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i've read and heard about the commoditization of certain practice areas at biglaw firms. can anyone extrapolate on what the problem is and what practices are/aren't implicated (perhaps within transactional practice, specifically)?

roger8219 wrote:i've read and heard about the commoditization of certain practice areas at biglaw firms. can anyone extrapolate on what the problem is and what practices are/aren't implicated (perhaps within transactional practice, specifically)?

All transactional areas are constantly being commoditized (i.e., improving efficiency). How much of commoditized work you would do as an associate depends on the firm more than the practice area. At Cravath, S&C, Wachtell, etc., you will work on deals requiring most the customization. Commoditized work is given to firms with lower rates.

roger8219 wrote:i've read and heard about the commoditization of certain practice areas at biglaw firms. can anyone extrapolate on what the problem is and what practices are/aren't implicated (perhaps within transactional practice, specifically)?

This is a great question and worth discussing.

I spent my 1L summer at one of the "mega firms" (DLA/Baker Mackenzie/etc) and my 2L summer at a v5, doing corporate work at both. There was a huge difference in the type and quality of work, and a lot of that difference can be explained by this commodification point.

The truth is, most legal work isn't that complex, especially on the corporate side, once it has been done at least once. High yield deals aren't gonna rethink the wheel each time they're done. Even more so for a typical bank revolver or an asset purchase agreement. You'll adapt a form to work with the particular situation, but the kind of creative thinking it takes to get a deal done for the first time just isn't there.

In a world where clients are cutting costs and trying to push down legal budgets, no way is a company gonna pay wachtell prices for a vanilla bank financing. It doesn't make any sense. So, firms have begun increasingly to specialize. Only a few firms (what AMLaw calls the "super rich") can continue to command insane hourly rates because there's only so much novel corporate work out there.

That being said, commoditized work can also be insanely profitable. Cahill is the perfect example. Their PPP is on par or higher that S&C, despite billing associates out at lower rates. However, since you won't be a partner (probably ever but certainly not for 10 years), this point really isn't important. What's important from the perspective of a 2L is whether you'll get to see novel deal structures or be working from a form.

There are reasons to prefer the latter. If you want to run deals as a junior/mid level, that's not gonna happen on a novel transaction structure. There's a reason K&E juniors are more likely to run deals (midmarket PE transactions) than dpw juniors (top of market ipo's). But if, as a senior or partner, you want to be in the business of pioneering novel deals, DLA (or most non-v20 firms) is not the place you'd want to be.

There's a lot to say about this and there has been good articles written about how an increasingly commoditized practice has changed law firm economics. Definitely worth exploring.

Anonymous User wrote:

roger8219 wrote:i've read and heard about the commoditization of certain practice areas at biglaw firms. can anyone extrapolate on what the problem is and what practices are/aren't implicated (perhaps within transactional practice, specifically)?

This is a great question and worth discussing.

I spent my 1L summer at one of the "mega firms" (DLA/Baker Mackenzie/etc) and my 2L summer at a v5, doing corporate work at both. There was a huge difference in the type and quality of work, and a lot of that difference can be explained by this commodification point.

The truth is, most legal work isn't that complex, especially on the corporate side, once it has been done at least once. High yield deals aren't gonna rethink the wheel each time they're done. Even more so for a typical bank revolver or an asset purchase agreement. You'll adapt a form to work with the particular situation, but the kind of creative thinking it takes to get a deal done for the first time just isn't there.

In a world where clients are cutting costs and trying to push down legal budgets, no way is a company gonna pay wachtell prices for a vanilla bank financing. It doesn't make any sense. So, firms have begun increasingly to specialize. Only a few firms (what AMLaw calls the "super rich") can continue to command insane hourly rates because there's only so much novel corporate work out there.

That being said, commoditized work can also be insanely profitable. Cahill is the perfect example. Their PPP is on par or higher that S&C, despite billing associates out at lower rates. However, since you won't be a partner (probably ever but certainly not for 10 years), this point really isn't important. What's important from the perspective of a 2L is whether you'll get to see novel deal structures or be working from a form.

There are reasons to prefer the latter. If you want to run deals as a junior/mid level, that's not gonna happen on a novel transaction structure. There's a reason K&E juniors are more likely to run deals (midmarket PE transactions) than dpw juniors (top of market ipo's). But if, as a senior or partner, you want to be in the business of pioneering novel deals, DLA (or most non-v20 firms) is not the place you'd want to be.

There's a lot to say about this and there has been good articles written about how an increasingly commoditized practice has changed law firm economics. Definitely worth exploring.

