses, lowered revenue and profitability, and even the possibility that some firms may not survive.
With all these headwinds, crosswinds and lack of apparent nimble and informed decision-making within BigLaw, I believe lawyers now practicing in BigLaw firms should carefully assess where they might find alternative employment in the future. And establishing or joining a boutique certainly ought to be among the top options to consider.