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The Elastic Tournament: The Second Transformation of the Big Law Firm


Marc Galanter


University of Wisconsin Law School, Madison

William D. Henderson


Indiana University Maurer School of Law

2008

Stanford Law Review, Vol. 60, 2008
Indiana Legal Studies Research Paper No. 108
Univ. of Wisconsin Legal Studies Research Paper No. 1058

Abstract:     
In 1991, Galanter and Palay published 'Tournament of Lawyers: The Transformation of the Big Law Firm', which documented the regular and relentless growth of large U.S. law firms. The book advanced several structural and historical factors to explain these patterns, centering on the adoption of the promotion-to-partnership tournament. Systemic changes in the marketplace for corporate legal services in the intervening years suggest the need for an updated account of the modern large law firm.

Using 'Tournament of Lawyers' as a starting point, we propose to fill this void in the literature. Marching through a wide array of empirical evidence covering the last twenty to thirty years, our findings corroborate some of the core theoretical insights of 'Tournament of Lawyers'. For example, the continuous upward growth of the partnership based on the tournament is clearly evidenced by a 'smooth' upward trajectory in the partnership ranks while associate hiring hews more closely to the underlying business cycle. On the other hand, the widening ranks of permanent 'off track' attorneys and non-equity partners, including the prevalence of de-equitizations, suggest the emergence of a more complex and elongated tournament structure that applies to both partners and associates.

Under a new model, which we dub the 'elastic tournament,' the equity core is primarily reserved for partners who control access to key clients. This structure reduces cross-subsidies between lawyers with differential value to the firm, thus reducing the potential for large-scale lateral defections. Yet, this reduced sharing of risks and benefits simultaneously creates an environment in which it becomes more costly - at the individual lawyer level - to faithfully adhere to professional and ethics principles that are in tension with client objectives. Arguably, these dynamics have made zealous advocacy the touchstone of ethical lawyering. The diminution in sharing also reduces the time horizons of individual lawyers and decreases their willingness to invest in firmwide initiatives that do not simultaneously optimize their own practice. Amidst this widening collective action problem, the 'firm' itself has remarkably little autonomy to pursue non-economic objectives, such as racial and gender diversity (particularly efforts directed at retention) or the training and mentoring of the next generation of lawyers. Further, except in some exceptional cases, the influence of firm culture, which may have moderated lawyer self-interest in an earlier era, is weakened by the sheer size and geographic dispersion of the modern big law firm.

Although this model is fundamentally 'stable' in the economic sense, it raises several philosophical and practical issues regarding lawyer independence and the long-term viability of professional self-regulation.

Number of Pages in PDF File: 65

Keywords: Tournament, Am Law 100, Am Law 200, Law Firms, Partners, Associates, Human Capital

JEL Classification: D2, J2, J24, J3, J33, J41

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Date posted: April 16, 2008 ; Last revised: June 30, 2013

Suggested Citation

Galanter, Marc and Henderson, William D., The Elastic Tournament: The Second Transformation of the Big Law Firm (2008). Stanford Law Review, Vol. 60, 2008; Indiana Legal Studies Research Paper No. 108; Univ. of Wisconsin Legal Studies Research Paper No. 1058. Available at SSRN: http://ssrn.com/abstract=1104711

Contact Information

Marc S. Galanter
University of Wisconsin Law School, Madison ( email )
975 Bascom Mall
Madison, WI 53706
United States
608-263-2244 (Phone)
608-262-5485 (Fax)
William D. Henderson (Contact Author)
Indiana University Maurer School of Law ( email )
211 S. Indiana Avenue
Bloomington, IN 47405
United States
812-856-1788 (Phone)
812-855-0555 (Fax)
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