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

[NYstate]

wait, when did law become a business? i thought it was a profession! but seriously, this is old news to every other industry. our generation is poised to bring concepts of value and efficiency to the practice of law. when markets change, it is a great time to be in as long as you can avoid getting drowned. anybody who started law school after 2008 is not going to be surprised by any of this. the people currently in power at biglaw firms are not equiped to handle this - they are from a dfiferent universe

The flaw I see is that value and efficiency come at the expense of the number of associates hired. Because so many people are counting on biglaw to pay their loans, this is not great news for those with massive debt and a shrinking employment market. The other flaw is the need for large firms to handle comes, sophisticated matters, but no economies of scale for biglaw.

I guess we agree that the problem is the greed of the partners- but Dewey wasn't even funding it's pension obligations to previous partners. They were in a very deep hole.

Partners are already being cut. Weil basically said they would cut partners but are not allowed to under the partnership agreement, so they cut salaries. Firms are getting rid of non- producing partners.

[AAJD2B]

I, for one, would feel safer landing an offer from the likes of DPW or STB versus Mayer Brown or Paul Hastings.

I figure the firms "who have so many billions of dollars riding on their legal work that they can truly spend without limit" includes the likes of:

Wachtell
Sullivan & Cromwell
Davis Polk
Cravath
Skadden
Simpson Thacher
Williams & Connolly
Quinn Emanuel
Paul Weiss
Cleary Gottlieb


....I wonder who else I am missing.

But these firms aren't going to make you partner anyway.

And I think Quinn and Paul Weiss shouldn't be on that list.

Where have I indicated I was after partnership, besides which you're in no position to predict anyone's potential.

Partners are not immortal. Anyway......

I didn't mean you in particular. I mean generally. Partnership prospects are so freaking slim, it's not worth worrying about.

And if you aren't interested in partnership why are you so scared about the long-term aspects of the firms? Mayer Brown isn't going to implode in the next decade. And even if it does, you'll find another biglaw job.

Slim does not mean impossible. Your earlier comment suggest the latter.

I never stated where I stood on partnership interests, so I am uncertain where you're getting the "if you aren't interested" assumption.

However, for sake of argument, whether or not I was interested in partnership I would prefer obtaining my experience at a firm that has bigger deals and bigger clients, where I need not ever worry how I will make my quota hours of billables and then some. More firms than ever are experiencing lull periods with little work to go around. Often times this can and does result in discreet layoffs, delayed start dates for junior associates or worse yet, rescinded offers. I would rather avoid such potential occurrences and record shows that this seldom if ever happens at the rainmaker firms that can pick and choose which clients they want, not vice versa.

[nyf]

wait, when did law become a business? i thought it was a profession! but seriously, this is old news to every other industry. our generation is poised to bring concepts of value and efficiency to the practice of law. when markets change, it is a great time to be in as long as you can avoid getting drowned. anybody who started law school after 2008 is not going to be surprised by any of this. the people currently in power at biglaw firms are not equiped to handle this - they are from a dfiferent universe

Been saying this for a while too...like why is it shocking to ANYONE who was born after 1975 that jobs are NEVER 100% stable, that you have to network to get work, and that competition is FIERCE in the world. like....these are old men who are scared of the new coming. Yup, law is changing...to be like every other industry. It's not a shocker.

[c3pO4]

wait, when did law become a business? i thought it was a profession! but seriously, this is old news to every other industry. our generation is poised to bring concepts of value and efficiency to the practice of law. when markets change, it is a great time to be in as long as you can avoid getting drowned. anybody who started law school after 2008 is not going to be surprised by any of this. the people currently in power at biglaw firms are not equiped to handle this - they are from a dfiferent universe

Been saying this for a while too...like why is it shocking to ANYONE who was born after 1975 that jobs are NEVER 100% stable, that you have to network to get work, and that competition is FIERCE in the world. like....these are old men who are scared of the new coming. Yup, law is changing...to be like every other industry. It's not a shocker.

you can tell a lot by people's reaction to articles like this. it's either, "this is so sad/depressing" or "duh/overdue/how did they ever think otherwise" if i was in a firm and someone had the former reaction, that would be a giant flashing danger sign. like when weil put out that press release that "this is the new normal," just lol. this is a 3 decade old normal. welcome to the party.

