Seems that every day, biglaw just keeps getting bigger. And indeed, that may be the only solution if firms are to continue to sustain what Professor Bill Henderson refers to as Cravath Model, whereby firms pay top dollar for top lawyers (or more accurately, what they define as top lawyers, meaning GPA, law review and clerkship). But will consolidation squeeze out solo and small firms who compete in the same domain? Not necessarily, says Professor Jeff Lipshaw at the Legal Profession Blog. Drawing on the banking industry model, Lipshaw observes that there’s always room for quality work and excellent service in local markets:
But what happened with all the banks turning into Citis or Chases or Keys or National Citys is that market opportunities sprang up for local service oriented banks. The “private bank” phenomenon is a response to that. I used to listen to radio ads for a locally-owned bank in the Detroit area, Franklin Bank, that made this the focal point of its value proposition. (I’m hearing something similar this summer here in northern Michigan from local pharmacies, particularly those that do compounding, as a reaction to the CVS-Walgreen’s-Rite Aid-Walmart consolidation.)
As smart and ambitious lawyers get tired of the bureaucracy of the mega-firms (and more importantly, like David Boies, having fruitful and remunerative new business killed by a conflict!), my prediction is we will see a cycle of boutique firms that return to something like the market distinction of the late 1970s. I can reveal here a not-very-hidden secret: GCs of big companies know that much of what they purchase in legal services is fungible, and they can get quality work in Albuquerque or Nashville or Birmingham, Alabama or Jackson, Mississippi.
And of course, don’t forget that technology is an added catalyst that makes it easier than ever for lawyers to start sophisticated boutique practices and market them nationally.