According to Above the Law, being a Biglaw partner no longer has the safety net it once provided. Customarily, partnership is recognized as the final destination where the hard work finally pays off, but a new trend amongst big law firms proves that this may no longer be the case. The legal market is once again evolving.
In a survey by legal trade publication the American Lawyer, 56% of large law firms said they planned to take away equity from partners in the coming year, and 67% planned to fire partners altogether.
So why is this happening? The Wall Street Journal claims that big firms are demoting and firing due to profitability fears. In the competitive legal market, every firm aspires to increase profitability, and big firms are determining whether the partners are significantly contributing to the company’s success.
Beyond profitability, firms are also looking at the partner’s current hours, and ensuring that they’re continuing to work just as hard as ever, rather than riding on previous accomplishments.
Nowadays, the competitiveness of the legal market has caused the “rain makers”, who work “less” to maintain their position while the classic definition “hard workers” (working 12+ hours a day) lose out on a spot. It seems that if it isn’t as prominent of a factor, employees have less incentive to work hard.
If firms continue down this path, we can be seeing long term modifications, resulting in a more corporate structure. This shift could result in employees spending another 5 to 10 years in middle-management positions, with higher pay but in a non-equity role.
This trend hasn’t hit the boutique firms for now, and it’s not likely that we’ll be seeing too much change in the basic structure of the big firms yet.
There isn’t too much flexibility in the highly competitive legal market, but the few pioneering firms who choose to take the risk may be just the beginning of some major long term change.
It’s unclear if this phenomenon will reach the ever growing, constantly expanding Israeli legal market.
On one hand, big firms are constantly hiring more lawyers, and as a result are promoting many of those already on the team. On the other hand, with a 1,141% growth in bachelor degree law graduates in just 8 years, it wouldn’t be too far-fetched of an idea for big Israeli firms to follow in the footsteps of the international big firms and begin to scrutinize their employees’ activity as well, in an attempt to beat out the competition.
Read the article here: http://bit.ly/2oOrfSQ
Additional credit: http://bit.ly/2noxHA2