The Relational Infrastructure of Law Firm Culture and Regulation: The Exaggerated Death of Big Law

Abstract

The Article debunks the highly publicized claim, within the academy and the legal profession, that the demise of Big Law is imminent. Critics have argued that large law firms face a near perfect storm that imperils their future. They argue that increasing sophistication and influence of in-house legal departments, and the exponential leap in legal technology, undermine large law firms’ claims to expertise, market power, and profitability. At the same time, they argue, the internal weakness of large firms makes them less likely to perform the very tasks essential to sustaining large law firms' reputational capital because the traditional partnership tournament has collapsed in the face “eat-what-you-kill” compensation, significant lateral partnership movement, and the creation of non-equity positions. These developments arguably reduce the incentives of partners to serve their firms loyally and build them as institutions through organizational tasks that do not translate into immediate financial reward, including mentoring young lawyers, controlling quality, and promoting diversity.

By focusing on big firm lawyers as autonomous individuals, and not on big firm lawyers as participants in relationships as members of organizations and networks, the critics make significant analytic mistakes. The actual empirical evidence supports the view that the elite market for legal services is dynamic and that while it is evolving, as it always has, many large firms have made changes that enable them to continue to prosper. For example, the significant power shift from outside counsel to their clients has often resulted in healthy, long-term, and mutually beneficial business relationships similar to those corporate clients have with other long-term suppliers. Similarly, Big Law has been proactive in replacing its dependency on high volume paperwork with highly specialized legal services as it embraces cutting edge technological changes, as well as by offering new and competitive fee arrangements. And changes in the partnership tournament have not reduced Big Law’s reputational capital and its leadership in providing outstanding legal services to clients.

Even where critics properly identify weaknesses, such as in management, training and diversity, they call for reforms, such as ethics rules to restrict lateral movement, that mistakenly rely on the false conception that big firm lawyers are atomistic individuals. Rather, as we suggest, law firms would better address these weaknesses by embracing the understanding that lawyers work with each other and clients through relationships that firms could strengthen and thereby improve both their economic health and their commitment to professional values. The Article offers a blueprint for relational infrastructure that includes policies applicable to training and mentoring, diversity and professionalism.