And the Biggest Is....
The National Law Journal 250 is out, with great news for law firms: they've experienced their biggest growth spurt since 2001 (National Law Journal, 11/12/07). Topping the charts as the largest firm is DLA Piper with 3,623 attorneys, displacing Baker & McKenzie (with 3,335 attorneys) from the top perch, which it had occupied for nearly 30 years. What's even more amazing, DLA Piper did not even enter the top 25 until five years ago, but through mergers and expansions, reached the top two by 2005.
Firms are still looking to mergers to power further growth. Mergers contributed to the greatest gains in individual law firm growth in 2007. Even so, many of the largest firms still question whether they are big enough to serve clients, according to Bill Brennan, a law firm consultant quoted in the article.
At the same time, despite strong showings last year, Brennan predicts that the good times may not continue. According to Brennan, "Ripples from the mortgage debt crisis, the war in Iraq and escalating tension with Iran are all poised to undercut the economy." And many law firms are re-evaluating their business model, including the traditional, highly-leveraged use of the billable hour, in response to client demands.
As I see it, if the statistics from 2007 are any indication, the billable hour won't be abandoned any time soon. In some respects, larger law firms are better for clients in that they enable one-stop shopping. But more than anything, bigger is also better for partners, because it means more associates buzzing away on billable hours that sustain partner profits. With technology enabling firms to outsource or improve efficiency, firms shouldn't need to grow as fast as they are to serve clients. In my view, the only factor that explains this exponential growth is that the billable hour is here to stay, and indeed, matters more than ever.
Posted by Carolyn Elefant on November 12, 2007 at 04:24 PM | Permalink
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