Big Law’s Pyramid Model Is Collapsing

Essentially, big law operates on the fundamental premise of ever-increasing billable hours.  In order to support the salaries at the top, they must continually add increasing number of associates at the bottom.  Graphically, the model appears as a pyramid where each year a new base is added which includes more associates than the year before.

As the vast majority of big law suffers under this tough economic environment, the pyramid model is suffering.  Not only are they failing to add increasing numbers of associates at the bottom of the pyramid, but also big law is putting on hiring freezes and terminating large numbers of lawyers and staff.

The failure of the pyramid model has a number of serious consequences.  The most serious consequences are going to be in the areas of culture and morale.  Big law attorneys suffer their business model in large part because of the big pay checks they receive.  Now that those pay checks, and the bonus plans that go with them, are under tremendous strain, many big law attorneys will begin to ask themselves whether it’s worth it.  More importantly, the culture of big law is one of ego.  New associates who spend years churning research memos and engaging in other relatively menial activity, drive their self-importance from the firm’s self-perceived reputation.  It is much tougher to strut the halls of the court house feeling like the most important person in the building because of the firm letterhead attached to your pleadings when you just laid off forty attorneys. 

As law firms start to break up, reorganize, and re-launch, you will begin to see the sort of diversity which many people, both lawyers and clients, have been waiting a long time for.  While many see hardship for lawyers over the next few years, we see opportunity.  There will never be a better opportunity to change the way law is practiced than now. 

Comments

[Dave]

The model isn't failing, there's plenty of partnership money in there. Partners are just, overall, a greedy group.

[Not Rich]

Way way overdue. Biglaw is way way too white. and old. and conservative.

[Anon]

What does this have to do with black and white? "Law firms are struggling...so we need more diversity!"

What an asinine article.

[bg]

I highly doubt the pyramid scheme is over. Biglaw is not going anywhere, this is just a temporary down-cycle and biglaw will be back bigger and better in no time.

To keep the pyramid in tact, all one must do is get rid of some at the top.

Also, the best firms still are the best, regardless of layoffs, so prestige is still preserved, and as long as salaries do not go down, then the mindless associates will keep on churning.

[Bill]

The down economy has caused problems for biglaw, therefore we need more diversity?

Um....ok. Explain how the two are related!

[Anon]

What do you mean by "diversity?"

[Tyler]

I think the commenters are jumping the gun on the author's use of the term "diversity". I think he means diversity in terms of fee structures, i.e. fee-for-service instead of hourly billing; or caps on hours for certain tasks. Just calm down folks.

[Guy]

I think he means brown people.

[Venya Taganski]

Pyramid is evil!

[GAL]

Oh hi Anon: haven't seen you in a while. Obviously, diversity has nothing to do with skin color (not sure where you could even assume this based on the article???). Diversity means what it says. Law firm models will step out of the pyramid mode and go in many different directions. Lawyers will experiment (as we have) and innovate. And yes, law firms built on pyramids will think the idea asinine, just like they view anything outside their narrow model.