Big Law Firms in Trouble: When the Money Dries Up | New Republic - 0 views
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“Stable” is not the way anyone would describe a legal career today. In the past decade, twelve major firms with more than 1,000 partners between them have collapsed entirely. The surviving lawyers live in fear of suffering a similar fate, driving them to ever-more humiliating lengths to edge out rivals for business.
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then there are the indignities inflicted on new lawyers, known as associates. The odds are increasingly long that a recent law-school grad will find a job. Five years ago, during a recession, American law schools produced 43,600 graduates and 75 percent had positions as lawyers within nine months. Last year, the numbers were 46,500 and 64 percent. In addition to the emotional toll unemployment exacts, it is often financially ruinous. The average law student graduates $100,000 in debt.
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Meanwhile, those lucky enough to have a job are constantly reminded of their expendability. “I knew people who had month-to-month leases who were making $200,000 a year,” says an associate who joined a New York firm in 2010. They are barred from meetings and conference calls to hold down a client’s bill, even pulled off of cases entirely. They regularly face mass layoffs. Many of the tasks they performed until five or ten years ago—like reviewing hundreds of pages of documents—are outsourced to a reserve army of contract attorneys, who toil away at one-third the pay.
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the biggest problem is that there are simply many, many more high-priced lawyers today than there is high-priced legal work.
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Within the next decade or so, according to one common hypothesis, there will be at most 20 to 25 firms that can operate this way—the firms whose clients have so many billions of dollars riding on their legal work that they can truly spend without limit. The other 200 firms will have to reinvent themselves or disappear.
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It was only when I suggested that a mere fraction of the world’s Big Law firms would survive another decade or two that I grasped the bone-fatiguing chore of running such a business. Theiss wouldn’t endorse the premise, but he didn’t exactly refute it, either. Demand had stopped growing, he told me. There was “substantial overcapacity.” Billable hours were way down industry-wide. “I don’t think anybody who follows the profession would suggest that this is only a temporary situation,” he said. The longer Theiss spoke, the bleaker the picture became.