More Complex Than GreedJune 1, 2012 3:52 pm Attorney Articles, Legal Recruiter
William D. Henderson
The Am Law Daily
Dewey & LeBoeuf, an amalgam of two storied New York City law firms that merged in 2007, has died. Understandably, this has prompted a lot of soul-searching among lawyers. One storyline that will attract many followers is that large law firm lawyers, long viewed as the profession’s elite class, have lost their way, betraying their professional ideals in the pursuit of money and glory. This narrative reinforces that lawyer-joke mentality that lawyers just need to be become better people.
And that narrative is wrong. Yes, we all need to become better people, but that still won’t begin to cure the larger structural problem affecting large U.S. law firms. At its core, Dewey’s collapse has less to do with individual moral failings than with aging organizational structures that worked remarkably well for over a century, but now, for a variety of reasons, inhibit law firms’ ability to adapt to a changing legal marketplace.
Many law firm leaders recognize this problem, yet they struggle to communicate it convincingly to partners who have become rich under the existing model. The economics are compelling. Between 1978 and 2003, legal services as a percentage of the nation’s GDP increased from 0.4 percent to 1.8 percent. In the mid-2000s, average profit per partner shattered the $1 million-per-year barrier and kept climbing. This pattern of getting a bigger slice of a bigger economic pie continued right up until the collapse of Lehman Brothers in the fall of 2008. Continued…