The nature of the top tier law firm has fundamentally shifted in the last three decades, writes Nick James, so isn’t it natural that those most adversely affected would begin to cast around for new alternatives?
OBSERVERS of the legal industry have for a while been describing a new set of behaviors and attitudes displayed by emerging lawyers. Generation Y in particular is described as a challenge and sometimes a problem for the existing law firm model.
The new generations, we are told, are less interested in doing the work required to become a partner and are more interested in:
- profit share at an earlier age
- flexibility
- being given greater responsibility and client access
- experiencing an individual connection with their personal values and the subject matter of their work.
While both Gen Y and X are different from the generations before them, it is important to note that many of the ‘changes’ in attitude ascribed to them are in fact natural responses and adjustment to dramatic changes in the large law firm environments they are inheriting.
Today’s mega law firm juggernaut is a relatively recent phenomenon. The very largest law firms in Australia in 1980 had only just exceeded 30 partners. They also operated under a very different set of conditions. In 1979 an article comprehensively surveying the phenomenon of the emergence of the “corporate” law firm in Australia, noted that “one firm has gone so far as to … specify weekly minimum billing targets for its partners and employee solicitors”. The article continued “other law firms have clung longer to a sense of individual autonomy in the partners”.
As law firms have grown since then, in only a few decades, what once was a system of a community of partners bounded by either personal friendship or acquaintance evolved into a highly impersonal/competitive/corporatised and semi-political structure. Its decision making model: Requiring the consensus of a large group of partner-owners who have a window in their career to collect profits before retirement; has (arguably inevitably) driven management decisions which have over time tended to serve the short-term profit interests of the equity partner-owners at the expense of other important interests, including those of the emerging lawyers and even of the firms’ clients.
The fall-out has been a large factor in the crisis in our legal profession of unhappy lawyers (even in partnership ranks) and dissatisfied clients, not to mention a decline in the general level of community respect for the profession. Increasingly higher fees; higher hours worked by lawyers; behavior driven by billing targets; the overheating of the leverage model; the creation of salaried partner/special counsel roles; and the increasing delay of promotion both to and beyond senior associate; are all a result of the intense focus on profits-per-equity-partner as the fundamental goal sitting at the centre of the top tier firm.
Ultimately these sorts of observations don’t mean much in a business sense unless they necessarily lead to two conclusions:
a) Factors inherent in the current large law firm model actually make the model bad at what it must do in the long term in order to remain sustainable and successful; which is to keep its workforce and its clients happy.
And therefore:
b) The current large law firm model is vulnerable to new structures that can do a better job of giving lawyers a better place to work and clients better service and value while being able to accommodate the scale of needs of modern globalised corporations.
The structure which will win in the long term will need more than the simple advantages of incumbency which make the modern top tier law firms appear invincible at this point in time. Any new structure must, to be successful, rebalance the needs of lawyers for conditions which were once an embedded part of their working life as well as provide a dynamic engine capable of driving the growth of the business. How this is to be done is the task for the next generation of lawyers; those who have inherited a large law firm model which they can now plainly see is flawed and requires rethinking. The urgency of this task is heightened as they increasingly realise they themselves are among the primary victims of its basic dynamic and the cost to their lives as well as their professional enjoyment is too great to continue working within the existing model.
It is important to remember, that emerging alternative visions for the future for top tier practice, like the aspirations of the new generation of lawyers, are not a radical departure from the history of the legal profession. It is instead the overheated, current big firm model which is the aberration. It seems arguable that ‘new’ visions for the practice of law in fact represent a continuation of the sorts of things we have always wanted from our workplaces and which are only resurfacing now because they have been left behind for a while too long.
Nick James is the founder and director of the Sydney-based law firm Optim Legal. He is an alumnus of two top tier firms and was an associate to Justice Michael Kirby at the High Court of Australia. Comments can be left online or sent privately to nick@optimlegal.com.au.