This is flatly incorrect. There might be something to say about your other stuff, but you're far more likely to start running deals at a more junior level at DPW than K&E/other cap markets firms. DPW has 2nd years running IPOs because they get so much responsibility early because deals are so leanly staffed. Even as a first year at DPW you won't be running deals per the working group list but you'll be practically running it with a senior giving high level oversight. This is why DPW cap markets can have such high attrition because other firms take a 3rd year from DPW understanding they can do the same work as a 4th/5th year work at another law firm. Not unheard of for DPW associates when they exit to be given an extra class year when lateraling either.

Anonymous User wrote:

Anonymous User wrote:

roger8219 wrote:i've read and heard about the commoditization of certain practice areas at biglaw firms. can anyone extrapolate on what the problem is and what practices are/aren't implicated (perhaps within transactional practice, specifically)?

This is a great question and worth discussing.

I spent my 1L summer at one of the "mega firms" (DLA/Baker Mackenzie/etc) and my 2L summer at a v5, doing corporate work at both. There was a huge difference in the type and quality of work, and a lot of that difference can be explained by this commodification point.

The truth is, most legal work isn't that complex, especially on the corporate side, once it has been done at least once. High yield deals aren't gonna rethink the wheel each time they're done. Even more so for a typical bank revolver or an asset purchase agreement. You'll adapt a form to work with the particular situation, but the kind of creative thinking it takes to get a deal done for the first time just isn't there.

In a world where clients are cutting costs and trying to push down legal budgets, no way is a company gonna pay wachtell prices for a vanilla bank financing. It doesn't make any sense. So, firms have begun increasingly to specialize. Only a few firms (what AMLaw calls the "super rich") can continue to command insane hourly rates because there's only so much novel corporate work out there.

That being said, commoditized work can also be insanely profitable. Cahill is the perfect example. Their PPP is on par or higher that S&C, despite billing associates out at lower rates. However, since you won't be a partner (probably ever but certainly not for 10 years), this point really isn't important. What's important from the perspective of a 2L is whether you'll get to see novel deal structures or be working from a form.

There are reasons to prefer the latter. If you want to run deals as a junior/mid level, that's not gonna happen on a novel transaction structure. There's a reason K&E juniors are more likely to run deals (midmarket PE transactions) than dpw juniors (top of market ipo's). But if, as a senior or partner, you want to be in the business of pioneering novel deals, DLA (or most non-v20 firms) is not the place you'd want to be.

There's a lot to say about this and there has been good articles written about how an increasingly commoditized practice has changed law firm economics. Definitely worth exploring.

This is flatly incorrect. There might be something to say about your other stuff, but you're far more likely to start running deals at a more junior level at DPW than K&E/other cap markets firms. DPW has 2nd years running IPOs because they get so much responsibility early because deals are so leanly staffed. Even as a first year at DPW you won't be running deals per the working group list but you'll be practically running it with a senior giving high level oversight. This is why DPW cap markets can have such high attrition because other firms take a 3rd year from DPW understanding they can do the same work as a 4th/5th year work at another law firm. Not unheard of for DPW associates when they exit to be given an extra class year when lateraling either.

Quoted anon here:

You may be right about DPW, I honestly don't know. Though 1st years running IPO's seems unlikely to me (beyond ancillary documents, schedules, etc.), but I've never done it so I won't disagree with you.

I just used that as an example -- perhaps a bad one. Look, juniors at S&C/Cravath don't run public M&A deals; juniors at Wachtell don't email GC's of Fortune 100 companies with advice on how to fight an activist. If that's the primary work that firm does -- as opposed to midmarket corp fin and M&A -- juniors are, generally speaking, less likely to run it. The point is that you can't do "novel" work without mastery of a subject area, and you won't have mastery as a junior. That being said, you may have "more responsibility" because ancillary documents on a novel deal may be more interesting that main transactions documents of a commoditized type deal.

Anonymous User wrote: Quoted anon here:

You may be right about DPW, I honestly don't know. Though 1st years running IPO's seems unlikely to me (beyond ancillary documents, schedules, etc.), but I've never done it so I won't disagree with you.

I just used that as an example -- perhaps a bad one. Look, juniors at S&C/Cravath don't run public M&A deals; juniors at Wachtell don't email GC's of Fortune 100 companies with advice on how to fight an activist. If that's the primary work that firm does -- as opposed to midmarket corp fin and M&A -- juniors are, generally speaking, less likely to run it. The point is that you can't do "novel" work without mastery of a subject area, and you won't have mastery as a junior. That being said, you may have "more responsibility" because ancillary documents on a novel deal may be more interesting that main transactions documents of a commoditized type deal.

You're just wrong again though when you say "ancillary documents on a novel deal" might be drafted by juniors but the primary work a firm does won't be done by juniors. IDK what your experience/practice area is but you can't analogize everything to M&A. M&A is flatly different than cap markets and M&A generally has huge deal teams where a junior is doing a small part of it whereas in cap markets, a junior is involved in every single e-mail basically and every single aspect of the transaction and as a first year will be drafting entire parts of the Offering Document (which is not an ancillary document).