Last Days of Big Law - New Republic article Mayer Brown Forum

[84651846190]

FYI the author of this article is doing an AMA on Reddit right now:

http://www.reddit.com/r/IAmA/comments/1 ... writer_at/

For example, you encounter people who went to litigation-only shops like Quinn Emanuel, who seem pleased with the decision.

I lol'ed.

ditto

[HarlandBassett]

Yeah, and to be fair he does kind of cop to the fact that the article wasn't really about the demise of big law, here:

yeah, to be honest, the point of the piece was really to pull back the curtain on a big firm and show people how it works in practice. the broader economic arguments are important, but they've clearly been out there for a while, and i didn't think of myself as advancing the ball on ton there. it was more the backdrop for my piece than the point of it.

http://www.reddit.com/r/IAmA/comments/1 ... at/cb9cxt5

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[tlsguy2020]

Fascinating to revisit this nearly a decade later. Biglaw clearly survived and thrived, lockstep partnership died. Also TLS still having V5 vs I-Banking flame wars

[Anonymous User]

Honestly the weirdest part of this is taking a journalist so seriously. I feel like now we'd be too jaded to even discuss it. "lol look at this ATL troll"

[thisismytlsuername]

Where are we on this?

[Monochromatic Oeuvre]

It's probably not crazy to think an EWYK firm, highly leveraged and dependent on a small number of rainmakers, is gonna go belly-up the next serious crash. I think Cadwalader was my example when we were talking about firm health at the start of Covid--they were dependent on about 20 rainmakers and were really leveraged, especially with a lot of expensive seniors/counsel/NEPs. That's how firms with a nominal high PPP can actually be pretty unstable--if you have a 25% profit margin, a 20% downturn wipes out the partners entirely, unless you reduce expenses (as CWT and other firms did with base salaries, and would have done with bonuses year end, even if fewer people hit hours targets). Of course, leverage is a double-edged sword. In good times with a great securitization business, it's Chadwalader and new yacht orders. If things go shitty, I guess you get Boies (if you're not actually cooking the books like Dewey was).

Some existential threats have been around for a while. People have been saying technology will kill jobs forever--doc review as a mega-institution died a slow and then very abrupt death post-2008. People have been saying AI is juuuust about ready to draft briefs and ancillaries for years now. Hasn't happened and it may happen slowly or quickly. Some are new/abrupt, like SCOTUS killing patent lit immediately.

Saying that Biglaw was going to die, or massively shrink, was a stupid idea even in 2013. It was stagnant and looking like a shittier proposition and it partly contributed to declining law school enrollment for years (although that was mostly an improving economy and a ton of press about what a scam law school was), but that just meant firms had to dive a little deeper into classes and years later a pile of anons would complain their preftigious firm was infested by awful laterals from Bumfuck LLP/Northeastern South Dakota A&M Law School, and really, who gives a fuck? There is a massive backlog of people who want to work in this industry at every level; it'll just be re-constituted unless legal fees ever become something more than a rounding error to most Biglaw clients.

Firms won't be going gangbusters forever, and change is going to kill various aspects of the profession over time, but the industry is really, really far away from any kind of existential crisis or anything that just changes the number of millions at the top.

[Anonymous User]

Wait, the Supreme Court killed patent lit?

[Monochromatic Oeuvre]

Someone who knows more than me (i.e. next to nothing) could add more, but there was a SCOTUS case called Alice in 2014 that essentially said preexisting ideas are not patentable merely because software is used to manage them. My understanding is that this immediately invalidated a ton of patents in dispute and killed thousands of potential cases in the womb, and that patent lit was inundated with those types of cases (and often with the exact same patents coming up over and over). So not *killed*, but maybe injured it to an extent it hasn't recovered from. If that's incomplete, out of date, or outright bullshit, anyone can supplement.

[njdevils2626]

Someone who knows more than me (i.e. next to nothing) could add more, but there was a SCOTUS case called Alice in 2014 that essentially said preexisting ideas are not patentable merely because software is used to manage them. My understanding is that this immediately invalidated a ton of patents in dispute and killed thousands of potential cases in the womb, and that patent lit was inundated with those types of cases (and often with the exact same patents coming up over and over). So not *killed*, but maybe injured it to an extent it hasn't recovered from. If that's incomplete, out of date, or outright bullshit, anyone can supplement.

Not a patent attorney and also know next to nothing, but I think TC Heartland in 2016 also hurt the patent litigation industry by providing that defendants could only get sued in their state of incorporation and PPB, rather than essentially anywhere, removing thousands of cases from the Eastern District of Texas which was insanely plaintiff-friendly

[Anonymous User]

Is there a good article out there that explains Shearman’s fall from grace? (Like from a V10 “it” firm to…whatever it is today?) I’m assuming it had something to do with the financial crisis.

[Anonymous User]

This story was really interesting and frustrating. It’s cliche, but the Boomers really had it all, ascended to the top, and then pulled the ladder up behind themselves. There is no one to blame for the “Kirklandization” of biglaw than themselves.

And maybe it was inevitable. If I were a rainmaker at Big Lockstep LLP and Kirkland & Latham down the street offered me a lot more money, I’d probably at least think about it.

One factor mentioned in the story briefly is the proliferation of information about compensation. Before everybody knew what everyone else was earning, they were content. But once they could see that the firm down the street had richer partners, they all started to figure out how they could get a bigger slice for themselves.

[Anonymous User]

I jumped into the thread not knowing it was from 2013 and read the article and again, didn't notice it was from 2013 haha - I thought it was a recent article. I kept thinking how stupid it was and that biglaw is thriving. Reading comprehension skillzz.

[dabigchina]

Is there a good article out there that explains Shearman’s fall from grace? (Like from a V10 “it” firm to…whatever it is today?) I’m assuming it had something to do with the financial crisis.

They got hit hard by the dot com bubble and never really recovered.

https://observer.com/2005/04/shearminat ... -to-leave/

[Sackboy]

Is there a good article out there that explains Shearman’s fall from grace? (Like from a V10 “it” firm to…whatever it is today?) I’m assuming it had something to do with the financial crisis.

They got hit hard by the dot com bubble and never really recovered.

https://observer.com/2005/04/shearminat ... -to-leave/

It's a bit more complex than this. A few years after the article you posted was written, Shearman was as high as a V12 (or so). They also got hosed by the GFC, because they were overly dependent on their Capital Markets and M&A groups. In addition, Shearman continued to lean into public M&A like Cravath, S&C, etc. but it just missed the threshold of being able to pull that off. Now, Shearman is going into the 2020s and beyond with a pathetic private equity practice and not nearly the public M&A stable as it used to share with DPW/S&c/etc. 10 years ago. With their poor PE practice and continued reliance on pubco M&A/CM, the pandemic was another struggling point for the firm. They suffered from the early days (like many firms), but then their spigot never really got turned on when everyone else got back up and running, because they have no PE clients. Another misstep by the firm was to focus on expanding quickly in international markets, which aren't nearly as profitable as the U.S. has been. While big firms were setting up significant offices in other major U.S. markets and building relationships with great clients, Shearman has pretty much only existed in NY with very lean satellite offices elsewhere. A decade+ of mismanagement at work.