And so, another biglaw firm — this time, 150 year-old New York based Thacher, Profitt — comes tumbling down. But though the names may change (think Heller, Ehrman, Thelen and Brobeck.com) the circumstances are virtually identical:
Step 1: Each firm suffers some kind of economic crisis.
Step 3: Remaining partners can’t figure out how to reorganize so they pursue mergers with other firms which not surprisingly, have no interest in assuming liability for another firm’s economic woes;
Step 4: Merger talks break down, and more partners jump ship; while other firms (including those that those that spurned a formal merger or previously dumped their own unprofitable practice groups) cherry pick the lucrative remains while leaving the rest of the lawyers and staff to fend for themselves.
To a solo like me, this kind of behavior is incomprehensible on so many levels. For starters, I thought that law firm partners were owners. If that’s the case, why don’t they behave that way? My firm has gone through rough times where I’ve thought about throwing in the towel. But I’ve got too much of myself invested in this venture, and too much I still want to accomplish to ever abandon my firm in a heartbeat. Plus, figuring out new ways to solve old problems like clients who don’t pay or clients who jilt me after their first influx of venture capital is one of the most exciting and challenging aspects of running a firm. And I’m not unique either; my fellow solo and small firm colleagues share this same drive to constantly improve and innovate.
Second, no offense, but engaging in merger talks when your firm is floundering seems kind of silly. I’m assuming that any firm looking to merge will engage in due diligence, which means that the failing firm will be forced to divulge its secrets, such as which practice areas are profitable and which aren’t. Once the acquiring firm learns where the sweet spots are, it has no incentive to acquire the whole firm and will instead, take on only the most lucrative parts. In contrast to conventional business, where parties negotiating a merger could implement some kind of non-compete to prevent cherry picking, ethics rules don’t allow firms to restrict lawyers from moving to other firms and taking clients with them.
Finally, after going through the demise of one firm, why do lawyers reflexively jump to another firm and take the risk that the same thing will happen again, instead of striking out on their own? I believe that In spite of all that’s happened this past year, many lawyers still foolishly believe that law firms offer security, a hedge in bad times. But it’s false security. As I’ve written before, law firms’ diversity is illusory: sure, they offer different practice areas, but success depends on clients’ ability to pay high fees. So when the economy tanks, the whole firm goes down as well.
True, solo practice offers no security. But the security that biglaw offers is false, and that’s far worse than no security at all. False security lulls lawyers into inaction, makes them believe that someone will take care of them in tough times instead of gearing up to take care of themselves.
If you are a large firm attorney – either a partner or an associate – I urge you to consider starting your own firm, now. In fact, I feel so strongly, that I’d like to offer a special end of the year teleseminar/webinar on DECEMBER 30, noon EST on starting your own firm. I know that many of you at large firms believe that solo practice means handling estates, family law or consumer cases and that is certainly an exciting option. But you can also take your existing biglaw style practice to your own firm. My own practice specialty is energy regulatory work, a traditionally “large firm style” practice area and I’ve worked at large firms (though it’s been a long time ago now), so I am familiar with your the fears and concerns of those considering a move from “biglaw to yourlaw.” At the same time, because of my background, I’m also familiar with the unique advantages that a large firm attorney can bring to your own practice.
Why do I want to do this? Because I am frustrated at seeing large firm lawyers make the same mistakes again and again. Moreover, I don’t want to see the legal profession lose talent. I would hate to have so many lawyers who sought a career in law give it up because they just don’t know what the alternatives are. Trust me, I’m not going to talk you into starting a firm or try to sell you anything. I just want to share some information and assure you that it can be done if you decide to do it. If you don’t want to call in, consider reading a copy of my book, Solo by Choice (click on sidebar) – you can either order it from Amazon or find it in a local law libraries.
If you register below, you’ll receive the information for a dial-in or log-in number on December 29, 2008. Please feel free to email me at email@example.com with any questions.