The term BigLaw has been around in the US for a while but in recent years this catch-all tag for corporate lawyering in the world’s biggest law market has taken on a decidedly pejorative tone. From the pages of The New York Times and The Wall Street Journal to prominent blogs and comments by industry observers, a popular view has taken hold to the effect that the US legal industry – in particular in New York – is a fundamentally broken model in a profession facing terminal decline.
Ultimately, this prognosis of doom remains unsatisfying for two reasons. Firstly, some of this analysis is based on attempts to bolt on the narrative of the supposedly humbled Wall Street banks on to Wall Street law firms. For all the parallels between banks and law firms, as much divides as unites them. Law still doesn’t attract risk-takers; law firms don’t need anything like the capital of modern investment banks and they have little ability to create the short-term illusion of profitability that played havoc in the securities industry post-2007.
The second factor is more straightforward: the end of BigLaw is shot through with Schadenfreude, usually a good indicator of wishful thinking on the part of journalists, general counsel, managing partners in London and consultants.
Is that to argue everything is rosy in the world’s legal capital? No. As addressed in this month’s cover feature on New York, the long-term trends are clear. New York remains a singularly clubby, impenetrable market to crack – but slowly, slowly it is cracking. Not certainly to the firms in the Magic Circle – who should have updated their lockstep models years ago to encompass a New York/London duopoly. But a widening band of expansive out-of-town US players are carving out credible positions; as the US legal market steadily nationalises, the grip of the traditional New York players loosens a little. On current trends, you could charitably say that maybe ten New York firms are on rough course to be global players by 2025. Given the historic strength and advantages of being based in New York and the unsurpassed quality and drive of the city’s lawyers, that group should, on paper, be much, much larger. How will most New York firms adapt to the age of the $5bn law firm? Because that time is surely at most only 20 years away.
This squandering of New York law’s killer apps betrays some genuine shortcomings. At too many firms, there has been a lack of long-term thinking, an excessive conservatism and an effective veto on strategy given to Manhattan rainmakers that too often confuses their personal interests with the wider, long-term needs of their firm. And even accepting that this is an industry of rugged individualism, there is surely a limit to how far the cult of the star partner can be productively pushed.
Many of these are globally-observable trends in the legal profession, or in part baked into the partnership model. The difference in New York is that there is a general lack of countervailing measures to address these weaknesses. The problem may be, in the end, that New York firms just aren’t BigLaw enough.
For detailed analysis of the Wall Street legal market see February’s cover feature Taking Manhattan – can the Wall Street elite hold out in the age of the $5bn law firm?