Biglaw is dying Forum

[TLSModBot]

So midlaw employment collapses, education jobs disappear, the government freezes hiring, shitlaw salaries stagnate, and you people spend five pages debating the "death" of the one sector of legal employment that's hired more people since the recession (and at higher wages, too).

Someone help me figure out how we got here.

It's almost like A. these things are connected somehow and B. Biglaw is more salient to TLS'ers as it is the home or (intended) destination of many of us!

So it looks like (a) Biglaw didn't hire fewer people now, and it's not planning on hiring fewer people for two years from now, and firms are still getting record levels of revenue from their lawyers, and even though we can sort of guess what threats might come from automation/offshoring, there are layers of guildism, regulation, inefficiency, and clients who are too rich to give a shit to peel through, and (b) It looks like most other sectors of legal employment are actually kind of dying, but we don't give a shit because most of us who gather to discuss this stuff don't do those things.

What exactly is supposed to keep a junior associate, or a 2L, or some college kid with a Powerscore, up at night?

It's just a provocative thread title to get the discussion going. If you want to work at a big firm the path is still pretty obvious and relatively simple. 10 years from now who knows.

This. I don't cosign the Johann extremism in the thread premise.

The Cravaths and Skadden of the world have nothing to fear. They can keep doing what they're doing forever at this rate. But the Cadwaladers, Fried Franks, and various other middle-of-the-road firms can't. New hiring classes and salary bumps are great signaling mechanisms that everything's fine, but the real data to look at is law firm revenue. A sizeable portion of firms are seeing stagnation or shrinking revenue while getting hit with higher costs with increasing salaries, in a hot lateral partner (and associate!) market.

Lateral transfers have increased year over year with no sign of slowing. Firms will consolidate more (we won't likely become the Big 4 like I'm accounting but I think that provides a rough model for the direction we're heading) to stave off insolvency.

The real immediate fear probably isn't net job loss, but a sudden and severe unexpected firm collapse that puts several hundred lawyers or more out on their ass in an instant, a la Bingham, Dickstein Shapiro, etc.

[TLSModBot]

I need a current law student so I can access the 2016 AmLaw data

[t-14orbust]

merp

[Monochromatic Oeuvre]

So midlaw employment collapses, education jobs disappear, the government freezes hiring, shitlaw salaries stagnate, and you people spend five pages debating the "death" of the one sector of legal employment that's hired more people since the recession (and at higher wages, too).

Someone help me figure out how we got here.

It's almost like A. these things are connected somehow and B. Biglaw is more salient to TLS'ers as it is the home or (intended) destination of many of us!

So it looks like (a) Biglaw didn't hire fewer people now, and it's not planning on hiring fewer people for two years from now, and firms are still getting record levels of revenue from their lawyers, and even though we can sort of guess what threats might come from automation/offshoring, there are layers of guildism, regulation, inefficiency, and clients who are too rich to give a shit to peel through, and (b) It looks like most other sectors of legal employment are actually kind of dying, but we don't give a shit because most of us who gather to discuss this stuff don't do those things.

What exactly is supposed to keep a junior associate, or a 2L, or some college kid with a Powerscore, up at night?

It's just a provocative thread title to get the discussion going. If you want to work at a big firm the path is still pretty obvious and relatively simple. 10 years from now who knows.

This. I don't cosign the Johann extremism in the thread premise.

The Cravaths and Skadden of the world have nothing to fear. They can keep doing what they're doing forever at this rate. But the Cadwaladers, Fried Franks, and various other middle-of-the-road firms can't. New hiring classes and salary bumps are great signaling mechanisms that everything's fine, but the real data to look at is law firm revenue. A sizeable portion of firms are seeing stagnation or shrinking revenue while getting hit with higher costs with increasing salaries, in a hot lateral partner (and associate!) market.

Lateral transfers have increased year over year with no sign of slowing. Firms will consolidate more (we won't likely become the Big 4 like I'm accounting but I think that provides a rough model for the direction we're heading) to stave off insolvency.

The real immediate fear probably isn't net job loss, but a sudden and severe unexpected firm collapse that puts several hundred lawyers or more out on their ass in an instant, a la Bingham, Dickstein Shapiro, etc.

As you pointed out, consolidation is probably inevitable to some extent. There's really no reason Biglaw couldn't be like eight DLA Pipers.

But as long as all the associates are generating more revenue than they cost, there'll be work for them somewhere. Revenue per lawyer keeps hitting new highs, so regardless of what kind of firms they're in, they'll keep getting good paychecks. At least until companies start asking why juniors are billed at $600/hour to do sig pages.

[Anonymous User]

This is just my 2 cents, but I am summering at a good firm in the v50-100 range. Secondary office, but DC/Chicago market, main office elsewhere. My firm used to have 10+ summers in the office I am heading, told me it was planning 5+ this summer, but I am the only summer. They decided to just have one. How concerned should I be? This was my only SA offer, but it was in the city I wanted to be in.

[Anonymous User]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

[smaug]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

There's often little benefit to mergers but firms keep trying it anyway.

Other than Wilmer and Hogan it's hard to think of firms that did the true merger thing well.

[Tiago Splitter]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

When firms consolidate it suggests one or both of them was too weak to survive on its own. But we still have a huge number of biglaw firms so I don't know if it moves the needle much in the aggregate. The Big 8 becoming the Big 6-Big 5-Big 4 was a big deal for accounting students but the V100 becoming the V99 doesn't change things for law students.