[09042014]

I just don't see how the article is even arguing that it's the last days of big law. It talks for like 2 paragraphs at the end about who there is stiff competition for new business. That's it?

The rest of the article is fascinating, but it's not exactly spelling the end of big law. More like, how the greedy fucks who run the places got to where they are now.

[Bronte]

Journalists just love to put "the end of" or something to that effect in their headlines to get more clicks. The end of big law or the end of Wall Street (which was the gist of innumerable articles during the crisis) would equate to the end of the American economy. It's just absurd unless you're apocalyptic, in which case that's a different story.

As to that list of indispensable firms posted above, blatant trolling against some obvious peer firms.

[IAFG]

I just don't see how the article is even arguing that it's the last days of big law. It talks for like 2 paragraphs at the end about who there is stiff competition for new business. That's it?

The rest of the article is fascinating, but it's not exactly spelling the end of big law. More like, how the greedy fucks who run the places got to where they are now.

I thought the same. Fascinating take on politics but not much of a condemnation of the business model.

[NYstate]

wait, when did law become a business? i thought it was a profession! but seriously, this is old news to every other industry. our generation is poised to bring concepts of value and efficiency to the practice of law. when markets change, it is a great time to be in as long as you can avoid getting drowned. anybody who started law school after 2008 is not going to be surprised by any of this. the people currently in power at biglaw firms are not equiped to handle this - they are from a dfiferent universe

Been saying this for a while too...like why is it shocking to ANYONE who was born after 1975 that jobs are NEVER 100% stable, that you have to network to get work, and that competition is FIERCE in the world. like....these are old men who are scared of the new coming. Yup, law is changing...to be like every other industry. It's not a shocker.

I think you grossly underestimate the competitive drive of most partners at biglaw firms. They are not going to let go of what they have for anyone and they are going to try to take what you have if you are in their way. They may be greedy; but they aren't complacent.

Edit to add: all the efficiencies they are coming up with mean current students have a much smaller chance of getting what these partners had- or even getting a biglaw job in the first place. The efficiency means fewer jobs for grads.

[laxbrah420]

I think people underestimate how much Dodd-Frank's gonna fuck big finance which of course will fuck law. Compliance jerbs will boom for a few years but whatever.

[Bronte]

I think people underestimate how much Dodd-Frank's gonna fuck big finance which of course will fuck law. Compliance jerbs will boom for a few years but whatever.

Hard to see how this is anything more than marginal. Dodd-Frank is not going to shrink the size of the financial sector. It's just going to move certain activities from banks to other financial institutions and maybe restrict the profitability of banks. Any effect this has on big law will likely be offset by the increase in compliance work. Stuff like mergers and litigation that is at the heart of the big law model won't be materially affected.

[c3pO4]

wait, when did law become a business? i thought it was a profession! but seriously, this is old news to every other industry. our generation is poised to bring concepts of value and efficiency to the practice of law. when markets change, it is a great time to be in as long as you can avoid getting drowned. anybody who started law school after 2008 is not going to be surprised by any of this. the people currently in power at biglaw firms are not equiped to handle this - they are from a dfiferent universe

Been saying this for a while too...like why is it shocking to ANYONE who was born after 1975 that jobs are NEVER 100% stable, that you have to network to get work, and that competition is FIERCE in the world. like....these are old men who are scared of the new coming. Yup, law is changing...to be like every other industry. It's not a shocker.

I think you grossly underestimate the competitive drive of most partners at biglaw firms. They are not going to let go of what they have for anyone and they are going to try to take what you have if you are in their way. They may be greedy; but they aren't complacent.

Edit to add: all the efficiencies they are coming up with mean current students have a much smaller chance of getting what these partners had- or even getting a biglaw job in the first place. The efficiency means fewer jobs for grads.

yea... there is massive over capacity. there are too many jobs currently. the compensation structure is screwed up all across the board, as is hiring. i don't think you are actually disagreeing with us. our only point is -- for firms/people who manage to survive and can apply business principles utilized by every other industry during similar transitions that have/been occured/occuring for decades there will be massive opportunities ahead.

