Altman Weil, a leading legal consulting firm, has just published this year’s “Law Firms in Transition Survey,” its eighth such survey since it started gathering data from law firms large and small. For those considering becoming a lawyer and for those who are already in private practice, its results are sobering. Experienced lawyers will likely not find its conclusions revelatory. Those disenchanted with the state of our discipline will find sufficient support for the proposition that we have evolved (or devolved, depending on one’s point of view) from a profession to a business. And, as a business, there is ample evidence to be anxious about its future.
The designers of the survey made a serious attempt to arrive at valid conclusions. Managing partners and chairs at 798 U.S. law firms with 50 or more lawyers were contacted; 386 firms (48 percent) including 50 percent of the 350 largest U.S. law firms and 50 percent of the AmLaw 200 participated.
One subheading dramatically concludes that there exists an “Oversupply of Lawyers; Decreasing Demand for [Legal] Services.” Ominously, the survey states, “Decreasing demand for legal services is endemic in the profession.” The majority of responding firms report that neither equity partners nor nonequity partners are sufficiently busy. In 25 percent of the firms, associates don’t have full workloads. Too many lawyers are chasing too few clients.
That the business of lawyering would be in distress in these times of relative economic plenty was reasonably to have been foreseen. Our business clients understand that to survive in the marketplace, they must squeeze every bit of cost-saving from producing and delivering their goods or services at a competitive price. The best of these clients run lean. Most law firms do not.
While, the survey points out that 94 percent of responding firms report that they intend to focus on practice efficiency, 49 percent report they have not significantly changed their approach to their delivery of legal services. We speculate that lawyer inertia—resistance to change—is one cause. The survey supports that conclusion: 65 percent of law firm leaders say partners resist most change efforts, and 56 percent say most partners are unaware of what they may do differently. Lawyers are simply untrained in the discipline of growing a business. Courses on how to grow a law practice and how to manage that growth are rarely to be found on a law school’s course offerings.
Another significant contributing factor to this diminution of demand for legal services is that, in many specialties, we are unable or unwilling to provide satisfaction at a reasonable price. Bloat is part of the reason. In litigation, for example, gross inefficiencies are frozen into our Rules of Civil Procedure. There are too many requirements to generate paper or to travel to the courthouse when a mere phone call or teleconference will do. Doing it the way we have always done it has priced us out of the market. We have not had a dramatic multidisciplinary approach to overhauling the rules since 1969.
Unreasonable and unpunished contentiousness on the part of lawyers inflates the cost of litigation. Fierce competition and unreasonable expectations of what a lawyer ought to earn put pressure on partners and associates to produce billable hours. To resolve an impediment to resolution, a telephone call rather than a motion may earn a lawyer less in the short term, but will attract more clients in the long run. We are supposed to be client–centric. We were taught that putting our clients first distinguishes us from businesspersons. Too many of us have forgotten that lesson.
Although we live in an increasingly contentious world, we—as the professionals we present ourselves to be—are supposed to be more clinical in our representation. One would think that in this disruptive climate, there would be a greater, not a lesser, demand for legal services. We must innovate to bring about a quality result at a lower cost. Streamlining the processes we use to resolve disputes is one way. We can and must do much, much better.