A rapid series of events over the course of the first week of February, 2014 – should give any lawyer in BigLaw pause:
On February 5, establishment Canadian BigLaw firm Heenan Blaikie, collapsed. On the same day in New York City, Lex Redux, an event dedicated to a growing universe of legal sector start-ups, was staged for the first time ever.
On February 7, British Telecom appointed NewLaw law firm Axiom Law to handle commercial and anti-trust matters. On the same day, again in New York City, an international audience focused on legal services sector innovation and entrepreneurship convened for the ReinventLaw conference.
Larry Bridgesmith described New York City (where LegalTech, Lex Redux and ReinventLaw all took place in that same time frame) as “testimony of the passing of the torch of legal services delivery to a new and irrepressible generation of “doers”.”
NewLaw’s rapid ascendance contrasts markedly with BigLaw struggles
The events in New York City the second week of February drew enormous coverageamong bloggers from throughout the world. The attention is testimony to the increasing excitement (and marketplace success) around NewLaw business models from Alternative Business Structures (ABS) to legal start-ups to NewLaw law firms like Axiom law.
As Dr. George Beaton of Beaton Capital in Melbourne (just back from attending ReinventLaw) outlined in an article: “Axiom Law is a 12-year old, 900 person firm that serves half the Fortune 100 from 10 offices across the world, including Hong Kong and Singapore. The BT–Axiom Law deal is for commercial contracts and anti-trust work in the UK, US and Asia.
This will drive Axiom’s 30% compound growth that put the legal services provider at rank 61 in AmLaw 100 tables in 2013. Heenan Blaikie, [in contrast] was a 500 attorney, 40 year-old firm with former prime ministers, premiers and judges as partners. Declining profits, tensions between offices, a divided leadership and the difficult environment for law firms resulted in the flight of a large number of partners; and the abrupt dissolution of the firm.”
BigLaw lawyers face an increasingly uncertain future
On February 7th, Aric Press of The Am Law Daily published an article outlining the continuing challenges the BigLaw business model faces, including statistics that indicate a two-tier partnership model in the AmLaw 200 is in ascendance. Put simply, more and more BigLaw “partners” are merely employees.
“Fully 40 percent are now nonequity” according to Press. And “85 percent of firms expecting to demote and/or dispose of at least one partner this year”. These non-equity partners are taking home a handsome paycheck yes. But now as employees. Not equity participants with the benefits (some might accurately point to liabilities) that ownership conveys. Press concludes that BigLaw lawyers may now want to look more closely at how they are catering to customers.
Assess options actively
Given the recent events I’ve outlined above, it appears more important than when I began this series, that BigLaw lawyers ought to be carefully assessing their options in boutiques. I’d now add NewLaw Axiom Law and Alternative Business Structure (ABS) Riverview Law — and others similar – to those you may wish to be looking at for alternative employment.