The legal profession around the world is undergoing a significant transformation. The turn of the century saw the world’s largest accounting firms offer legal services through different forms of multidisciplinary practice models. n 2007, Slater & Gordon became one of the world’s first public law firms. In the same year, the United Kingdom enacted the Legal Services Act in an effort to modernize the delivery of legal services. During this time period, several large national and multinational law firms—so-called Big Law firms (e.g., Brobeck, Heller Erhmann, Dewey & LeBoeuf, Thacher Proffitt, Thelen, Coudert Brothers, and Howrey)— dissolved due to financial and business issues. Further, many firms have merged in order to better position themselves for the highly competitive marketplace.
Big Law firms are experiencing significant challenges in this new marketplace. The growth of in-house corporate legal departments has resulted in a decrease in corporate client reliance upon private law firms. The economic crises of the past ten to fifteen years that resulted from various corporate financial scandals and failures, the bursting of the housing bubble and related problems in the banking and mortgage loan industries, the dot-com boom and its subsequent crash, and the losses in unregulated derivatives markets have all contributed to a likely reduction in the need for high-dollar legal work. In the last five years, many of the top 100 law firms have suffered significant declines in their gross revenues and have taken measures to reduce their reliance upon a leveraged model of the associate-partner pyramid.
During the last five years, several innovative legal services models have begun to offer corporate clients an alternative to Big Law lawyering. The stated impetus underlying this development is the need to innovate the century-old guild of lawyering that has failed to adapt adequately to the changes in the modern competitive marketplace. Clients are simply looking for alternatives to the large multinational law firms that only provide legal services through the traditional partner-associate service model. A secondary reason for this development is the need to address the reported widespread dissatisfaction of lawyers who work in Big Law firms. The new law firm models seek to offer highly skilled lawyers an alternative to the 2,000-hour-per-year billing model of traditional large corporate law firms. Moreover, these entities seek to confront other important work-life balance issues that the traditional large law firms have largely failed to adequately address.
This Article examines several different Big Law alternatives that have experienced significant growth during the past five years. Part I briefly addresses the problems that corporate clients have with the current practices of the large law firms. Part II introduces six different types of legal service providers that are targeting the clients of traditional large law firms. It examines their business models in detail and identifies the main ways in which these firms deliver legal services. This Part compares and contrasts how these models differ from traditional Big Law practice. Part III addresses the key ethical issues presented by the new alternatives to Big Law practice. Finally, this Article concludes with an assessment of how these alternative firms are likely to affect the practice of traditional large law firms.
Much scholarship has been written about the transformation of the legal profession, and this Article builds upon the work of others. Some commentators focus upon the downturn in the world’s economy as the primary cause of the changes in the world’s legal professions. Others argue that the traditional law firm models simply cannot withstand the economic and technological changes that have taken place in society. This Article addresses the specific question of whether and to what extent the new and innovative ways of delivering legal services to corporate clients are affecting the traditional lawyering model. Although the changes are likely to take many years, several of these innovative firms have a significant likelihood of changing the way in which large corporate clients receive legal services.