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The Demise of Big Law: Does Startup Culture Provide a Solution?

There’s been a lot of discussion about BigLaw in the wake of announcements regarding recent mergers and the outright dissolution of a few firms. I would suggest that the answer lies in changing the ways in which lawyers perceive their primary job function–and that of law firms–and that startup culture can provide incredible guidance in this regard.

But before I expand on that idea, let’s take a look at some of the underlying reasons suggested for the BigLaw crisis. Many who have offered their opinions argue that a major cause is greed, plain and simple, as explained in this recent article from the New Republic:

Part of the reason the law-firm ecosystem has changed so dramatically in a single generation is greed: The most profitable partners steadily discarded their underachieving colleagues, because they didn’t want to share the spoils…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.

So far, the transition has not been smooth. In fact, the more you talk to partners and associates at major law firms these days, the more it feels like some grand psychological experiment involving rats in a cage with too few crumbs.

Jordan Furlong reaches the same conclusion in his recent post about the rash of legal secretary layoffs, contending that a mean-spirited selfishness is at the core of the problem. He posits that instead of facing the actual issues head on, managing partners are simply taking short-sighted steps to maintain their positions and wealth, with little thought of the future or the underlying issues causing the previously unheard of fiscal crises many large firms are now encountering:

Something has gone seriously wrong at the core of a number of law firms. I don’t how else to describe it except as a mean streak—a level of selfishness and ruthlessness among decision-makers that we’ve not seen before. The triggering event was probably the massive change in client behavior and the deeply unnerving drop in business that followed, combined with lawyers’ utter inability to adjust their own practices in response.

Similarly, Ron Friedmann reflects on the predicted decline of BigLaw in a recent post and contends that one cause of managing partners’ apparent selfishness may be the result of their looming retirement and thus unwillingness to plan for anything more than maintaining profit levels in the short term:

Too many (law firm partners) seem focused on cost cutting and re-allocating profits rather than fundamentally changing how they deliver legal services and advice. It may be that partners 50 and older do not need to worry; after all, change, to the extent it happens, moves slowly in legal. If, however, I were a newly minted partner or just in my 40s, I might be paying close attention to these alternatives—and taking action.

At its core, the less than exemplary behavior described above is encouraged by the structure of most law firms–one that emphasizes the interests of the individual over those of the group. Lawyers in large and mid-sized firms are rewarded for bringing in a personal book of business and as a result, jealously guard their clients and cases.

For these lawyers, the law firm is often viewed as the entity within which the lawyers operate–rather than the entity for which they operate. The service delivered by each lawyer to his or her client is viewed as one that is personally provided rather than a commoditized service delivered by the firm as a whole. Internally, favorable case outcomes are perceived as a victory for the individual lawyer rather than that of the firm. In other words, mid-sized and large firm lawyers generally operate for the good of themselves, not the good of the firm.

Is it at all surprising that this mindset breeds jealousy, selfishness and greed? Law firms—rather than being perceived as entities that are bigger and more important than the sum of their parts—are viewed as disposable shells, mere life support systems upon which lawyers leech until retirement. The success of the individual lawyer often matters more than that of the firm as a whole.

Startups, however, are a different story—and lawyers can learn a lot from startups. In the startup culture, the team works together to achieve success for the company. Each team member contributes different pieces of the puzzle, all of which are important, with the end goal being happy customers. In order for startups to thrive, they must meet the needs of their customers. Doing so is of paramount importance and thus shifting consumer expectations must be quickly met with a corresponding shift on the startup’s behalf. Also important, long-term success is the end goal of most startups. Of course the definition of “success” can change over time, but generally speaking, the team operates with the long-term success of the business in mind.

In other words, startup culture provides law firms with a wonderful example of what it means to pivot and be responsive to customers’ needs. And, as I’ve argued in the past, in order to survive in this rapidly changing legal landscape, mid-sized and large law firms must indeed learn to pivot. Otherwise, the short-sightedness and selfishness of the current law firm culture will quickly and inevitably lead to its demise.

So, pivot or pay the price. Which path are you going to take?

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