[Samara]

I just don't see how the article is even arguing that it's the last days of big law. It talks for like 2 paragraphs at the end about who there is stiff competition for new business. That's it?

The rest of the article is fascinating, but it's not exactly spelling the end of big law. More like, how the greedy fucks who run the places got to where they are now.

What I got from the article was more that it could be the end of the cushy/safe biglaw compensation models, such as the part on all the different models of partner compensation Mayer has tried in recent years. As you said, Dewey was an issue of partner compensation, not of business generation.

If you believe that all this flat fee, outsourcing, and software talk signals a permanent shift in revenue production, there probably should be an accompanying shift in compensation structures. If you believe that biglaw will innovate around these pressures or that demand will not be affected, then compensation structure are unlikely to change significantly.

I don't know enough to know if the recent trend of layoffs and stealthing is anything new or just better publicized. It does seem like firms are experimenting with more aggressive expansion efforts in a tradeoff for less "stability" but maybe that's a temporary response to ITE.

[NYstate]

wait, when did law become a business? i thought it was a profession! but seriously, this is old news to every other industry. our generation is poised to bring concepts of value and efficiency to the practice of law. when markets change, it is a great time to be in as long as you can avoid getting drowned. anybody who started law school after 2008 is not going to be surprised by any of this. the people currently in power at biglaw firms are not equiped to handle this - they are from a dfiferent universe

Been saying this for a while too...like why is it shocking to ANYONE who was born after 1975 that jobs are NEVER 100% stable, that you have to network to get work, and that competition is FIERCE in the world. like....these are old men who are scared of the new coming. Yup, law is changing...to be like every other industry. It's not a shocker.

I think you grossly underestimate the competitive drive of most partners at biglaw firms. They are not going to let go of what they have for anyone and they are going to try to take what you have if you are in their way. They may be greedy; but they aren't complacent.

Edit to add: all the efficiencies they are coming up with mean current students have a much smaller chance of getting what these partners had- or even getting a biglaw job in the first place. The efficiency means fewer jobs for grads.

yea... there is massive over capacity. there are too many jobs currently. the compensation structure is screwed up all across the board, as is hiring. i don't think you are actually disagreeing with us. our only point is -- for firms/people who manage to survive and can apply business principles utilized by every other industry during similar transitions that have/been occured/occuring for decades there will be massive opportunities ahead.

Yes. I do disagree. You both feel that current partners don't know how to deal with a changing landscape or how to compete. They have been competing and winning for decades. They may take a while to figure out how to deal with a new business model, but I would never for a minute think they can't get there. Don't underestimate how good they are at what they do.

[nyf]

Been saying this for a while too...like why is it shocking to ANYONE who was born after 1975 that jobs are NEVER 100% stable, that you have to network to get work, and that competition is FIERCE in the world. like....these are old men who are scared of the new coming. Yup, law is changing...to be like every other industry. It's not a shocker.

I think you grossly underestimate the competitive drive of most partners at biglaw firms. They are not going to let go of what they have for anyone and they are going to try to take what you have if you are in their way. They may be greedy; but they aren't complacent.

Edit to add: all the efficiencies they are coming up with mean current students have a much smaller chance of getting what these partners had- or even getting a biglaw job in the first place. The efficiency means fewer jobs for grads.

yea... there is massive over capacity. there are too many jobs currently. the compensation structure is screwed up all across the board, as is hiring. i don't think you are actually disagreeing with us. our only point is -- for firms/people who manage to survive and can apply business principles utilized by every other industry during similar transitions that have/been occured/occuring for decades there will be massive opportunities ahead.

Yes. I do disagree. You both feel that current partners don't know how to deal with a changing landscape or how to compete. They have been competing and winning for decades. They may take a while to figure out how to deal with a new business model, but I would never for a minute think they can't get there. Don't underestimate how good they are at what they do.

