By Julia Claire Shapiro
Special to the Legal
The pink slip death began with the little people. The layoffs of lower-level associates, midsized firms shuttering, the rescinded offers, the law school debt, the lack of jobs. As the legal elite continued on with their party, the Reaper stood in the corner. A brief hush would fall over the room as he tapped the lesser nobility on the shoulder at regular intervals. Those who remained returned to their revelry. When he tapped Dewey on the shoulder, a murmur rippled through the room.
Some panicked, others rationalized. Above the Law has an entertaining survey of the blame game: lavish guarantees, lack of business, legal market crash and my personal favorite, the East Egg (the pedigreed prestigious pre-merger Dewey plagued by debt) v. West Egg (The scrappy and flashy pre-merger LeBouef that knew how to make green).
A growing segment of the legal industry is acknowledging that they are not immune, that strains of Dewey exist in their own firms. This is how I’m now invited to speak to the the same types of people who thought I was highly eccentric in 2009 when I began warning that the Reaper would come for BigLaw, too, and encouraged them to keep their workforces flexible with per diem attorneys and other flexible work arrangements.
Now, I’ve found that one slide makes law firm conference rooms pause. It contains two tales of horror: (1) Axiom Law’s recent growth — $1M in 2002, $80M in 2011 and on track to make $120M in 2012 and (2) the growing list of similar models that take the trained associates and increasingly Fortune 100 clients of AmLaw Top 50-200 firms. In return for lower legal bills, clients accept a software-based infrastructure and BigLaw alums sometimes working with them on site in place of high-rent offices. Pedigreed attorneys accept comfortable six-figure salaries and 40-hour workweeks in lieu of 80+ hour workweeks, higher salaries and partner potential.
After cross-examination from the room, there is another pause and you can see the silent reactions. “Is this death such a bad thing?” “This is an unfair attack on the belief system I have worshipped and sacrificed for my entire career!” “A mere alarmist, yawn.”
Alternative legal models are not likely to address all large clients’ needs, nor are they the face behind the Reaper’s masque. But their revenues make a statement. The legal climate is changing without the blessings of the legal elite. Even the firms once so sure in their stature and ability to survive the harshest conditions must evolve or die. Whether from client leverage to demand increasingly lower rates, or storied firms declaring bankruptcy under the weight of a dry legal market and lavish guaranteed compensation to partners, to businesses that quickly rotate through executives who are more persuaded by increased profits per share in the next quarter than relationships, the traditional law firm model is dead. And neither I, nor alternative legal models, killed it.
Julia Claire Shapiro co-founded Hire an Esquire, which enables law firms and legal departments to locate, manage and pay contract and per diem attorneys and local counsel with ease online. She also acts as a research analyst and subject matter expert for the legal service industry clients of a national consulting firm. In addition to practicing law and consulting, she has taught legal research and writing as an adjunct in Temple University Beasley School of Law’s International LL.M. Program.