Big-firm Partners Go Small

It is not just the layoffs at big law firms.  Law.com points to a trend of big-firm partners leaving the mother ship for small firm practices so they can hold on to clients and attract others with more competitive pricing.

As the article notes:

Partners at big law firms eager to hang on to cash-strapped clients and attract more amid this year's corporate belt-tightening are jumping to smaller firms where they can lower their billing rates and bump into fewer conflicts of interest.  Partners from DLA Piper; K&L Gates; Katten Muchin Rosenman; and Jenner & Block are among those who have made moves during the past four months to smaller firms that allowed them not only to protect their client bases, but also to win new business on lower rates.

For the full article:  Big-firm Partners Go Small.

This makes sense - if a firm is paying first associates $160,000 a year, that's just the tip of the iceberg of the overhead burden.  Getting rid of that overhead opens a world of possibilities for a partner who controls a significant piece of business.  They can keep their client happy by cutting costs yet, potentially, be more profitable by unburdening themselves of needless overhead (and as an added bonus, can likely put their name on the firm!).

This sounds a bit like the "Expertopia" scenario that Ward Bower spoke about as one competing vision for the future of the legal profession where experts will not stay with mega firms but become their own boutiques and control a significant portion of the high value legal business, similar to the medical profession where top doctors are out-earning the football coaches and presidents of their University homes.

The economy is causing a lot of folks to rethink a lot of their assumptions.  It makes sense that the legal community would start rethinking theirs and, at least for some, the conclusion is that small is better.

- Peter H. Berge

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