And you seem to think that all the partners are working together to screw over the next generation of attorneys. That's practically a conspiracy theory. I hope to god the partners I work with figure out how to keep competing. I plan on working/learning from them. We all know that "nobody" makes partner. Obviously, that is not strictly true, but yes, the probabilities are very low. This is nothing new. The article even said that Cravath has ALWAYS operated by winnowing away associates until only the strong survive. The point is, we have the old partners (in their 60s and 70s) - these people will die/retire in next 5-15 years on average (especially considering that they are men in high stress occupations so life expectancy isn't terrific). Then you have the partners in their 40s and 50s. These people will either figure out to compete (great! let's follow them) or they will think they can still just sit on their hands until legal work comes to them and they will FAIL. This article starts out strong by explaining how lawyers used to think their skills were so great that people would come to them, begging for help and willing to pay. Like, no and that's NOT the case for real estate, ibankers, and Fortune 500 companies either. It's mad competitive out there . . . ask the executives at any company. But some old school lawyers really are some of the ONLY people who seem not to get that. You are telling me now that they are so smart so I better watch out bc they're gonna wise up. Please god say it's true. That's in my best interest too. My point is that the fear in this article is largely drummed up by the losers who are like, wait I have to work to get work?


edit to add: Also, I agree that there could/likely will be fewer jobs out there in big law land. That's a contraction, but it's not going to be ENORMOUS unless everything about this country's legal system changes OR the entire economy tanks. Either is possible. #2 may even be likely. But, there will always be a demand for legal services. Someone has to writing these Fing prospectuses. If the economy is growing, lawyers will be absorbed somehow or other. They just might not be at biglaw. Agreed.

[Borhas]

Fascinating article

[c3pO4]

Yes. I do disagree. You both feel that current partners don't know how to deal with a changing landscape or how to compete. They have been competing and winning for decades. They may take a while to figure out how to deal with a new business model, but I would never for a minute think they can't get there. Don't underestimate how good they are at what they do.

a statement that could apply to any industry pre-shake up, such as in the last decade newspaper, books, music, soon TV, currently law... and in decades past (accounting/consulting/cars/corporate america). they've been winning in the past so they will win in the future!

the point is, a new business model will emerge. new business models are disruptive to existing businesses. many firms don't have the ability to fundamentally alter their structure, even if they wanted to or had a concrete goal. as a group lawyers are not competent when it comes to business. the point is that currently a ton of value is being lost due to the flaws in the biglaw model. if lawyers were as great at competing and "winning" as you say, the current changes being dictated by market forces would've been made aggressively long ago, and the industry wouldn't be playing catch-up right now... fundamentally the driving force between every decision biglaw firms make is "what are other firms doing." when hundreds of entities in an industry have no goal but to stick with the pack and no history of innovation (how long ago was the "Cravath" model invented?), why do you think they will suddenly take advantage of changing market conditions? more likely that innovators will come from outside the current model and completely disrupt the industry.

[guano]

I think people underestimate how much Dodd-Frank's gonna fuck big finance which of course will fuck law. Compliance jerbs will boom for a few years but whatever.

Hard to see how this is anything more than marginal. Dodd-Frank is not going to shrink the size of the financial sector. It's just going to move certain activities from banks to other financial institutions and maybe restrict the profitability of banks. Any effect this has on big law will likely be offset by the increase in compliance work. Stuff like mergers and litigation that is at the heart of the big law model won't be materially affected.

Dodd-Frank won't fuck finance, though it may fuck banks who can't adjust to the change. But it is most definitely a boon for lawyers, not just because of increased regulatory work, but also by driving up the complexity of structuring, to get around Dodd-Frank

Take the tax code as an example. The more complex it gets, the greater the need for tax attorneys

[manofjustice]

No one has ever explained why "things have fundamentally changed" so drastically. All we have heard is "clients are unwilling to pay" and "technology." Well, technology, okay. So there is less doc review work. Let's just leave that aside for a moment.

What about "Clients are unwilling to pay?" That strikes me as kind of dumb. Clients want to pay less. Who knew? They can get away with it when the firms are scared that if clients don't pay something, they are going to go out of business. But clients can ride that train only for so long. Firms become unwilling to hire. Firms get rid of partners. Profits go up. Clients want the same amount of work done, or more. Firms aren't so worried about going out of business anymore. Firms say "this is our rate." Clients pay.

Oh, but the firms compete now. They weren't before? How did clients wind up paying so much in the first place? Was it magic? They decided to pay that much in the first place.

Since when did we wake up in a brave, new, interminable world in which clients just tell law firms how much they're going to pay and law firms just say "okay" and still churn-out top quality work?

