When large law firms fail, we need to re-examine the business model
Dewey & Lebouef seemingly teetering on the brink of failure, and suggests that these events highlight the larger question of the viability of the biglaw model.
The article traces the emergence of the biglaw business model, which developed around the huge profits on Wall Street during the early and mid part of the aughts, and observes that firms have been unable change in response to the post-financial crisis reality as a result of a aggressive expansion, numerous mergers, and a failure to move beyond an outdated leadership model toward a more sophisticated mode of strategic guidance.
The changes wrought by the recession seem to have lasting implications, with clients no longer willing to spend so much money on lawyers, and forcing the issue via outsourcing, contract attorneys, the expansion of in-house teams, and a push toward generally better efficiency. Firms responded first by conducting mass layoffs, and then by trying to fatten their client lists with lateral hires, but neither is a real solution to the problem.