I hesitated before writing this post for fear of unnecessarily adding to the echo chamber that has resulted from Noam Scheiber’s unflattering portrait of Mayer Brown in The New Republic. But I decided to go ahead because of the value of sharing the candid and telling reactions that I have heard from leaders of many other law firms.
Almost every law firm leader who I have heard from since the piece was released earlier this week – from New York to Washington, Chicago to San Francisco, Sydney to Toronto – has told me that he feels badly for Mayer Brown. I agree. The New Republic article, or a variation of it, could have been written about many, many law firms. The chair of one Am Law 50 firm said it most bluntly: “That could have been written about us.” As one of my partners put it, Mayer Brown was walking down the street and got hit by a stray bullet. However, most law firm leaders also agree that the piece shines a light on many of Big Law’s ills.
Beyond the portrait of Mayer Brown, the article includes an aggressive prediction: only a fraction of Big Law will survive. I don’t know many people who would bet on that. In fact, even the author, in an on-camera conversation released earlier today with Bloomberg Law’s Lee Pacchia, admits: “If I could write the piece over again I would hedge on the prediction.” Rumors of the demise of Big Law are greatly exaggerated, to paraphrase The American Lawyer Editor in Chief Robin Sparkman, who does an excellent job of backing up that sentiment with a confidence-inspiring summary of recent Am Law 100 financial performance data in “Don’t Bury Big Law Just Yet.”
However, without question, there is a shakeout going on in the industry. That shakeout is evidenced by a number of accelerating trends, including the following two.
1. The pace of law firm failures almost doubled in the last five years compared to the period 1987 to 2007.
2. The number of law firm mergers and other combinations is on track to reach an all-time high this year.
While merging for the sake of merging makes little sense, and some firms combine out of necessity, strong firms are also combining and aspire to combine. Why? In order to fast forward their strategies to:
• Grow breadth and depth as a way to build go-to status for highly sought-after work and talent;
• Differentiate, by doubling down on strengths, to become known as the best, or among the best, in core areas of focus; and
• Have more money to grow brand strength and attract laterals with sizable and profitable books of business.
The end result is that there is a race for size among many firms. Local firms are increasingly becoming regional, regional are increasingly becoming national, national are increasingly becoming international, and international are becoming global. The result is not the demise of Big Law, but for many firms, it is the achievement of their aspirations.