The article hinted at some explanation: well, only the richest clients will need top quality work because they have the most money at stake in their legal concerns. SO Legal work is just going to suffer across the board, except for the matters involving the most money, and only the firms with the richest clients will get paid for top quality work. Everyone else will get paid less and do lower quality work.

Really? Doesn't that strike you as dumb? Clients previously were just overpaying on legal services to get their jollies off? Smaller clients don't want good legal work? District court judges don't need good arguments anymore? It's not connecting with me.

[manofjustice]

Not to mention, the byline of this article is something like "you cannot imagine the terror when the money dries up." But if I'm not mistaken, 2012 was a new record year for total revenue in the Am Law 100. Most of this article seems to be about 2009 and 2010.

[guano]

No one has ever explained why "things have fundamentally changed" so drastically. All we have heard is "clients are unwilling to pay" and "technology." Well, technology, okay. So there is less doc review work. Let's just leave that aside for a moment.

What about "Clients are unwilling to pay?" That strikes me as kind of dumb. Clients want to pay less. Who knew? They can get away with it when the firms are scared that if clients don't pay something, they are going to go out of business. But clients can ride that train only for so long. Firms become unwilling to hire. Firms get rid of partners. Profits go up. Clients want the same amount of work done, or more. Firms aren't so worried about going out of business anymore. Firms say "this is our rate." Clients pay.

Oh, but the firms compete now. They weren't before? How did clients wind up paying so much in the first place? Was it magic? They decided to pay that much in the first place.

Since when did we wake up in a brave, new, interminable world in which clients just tell law firms how much they're going to pay and law firms just say "okay" and still churn-out top quality work?

The article hinted at some explanation: well, only the richest clients will need top quality work because they have the most money at stake in their legal concerns. So legal work is just going to suffer across the board, except for the matters involving the most money, and only the firms with the richest clients will get paid for top quality work. Everyone else will get paid less and do lower quality work.

Really? Doesn't that strike you as dumb? Clients previously were just overpaying on legal services to get their jollies off? Smaller clients don't want good legal work? District court judges don't need good arguments anymore? It's not connecting with me.

I almost agree. Except that it is actually true that those without deep pockets do not get the same quality end product - which has always been the case.
When money is plentiful clients don't pay as close attention, but in lean times everyone like to see where they can tighten up. In a few years, during the next boom, expenses will get out if hands again, and during the next downturn, cost-cutting will again be the order of the day. The only thing that might be different is the severity and the timing, everything else will come to pass

[bdubs]

No one has ever explained why "things have fundamentally changed" so drastically. All we have heard is "clients are unwilling to pay" and "technology." Well, technology, okay. So there is less doc review work. Let's just leave that aside for a moment.

What about "Clients are unwilling to pay?" That strikes me as kind of dumb. Clients want to pay less. Who knew? They can get away with it when the firms are scared that if clients don't pay something, they are going to go out of business. But clients can ride that train only for so long. Firms become unwilling to hire. Firms get rid of partners. Profits go up. Clients want the same amount of work done, or more. Firms aren't so worried about going out of business anymore. Firms say "this is our rate." Clients pay.

Oh, but the firms compete now. They weren't before? How did clients wind up paying so much in the first place? Was it magic? They decided to pay that much in the first place.

Since when did we wake up in a brave, new, interminable world in which clients just tell law firms how much they're going to pay and law firms just say "okay" and still churn-out top quality work?

The article hinted at some explanation: well, only the richest clients will need top quality work because they have the most money at stake in their legal concerns. So legal work is just going to suffer across the board, except for the matters involving the most money, and only the firms with the richest clients will get paid for top quality work. Everyone else will get paid less and do lower quality work.

Really? Doesn't that strike you as dumb? Clients previously were just overpaying on legal services to get their jollies off? Smaller clients don't want good legal work? District court judges don't need good arguments anymore? It's not connecting with me.

I almost agree. Except that it is actually true that those without deep pockets do not get the same quality end product - which has always been the case.
When money is plentiful clients don't pay as close attention, but in lean times everyone like to see where they can tighten up. In a few years, during the next boom, expenses will get out if hands again, and during the next downturn, cost-cutting will again be the order of the day. The only thing that might be different is the severity and the timing, everything else will come to pass

One of the few times I will agree with MoJ. It's a series of unsupported arguments.