[Monochromatic Oeuvre]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

If work concentrates more heavily at the top of the market, the Chadbournes and Stroocks of the world have to choose between either (a) no longer pretending they're on the same tier/competing for the same talent, or (b) trimming the fat while staying large enough to be relevant/handle valuable deals. If you're too embarrassed to do (a), then a merger is usually your only remaining option for (b).

[BearState]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

If work concentrates more heavily at the top of the market, the Chadbournes and Stroocks of the world have to choose between either (a) no longer pretending they're on the same tier/competing for the same talent, or (b) trimming the fat while staying large enough to be relevant/handle valuable deals. If you're too embarrassed to do (a), then a merger is usually your only remaining option for (b).

Do ethics rules/conflicts put up some kind of floor on consolidation? I don't know if the accounting industry has similar rules that cut against their consolidation.

[FSK]

Tl;dr of this thread: https://en.wikipedia.org/wiki/Memento_mori

[Monochromatic Oeuvre]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

If work concentrates more heavily at the top of the market, the Chadbournes and Stroocks of the world have to choose between either (a) no longer pretending they're on the same tier/competing for the same talent, or (b) trimming the fat while staying large enough to be relevant/handle valuable deals. If you're too embarrassed to do (a), then a merger is usually your only remaining option for (b).

Do ethics rules/conflicts put up some kind of floor on consolidation? I don't know if the accounting industry has similar rules that cut against their consolidation.

Don't accountants have COI rules that are sort of like ours with respect to the various services they offer?

It matters to the extent clients care, but they probably won't if consolidation means cost savings to them (and it will).

[TLSModBot]

Chadbourne getting swallowed by Norton Rose Fulbright

It continues

[Nebby]

Chadbourne getting swallowed by Norton Rose Fulbright

It continues

Yep

On that note, Arnold & Porter Kaye Scholer is such a ridiculous name

[TLSModBot]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

There's often little benefit to mergers but firms keep trying it anyway.

Other than Wilmer and Hogan it's hard to think of firms that did the true merger thing well.

The acquiring firm usually gets a short term revenue boost from old firm's accounts receivable plus forcing some of the acquired partners to take a paycut.

Long term benefits are dubious but I'd say there's less of a merger "failure" rate than there is a "meh" result rate and firms are willing to put up with that for a short term payday

[TLSModBot]

Swallowing up little firms is fine because you can integrate and utilize the new people pretty easily. Two big firms joining forces just rarely makes sense from any traditional M&A framework of efficiencies or new markets etc.

[trebekismyhero]

This is just my 2 cents, but I am summering at a good firm in the v50-100 range. Secondary office, but DC/Chicago market, main office elsewhere. My firm used to have 10+ summers in the office I am heading, told me it was planning 5+ this summer, but I am the only summer. They decided to just have one. How concerned should I be? This was my only SA offer, but it was in the city I wanted to be in.

Probably ok, but it would suck to be the only summer. See what it is like this summer and do some mass mailing and 3L OCI to cover your bases

[Hikikomorist]

I need a current law student so I can access the 2016 AmLaw data

How does this work? Via Lexis/Westlaw?

[dabigchina]

I don't understand the consolidation argument. Is it inevitable because theres no other way for organic growth? I dont think the benefifs if massive consolidation outweigh the risk of a more likely massive collapase

If work concentrates more heavily at the top of the market, the Chadbournes and Stroocks of the world have to choose between either (a) no longer pretending they're on the same tier/competing for the same talent, or (b) trimming the fat while staying large enough to be relevant/handle valuable deals. If you're too embarrassed to do (a), then a merger is usually your only remaining option for (b).

Do ethics rules/conflicts put up some kind of floor on consolidation? I don't know if the accounting industry has similar rules that cut against their consolidation.

Don't accountants have COI rules that are sort of like ours with respect to the various services they offer?

It matters to the extent clients care, but they probably won't if consolidation means cost savings to them (and it will).

SarbOx is nowhere near as restrictive, but yes. That is why 4 is the minimum number of "big" firms there can be. If the big4 became the big3, there wouldn't be enough firms with the capacity to adequately serve all the clients the firms currently have without violating SarbOx.

[Anonymous User]

This is just my 2 cents, but I am summering at a good firm in the v50-100 range. Secondary office, but DC/Chicago market, main office elsewhere. My firm used to have 10+ summers in the office I am heading, told me it was planning 5+ this summer, but I am the only summer. They decided to just have one. How concerned should I be? This was my only SA offer, but it was in the city I wanted to be in.

Probably ok, but it would suck to be the only summer. See what it is like this summer and do some mass mailing and 3L OCI to cover your bases

Yeah not too pumped about being the only summer. When should I start my mass mailing? Is it too early before I get an offer to return or whats the timeline like?

[Anonymous User]

This is just my 2 cents, but I am summering at a good firm in the v50-100 range. Secondary office, but DC/Chicago market, main office elsewhere. My firm used to have 10+ summers in the office I am heading, told me it was planning 5+ this summer, but I am the only summer. They decided to just have one. How concerned should I be? This was my only SA offer, but it was in the city I wanted to be in.

Probably ok, but it would suck to be the only summer. See what it is like this summer and do some mass mailing and 3L OCI to cover your bases

Yeah not too pumped about being the only summer. When should I start my mass mailing? Is it too early before I get an offer to return or whats the timeline like?

I was 1 of 2 SAs, and the other SA was in corp dept of our office and I was in lit. Granted, two is better than one, even with our limited interaction. It wasn't so bad. You'll have less events and probably more work, but I dont think its the worst thing in the world. I doubt the office -- if at a typical 100% (or close) offer firm -- is going to no offer their only summer.