Is the era of biglaw over forever?

[Jake_MONDATTA]

I mean, a few decades ago people would've said the same thing about the idea that gargantuan auto companies are not eternal.

Yes, because GM has been replaced by mom and pop auto manufacturers. My point is that the nature of certain practice areas is that they require the resources a large firm can provide. Individual auto companies are certainly not eternal, but the nature of manufacturing cars is that it requires a very large company to do economically.

I'm not saying the Cravath model will exist for evermore. All I'm saying is that as long as there are fortune 500 companies and billion dollar mergers there will be biglaw in some shape or form.

(admittedly limited) auto industry analogies aside, the point I found myself objecting to was the implication that predictions of the death of biglaw are as "absurd" as predictions of the death of capitalism.  There are plenty of capitalistic economies that do not have legal firms operating on the scale of US biglaw.  In fact, there is no other capitalistic economy (including that of GB) where law firms operate on that scale.  Toyota and VW were both mentioned in a different context, but it's worth noting that neither Japan nor Germany has law firms operating on anything approaching the scale of US big law.  These are the world's second and third largest economies, respectively.

The concept of "biglaw" as it existed in bush and Clinton eras is not eternal, nor is it any more inherent in a capitalistic economy as are large automotive companies or enormous investment banks. The fact is that the US economy has operated, at various times, without any of these institutions and would likely be able to do so again in the future.   

I think the suggestion that this would be impossible is pretty wrong-headed. 

[Jake_MONDATTA]

As Burning Sands points out, it's also important to define what one means by "biglaw."  From my perspective, "biglaw" should refer both to the size of the firm as well as what it charges for its services.  I'm of the mind that firms are likely both to shrink and to become less lucrative as long as the financial industry is suffering. I don't see how either could be sustained if finance does not return to scale it was a couple of years ago... and I don't see that happening any time soon.

[nealric]

I suppose I define biglaw more expansively. To me biglaw is a 100+ (ish) attorney firm with a full-service practice.

For examples of Asian Biglaw see Kim & Chang

http://www.kimchang.com/

For mainland Europe, Loyens and Loeff

http://www.loyensloeff.com/en-US/Pages/Default.aspx

I'm a little puzzled that you don't consider the magic circle firms biglaw though. So linklaters is biglaw in NYC, but not in London?

I don't think megafirms like DLA piper must exist, but I think 100+ lawyer firms, while by no means inherent to capitalism, are not going away anytime in the near or long term future. Will billing rates go down? I'm sure they will, but I don't think changing a top partner's billing rate from $1k an hour to $700 an hour means the death of biglaw.

[contrarian]

I think both the auto-industry and death of capitalism arguments are flawed.  The auto-industry in America died because the auto-industry was run by a bunch of f-ing retards who couldn't see the blatant writing on the wall, that Americans wanted cheaper better made and more reliable cars that were more environmentally friendly.  They also didn't need 300 models from 15 different divisions.  Toyota, Kia, Honda are doing just fine, GM and Chrysler (and their unions) killed themselves.

But death of big law as the death of capitalism is way off base.  It will be the thriving of capitalism that will be the death of biglaw.  Corporations will start to question why they need multi-million dollar legal bills then they can source the same legal issues to firms that charge less hourly (or better yet on a per-incident basis), and even look at ways to cut costs by outsourcing work that doesn't necessarily need an ABA lawyer to perform (like document review) and ship it over to India where they will be happy to review as many documents as you're willing to give them for 1/10th the cost of T2 J.D.  Further, (and this is a personal pipe dream) I'd like to see shareholders revolt against the companies they own and question why these companies retain biglaw firms that charge 3 or 4 times as much as a smaller boutique firms, especially in times of economic trouble when those costs can be cut.

Is biglaw dead? No.  However it's going to  be getting older, and maturing, and it won't be the economically fertile young man it used to be.

[nealric]

I'd like to see shareholders revolt against the companies they own and question why these companies retain biglaw firms that charge 3 or 4 times as much as a smaller boutique firms, especially in times of economic trouble when those costs can be cut.
 

Legal bills are a tiny, tiny, fraction of most large corporations budgets. you won't see a shareholder revolt anytime soon. Also, high-end boutiques are not that much (if at all) cheaper than biglaw (especially if you are talking appellate lit).

[jacy85]

Yeah, I totally can see this happening if things don't pick up.

[Naked Promise]

reez, where is that posted on ATL?

[jason_perrlx]

Big law isn't over, but it may well not resemble biglaw of 2004-8 for a long, long time. Big finance has its fingers up its collective a$$.  Since big finance bankrolled biglaw for much of the past decade, expect biglaw to shrink dramatically.  There will be no need for 3/4 of the lawyers on wall st doing transactional work.  those who are left will probably get less money for what they do than a middling associate used to in '07.  Welcome to the new normal.

[simonsays]

BIGLAW will remain, but the concept of T14 is toast.

[jason_perrlx]

The t14 will remain. What will happen is that the bottom half of the class in USN 7-14 will no longer get decent jobs.  People outside the t14 will be completely screwed.