I do think there are some explanations. I think one of the reasons that there was such a big shift between 2008 and today is that the run up that preceded 2008 was built largely on the backs of innovations in finance that were heavily dependent on legal services. Structured finance deals, derivatives contracts, and other things employed legion young associates and lined the pockets of partners for a decade or more. The pace of innovation in finance is slowing and the profit margins on some of the previously lucrative legal work are coming more into line with its now routine nature. It's true that many of the top banks still pay top rates for big $ transactions, but there was a bit of a trickle down effect before that allowed more of this work to go to mid-tier law firms because the top end firms didn't expand exponentially to meet the whole demand (foreseeing that something like this would happen and work would slow). Now those firms are taking all of the work they can get at their bill rates because there isn't enough of it (see Weil).

The next set of innovative companies and products or services may not be in such a legally dependent field. Tech uses legal services but not in nearly the same degree as finance (save a few silly companies that engage in patent wars). It's quite possible for the economy to pick up and legal services not to expand to anywhere near the same degree that they were in 2008. That's not such a major shift as the article makes it out to be, but it's still going to have consequences.

[nyf]

No one has ever explained why "things have fundamentally changed" so drastically. All we have heard is "clients are unwilling to pay" and "technology." Well, technology, okay. So there is less doc review work. Let's just leave that aside for a moment.

What about "Clients are unwilling to pay?" That strikes me as kind of dumb. Clients want to pay less. Who knew? They can get away with it when the firms are scared that if clients don't pay something, they are going to go out of business. But clients can ride that train only for so long. Firms become unwilling to hire. Firms get rid of partners. Profits go up. Clients want the same amount of work done, or more. Firms aren't so worried about going out of business anymore. Firms say "this is our rate." Clients pay.

Oh, but the firms compete now. They weren't before? How did clients wind up paying so much in the first place? Was it magic? They decided to pay that much in the first place.

Since when did we wake up in a brave, new, interminable world in which clients just tell law firms how much they're going to pay and law firms just say "okay" and still churn-out top quality work?

The article hinted at some explanation: well, only the richest clients will need top quality work because they have the most money at stake in their legal concerns. So legal work is just going to suffer across the board, except for the matters involving the most money, and only the firms with the richest clients will get paid for top quality work. Everyone else will get paid less and do lower quality work.

Really? Doesn't that strike you as dumb? Clients previously were just overpaying on legal services to get their jollies off? Smaller clients don't want good legal work? District court judges don't need good arguments anymore? It's not connecting with me.

I almost agree. Except that it is actually true that those without deep pockets do not get the same quality end product - which has always been the case.
When money is plentiful clients don't pay as close attention, but in lean times everyone like to see where they can tighten up. In a few years, during the next boom, expenses will get out if hands again, and during the next downturn, cost-cutting will again be the order of the day. The only thing that might be different is the severity and the timing, everything else will come to pass

One of the few times I will agree with MoJ. It's a series of unsupported arguments.

I do think there are some explanations. I think one of the reasons that there was such a big shift between 2008 and today is that the run up that preceded 2008 was built largely on the backs of innovations in finance that were heavily dependent on legal services. Structured finance deals, derivatives contracts, and other things employed legion young associates and lined the pockets of partners for a decade or more. The pace of innovation in finance is slowing and the profit margins on some of the previously lucrative legal work are coming more into line with its now routine nature. It's true that many of the top banks still pay top rates for big $ transactions, but there was a bit of a trickle down effect before that allowed more of this work to go to mid-tier law firms because the top end firms didn't expand exponentially to meet the whole demand (foreseeing that something like this would happen and work would slow). Now those firms are taking all of the work they can get at their bill rates because there isn't enough of it (see Weil).

The next set of innovative companies and products or services may not be in such a legally dependent field. Tech uses legal services but not in nearly the same degree as finance (save a few silly companies that engage in patent wars). It's quite possible for the economy to pick up and legal services not to expand to anywhere near the same degree that they were in 2008. That's not such a major shift as the article makes it out to be, but it's still going to have consequences.

