Friday, March 22, 2013
This article is by Professor E. Thomas Sullivan and is available at 46 Ind. L. Rev. 145 (2013). Professor Sullivan is President of U. of Vermont and former Chair of the ABA Section of Legal Education.
From the introduction:
For many years, critics have sounded the alarm that the pyramid structure of America's largest private law firms was not a financially sustainable model. This model may well have served the leadership and senior partners of the large law firms for many years, but no student of efficiency would have embraced the high-pay associate model for the high-reward partner benefit as sustainable in the long-term. The 2008 recession broke the back on that well-worn model when the clients of private law firms made clear that they were no longer going to pay the high fees that supported the pyramid model. As a result, the practice and financing of the private practice of law has gone through a dramatic change: (1) the top 250 private law firms in the United States have lost over 10,000 jobs since the recession began in 2008; and (2) law firms shrank to profit growth during the recession. In addition, law firms have reorganized their structure to create a second tier of lawyers, whether partners or associates, who no longer are equity owners but now are employees. (3) There is outsourcing of some of the most basic and repetitious practices required in law firms-including work being done by non-lawyers. (4) There is wide use of technology and software to track and utilize enormous amounts of information on behalf of clients. This use of technology and computers replaces much of the labor performed by lawyers, especially in matters of e-discovery that now has overtaken much of the pre-trial discovery world and litigation. (5) Firms continue to move away from the venerable billable hours by lawyers, toward flatter fees, deferred and contingency fees, and particularly value billing concepts. (6) Highly specialized boutique law firms have been created that focus practice on one or a few narrow areas. (7) There is an increased influence of globalization as firms serve their clients with more international with branch offices throughout the world, demonstrating much more global competition among firms. (8) Law firm merger activity and firm dissolutions have increased. (9) Finally, there is the growth of non-law firm alternatives for low-end legal work, such as Legal Zoom and Robert Lawyer.
No lawyer today would disagree with the characterization that the practice of law, be it in the private sector or in the public sector, is going through a very large, structural transformation. Some praise, and others lament, that the practice has gone from a profession to a commodity based business.