Lawyer managed firms

To illustrate lawyer managed firms, I offer two opposing essays from the ABA Journal on the question of whether huge law firms are bad news. One commentator, Peter Megargee Brown, titled his essay, "Yes: Greed Is the Bottom Line." Against him, two legal consultants named Jack Kaufman and Bradford W. Hildebrandt wrote an essay entitled, "No: Big Clients Need Big Firms." My cut-and-paste job, which uses at least some of the writers' words to express their essays' concepts in dialogue form, is as follows:

X: The pursuit of money for money's sake must be eradicated before it destroys the profession and, in turn, our entire system of justice. Many of the greediest lawyers are found today practicing in the mega-firms.


Y: The question of whether the rise of mega firms has endangered professionalism is provocative, but it misses the point. The real question is, are clients well served by the mega firm?

X: Twelve years ago, an old-timer lawyer managed more firms, and "management" consisted of making certain that everyone had enough pencils and legal pads. Today, professional manager-accountants - the new barbarians - who often have no real knowledge of the profession run firms.

Y: The practice of law has become far more complex and diverse. Size has allowed the big firms to specialize, resulting in better client service and high-quality training to younger lawyers, along with state-of-the-art technology. We have fond memories of Mom and Pop grocery stores, but we would not shop in one today. Does the profession have any choice but to deliver what the clients desire? I'll pass over the contrasting views on mega firms. Instead, I draw your attention to a difference of attitude.

Consider, this question: As an attorney, if you obey the Code of Professional Responsibility, is that good enough? Or do you owe someone - the client, society, your family, or yourself- an additional moral, or "gentlemanly," duty beyond what's required by that ethical Code?

For Mr. Brown, the answer seems to be yes, you owe an additional moral duty. But for Messrs. Kaufman and Hildebrandt, we don't have the luxury of indulging that additional moral whim. Our clients are demanding, and we've got to give them what they want, right up to the very edge of the law. Indeed, that's what the Code expects. From that perspective, competition is not an afterthought, but is, rather, the organizing principle of the law, and everything good that you do, as a lawyer, comes from your determination to compete thoroughly.

The profession is pretty much following that approach now. For example, the Supreme Court has struck down the use of noncompetitive "flat rate" fee schedules, and has upheld lawyers' right to compete in advertising. Clients are more cost-sensitive. Firms are hiring more professionals in management, finance, and marketing to replace the old-fashioned partnership approach of democracy and consensus. The largest law firm estimates that it will eventually employ more than 5,000 attorneys, and the legal staffs at some corporations are bigger than entire law firms.

If anything, the competition will intensify as the rules change. There is now a chance that huge companies like Sears will be allowed to open law offices, squeezing the profit margins of today's local firms. A lot of smaller firms are hurting anyway: They must buy expensive computers and make other investments to remain competitive, but can't generate as much income from those investments as the bigger firms. Indeed, it's been said that you now need 200 lawyers to have a top-quality general practice firm.

The good news is, this competition saves you money when you go to a lawyer. The bad news is, it saves your adversary money too.

Actually, there's more bad news. Remember People Express? For a while there, we had an orgy of airline competition. But then, son of a gun, everyone merged into everyone else, and now it's not so clear what all that competition has given us. Are you ready for the day when Hertz and Avis dominate the legal industry?

Individual lawyers aren't so happy with the switch from the Old World to the New World. We're talking about an environment, nowadays, like this: Lawyers scream, engage in personal attacks, and even get into fistfights in the courtroom; a majority of them agree that civility has deteriorated; they routinely fail to return one another's phone calls; they make huge demands for papers to be used as evidence, with no intention of actually reviewing those papers; and they adopt, as a standard tactic, the stance of opposing whatever the other side does or asks for. One judge quit the bench after deciding that the courtroom had simply become too nasty. Her words? "Life is too short." Consider:

It's gotten to the point where lawyers will shut off their fax machines at 5 p.m. on Friday so that the other side won't send a notice at 11:30p.m. about a Monday morning hearing.

[What used to be a gentleman's profession, relying upon a code of honor more stringent than the professional ethics, has degenerated into a hostile, backbiting environment....

Law is no longer about having a good time, serving people and doing interesting, important work. It's about making money.

If you're not making at least $200,000 a year after 10 years of being a small practitioner, you're in the wrong business. Working as a small-firm lawyer is too hard if you're not making a lot of money at it.

Don't get me wrong. We can complain, but nobody has any good ideas for how we might go back to the gentleman's old practice of law. We're in the deep part of this competitive toilet bowl now, and the only way out is down the tubes. Hold your nose and hang on.

And really, it's not all bad. Personally, I've been a client, and it sounds much better to me to think that lawyers have to scramble for business, and have to please me and charge fair amounts, than to let them sit up on their haughty thrones and do with me what they wish. But being a lawyer in this competitive environment? That's a different matter.