If you think that the financial industry is going to retreat in the face of a law as weak as Dodd-Frank...that they will say, "okay we give up! no new products! no new ways to sap money out of every willing idiot" then you have a very different view of the industry than most. As we speak, the industry is fighting with all its might to prevent the law from having its full effect. Whether that's a good thing or a bad thing is a different matter. There is a reason that financial industry booms/busts affect every other industry and cause such severe recessions. Whatever the next wave of innovation is - it will need finance in a big big way. And either way, I highly doubt finance is going to give up its top spot easily. They are the ones with the money, after all. Also, the US happens to have a financial industry that services the rest of the world. As the RoW grows, the US financial industry will at least TRY to expand with it.

[bdubs]

One of the few times I will agree with MoJ. It's a series of unsupported arguments.

I do think there are some explanations. I think one of the reasons that there was such a big shift between 2008 and today is that the run up that preceded 2008 was built largely on the backs of innovations in finance that were heavily dependent on legal services. Structured finance deals, derivatives contracts, and other things employed legion young associates and lined the pockets of partners for a decade or more. The pace of innovation in finance is slowing and the profit margins on some of the previously lucrative legal work are coming more into line with its now routine nature. It's true that many of the top banks still pay top rates for big $ transactions, but there was a bit of a trickle down effect before that allowed more of this work to go to mid-tier law firms because the top end firms didn't expand exponentially to meet the whole demand (foreseeing that something like this would happen and work would slow). Now those firms are taking all of the work they can get at their bill rates because there isn't enough of it (see Weil).

The next set of innovative companies and products or services may not be in such a legally dependent field. Tech uses legal services but not in nearly the same degree as finance (save a few silly companies that engage in patent wars). It's quite possible for the economy to pick up and legal services not to expand to anywhere near the same degree that they were in 2008. That's not such a major shift as the article makes it out to be, but it's still going to have consequences.

If you think that the financial industry is going to retreat in the face of a law as weak as Dodd-Frank...that they will say, "okay we give up! no new products! no new ways to sap money out of every willing idiot" then you have a very different view of the industry than most. As we speak, the industry is fighting with all its might to prevent the law from having its full effect. Whether that's a good thing or a bad thing is a different matter. There is a reason that financial industry booms/busts affect every other industry and cause such severe recessions. Whatever the next wave of innovation is - it will need finance in a big big way. And either way, I highly doubt finance is going to give up its top spot easily. They are the ones with the money, after all. Also, the US happens to have a financial industry that services the rest of the world. As the RoW grows, the US financial industry will at least TRY to expand with it.

Never attributed the slowdown in high end finance to Dodd-Frank. I think it has more to do with decreased acceptance of "exotics" and things that are generally complicated enough to warrant high bill rates. A lot of bank clients got burned by things they didn't understand in the crisis. Overall deal volume is also low which is probably more cyclical than permanent, but it compounds the problems caused by the shift to more traditional vehicles. No doubt that an expansion will drive demand for M&A and capital markets, but will it really bring back the CDO boom of the bubble? I think not.

[guano]

Never attributed the slowdown in high end finance to Dodd-Frank. I think it has more to do with decreased acceptance of "exotics" and things that are generally complicated enough to warrant high bill rates. A lot of bank clients got burned by things they didn't understand in the crisis. Overall deal volume is also low which is probably more cyclical than permanent, but it compounds the problems caused by the shift to more traditional vehicles. No doubt that an expansion will drive demand for M&A and capital markets, but will it really bring back the CDO boom of the bubble? I think not.

Keep in mind that a lot of "exotics" do not work in the current financial environment.
Add the increased cost of hedges (credit default swaps, interest caps, etc.) to the decreased profitability of a low interest rate environment, and a lot of ideas are off the table. And technological advances have virtually eliminated eg arbitration

[thefuturenow]

I, for one, would feel safer landing an offer from the likes of DPW or STB versus Mayer Brown or Paul Hastings.

I figure the firms "who have so many billions of dollars riding on their legal work that they can truly spend without limit" includes the likes of:

Wachtell
Sullivan & Cromwell
Davis Polk
Cravath
Skadden
Simpson Thacher
Williams & Connolly
Quinn Emanuel
Paul Weiss
Cleary Gottlieb


....I wonder who else I am missing.

Lathamed.