Supply, Demand, and the Changing Economics of Large Law Firms

By Bruck, Andrew; Canter, Andrew | Stanford Law Review, April 2008 | Go to article overview

Supply, Demand, and the Changing Economics of Large Law Firms


Bruck, Andrew, Canter, Andrew, Stanford Law Review


INTRODUCTION
  I. THE RISE AND FALL OF LEGAL PROFESSIONALISM
     A. The Transformation: The Tournament Intensifies
     B. The Effects of the Transformation
        1. Billable hour escalation
        2. A lack of racial and gender diversity
        3. High associate attrition rates
 II. THE DEMAND SIDE: CORPORATE CLIENTS
     A. What Reforms Do Clients Want?
     B. Will Clients Push Firms to Reform?
     C. Will Firms Comply with Client Demands?
III. THE SUPPLY SIDE: LAW STUDENTS
     A. What Reforms Do Students Want?
     B. Will Students Push Firms to Reform?
     C. Will Firms Comply with Student Demands?
CONCLUSION

INTRODUCTION

In 1991, Marc Galanter and Thomas Palay declared a "crisis" in the legal world. (1) Their landmark book, Tournament of Lawyers, described how structural changes within the profession forced America's largest law firms to abandon professional norms in pursuit of ever growing profits. (2) Galanter and Palay's arguments confirmed fears that the legal "golden age" of the 1960s had given way to a model based on unchecked competition and growth. (3)

In spite of these developments, and partly because of them, the legal profession also faces an exciting new opportunity. (4) The shift towards commercialism has introduced external market forces to an industry long insulated from them. (5) If mobilized properly, the consumers of corporate legal services can use their new market power to address some of the most critical problems facing the elite firms, especially the lack of diversity within firm leadership, rising associate attrition rates, and an over-reliance on the billable hour. (6)

The "professionalism" that dominated elite firms in the middle of the twentieth century undoubtedly encouraged civility and trust between lawyers. But it also operated as a mechanism for shielding the narrow financial interests of big-firm partners and for marginalizing lawyers based on religion, race, and gender. Until recently, these norms were so deeply entrenched in large firms that outsiders could not seriously challenge the inequities and inefficiencies of the existing system. In today's market-driven model, however, two groups have developed the leverage necessary to push for change: general counsels of large corporations, who purchase the labor of large law firms, and elite law students, who supply this labor. They can squeeze firms simultaneously from the supplyside and the demand-side to correct some of the excesses and shortcomings of the current economic model.

On one side, corporate decisions about hiring outside counsel determine the demand for legal services. (7) The rapid expansion of elite firms over the past three decades has created intense competition for premium legal work. Corporate legal departments can now choose between a wide array of elite firms, which provides general counsels with substantial leverage to negotiate retainer agreements. These in-house lawyers seek to hire firms that are productive, efficient, and diverse, partly because they believe these traits are good for business, and partly because they worry that law firms lag so far behind the rest of the business world on such metrics.

On the other side, the rapid increase in firm size has made law firms increasingly dependent on hiring an escalating number of new elite (8) law student recruits. Most prestigious law schools have not increased their enrollment to meet the rising demand, (9) which has created scarcity in the labor market for new elite law graduates. One well documented effect of this scarcity has been spiraling entry-level salaries, although this is not the only consequence of the tightening market. Increasingly, new elite law graduates are seeking more than well paying jobs; they want positions at companies that maintain a diverse workforce and that respect the balance between work and family.

A unique set of economic conditions has created a buyer's market for in-house counsel and a seller's market for elite students. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Supply, Demand, and the Changing Economics of Large Law Firms
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.