For years, analysts have predicted the imminent death of “Big Law,” the powerhouse law firms staffed by hundreds of attorneys that sit atop the legal food chain. But Big Law has turned into Big Business, with record growth and record profits, and Big Law firms will likely continue to grow.
While no one can know the future of Big Law, trendlines suggest what’s in store for the next five to 10 years and beyond. Here is how experts expect Big Law to change in the near future.
[Related:What Is ‘Big Law?’]
Big Growth, Big Money and Big Volatility
With Big Law’s skyrocketing revenue and record profits for partners, there’s never been a better time to be an equity partner in a Big Law firm, says Eli Wald, Charles W. Delaney Jr. professor of law at the University of Denver Sturm College of Law.
Although the last two years have been less profitable, firms still rake in record-breaking receipts compared to the past.
But the best of the times bring the worst of times, and instability and volatility also plague Big Law. Every once in a while, a firm fails, which was previously unheard of, Wald says.
Even the nation’s largest firms can go under. In October 2023, the 147-year-old firm Stroock & Stroock & Lavan — which in 2022 had 222 attorneys and revenue of $250 million — announced it would soon close.
When It’s a Bet-the-Company Case, Companies Choose the Biggest of Big Law
Big Law firms excel at defining their brands, and that has a lot of power, says Kimberly Leach Johnson, partner and chair emeritus of Quarles & Brady, one of the nation’s largest law firms.
When cases are at the bet-the-company level, meaning the company’s future may ride on the results, companies want the top 10 or so firms. Hiring these very largest firms reassures an anxious board of directors, Johnson says.
“The top 15 seem like they have such a strong footprint, it’s hard for me to envision that they won’t be there in 15 years,” she says.
[Related:Top Marketing Strategies for Law Firms]
Big Law Is Not a Monolith, So Big Law Firms Don’t Act in Lockstep
Big Law is no longer the Manhattan-based monolith it once was. For example, several Big Law firms began as regional firms that grew over decades, while others have become major players within the past five years, Wald says.
Quarles ranks No. 112 in the nation in terms of size with 520 attorneys, but it remains U.S.-located and is built on a strong tradition of family-owned business firms. By contrast, a number of top 10 firms have thousands of attorneys in offices spread out around the globe. Compared to them, “It’s a different world,” Johnson says.
The huge spread between the nation’s largest firms means their fates aren’t as interconnected as in the past. And continued success will depend as much on what sets them apart from the field as what makes them a part of Big Law.
This past year, several Big Law firms announced layoffs or delays in hiring first-year associates. But in November, two law firms — Milbank and Cravath Swaine & Moore — increased first years’ salaries to $225,000 a year.
A dozen near-competitors quickly followed suit, but as many as half of the nation’s largest firms won’t see the need to, Wald says.
AI Will Impact, But Not End, Big Law
When identifying the challenges that Big Law must take on, artificial intelligence “is not on my list. I think it’s a red herring and a distraction,” Wald says.
It is a disruptive technology likely to be adopted into firms’ work, but whether it will have a significant impact on firms’ structure is a big maybe, he says.
Historically, even when new technology has taken away aspects of the legal business, it created something else equally unexpected, Johnson says, concurring with Wald’s assessment.
For example, in the past, a lawsuit might have required reviewing dozens of boxes of documents. Now, with email and other digital work, cases can require analyzing millions of documents.
Growth Will Get Tougher as Firms Poach Talent
Stroock’s decline began when 43 of its lawyers left for another firm, which led to subsequent departures, each gutting its services.
That hits home for the firms ranked from 101 to 200 among the nation’s largest firms, whose recent success has made them more vulnerable to poaching from large and small firms alike.
Larger firms try to take other firms’ whole practices away. At the same time, the midsize and boutique firms swim upstream by nabbing their attorneys and books of business, Johnson says.
Big Law’s Biggest Obstacle to Longevity: Culture
Big Law’s biggest challenge going forward is firm culture, according to Wald.
While Big Law firms are no longer the sweatshops they once were, pressure to produce billable hours continues unabated. That leads to Big Law’s other chief concerns: hiring junior attorneys and keeping seasoned attorneys.
Millennial and Gen Z attorneys want more work-life balance, Johnson says.
This isn’t only a generational issue: Big Law hires more women as entry-level associates, but women leave Big Law at much higher rates than men do. Partner rosters are disproportionately white and male. Only 17% of Big Law managing partners and co-managing partners are female, according to a report from Leopard Solutions, a legal intelligence provider.
It’s not that current partners have done anything wrong or should feel bad about their success, Wald says.
But the firms hemorrhage talent. And they lose attorneys just when they’ve gained enough experience that they should be the most productive and valuable to the firms, he says.
Something needs to be done. Yet with firms making more money than ever before, and partners busy with their careers, there’s little impetus for reform, Wald says.
Even when individual partners recognize the need for change, they struggle with how to meet both their clients’ and their attorneys’ needs. So clients win. No one has figured out how to resolve that, Johnson says.
[Related:How Law Firms Can Create Positive Workplace Culture]
Clients Will Decide the Future of Big Law
Doomsayers once predicted the death of Big Law because they believed in-house counsel would increasingly handle corporations’ legal work. Instead, general counsel — frequently Big Law alumni — turn to their old firms to handle complex matters.
Many left Big Law because of the demands of a 24/7 service industry. But as clients, they often expect that same constant level of service — even though not every assignment warrants it.
Since general counsels are so vital in the financial well-being of Big Law, perhaps their next step can be to improve the well-being of its lawyers.
More from U.S. News
How to Recruit Exceptional Lawyers at Your Law Firm
What to Know About Diversity and Inclusion at Law Firms
What Is the Future of Big Law? originally appeared on usnews.com
