Vision for Big Firm - 2011

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"[T]he recession will last through 2010. Law firms will use this period to substantially restructure, and beginning in 2011, things will start growing again. While there's a lot of detail and nuance around the form this restructuring will take, it can be described in simple terms. A typical law firm bill in January 2011 will generate the same dollars for partner work as it does today, but it will generate half the revenue for associate work. Consider a bill in July 2008 for $1,000,000, representing $450,000 of partner contribution, $500,000 of associate contribution and $50,000 of "other"; in January 2011, the bill for an essentially identical project will be $800,000, reflecting $450,000 of partner contribution, $250,000 of associate contribution and $100,000 of "other."

Whether this is accounted for as hourly billing or "value billing" is not particularly strategic, except that to measure differently will, of course, incentivise firms to be more thoughtful about how to structure work.

Where will those dollars go? Four places.

1. Clients will just flat-out spend less, drive harder bargains and get more for their money.

2. Some work will go to outsourcers, whether onshore or off.

3. More work will go to contract lawyers or proto-associates not on any kind of partnership track.

4. Some associate time will get replaced by technology.

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