I think it’s time we silenced the self-anointed pundits who’ve been heralding the direction of the legal profession for so many unchallenged years.  For much of the nineties and the pre-recessionary years of this decade, I’ve listened to managing partners and management consultants talk about the inevitability of consolidation in the legal profession.  As the story went, the legal profession would bifurcate along two very clearly drawn lines:  small and mid-size firms would be absorbed (“merged” as it were) by ever larger and growing mega-firms, while at the small end of the market would remain only niche and boutique firms, focused solely on a practice or two.  The middle of the market would simply go away.  It certainly seemed that this was the true path, though it’s been largely fed by self-fulfilling prophecies.  These management consultants even thrived on M&A practices. (more…)

The current economic crisis has touched law firms more in broader terms than any other economic cycle in recent history.  In a profession noted for being largely immune to economic downtowns, it’s interesting to note that the large general practice firms, those ostensibly best positioned to weather a storm because of the diversified nature of their work portfolio, are in fact being hit the hardest.  There’s been plenty of conjecture about the impact of this recession on law firms. I’ve long posited the theory that the large rounds of layoffs earlier this year mostly piggy-backed the recessionary woes, as opposed to being directly correlated to them, and that most firms used the economy as an excuse to clean house and reduce the “bloat” of recent years. 

But there’s an interesting phenomenon taking shape under our noses.  Corporations are now poised to drive the most fundamental shift in the nature of legal practice ever.  Corporate clients are demanding changes to the “social contract” that exists between legal service providers and their consumers, in ways that attack the cornerstones of the legal profession – the focus on billable hours, the “apprenticeship” model that drives the leverage and “on the job learning” model s in all law firms, and  open-ended, run-away nature of legal services.

Lawyers are now being forced to think about business models. True change indeed.