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Change in the Offing -- In BigLaw Models and Diversity

These are tumultuous times for the nation's largest law firms. The world around them is changing on many fronts and at a rapid pace. Adapt or perish should be their mantra. Two separate special reports published today -- one from The American Lawyer surveying law firm leaders and another from The National Law Journal on women in the law -- make this abundantly clear.

For the American Lawyer survey, leaders of 142 of the Am Law 200 firms responded to a confidential questionnaire. The takeaway, writer Drew Combs reports, is that firms are still testing the waters of the financial crisis. The survey "shows an increased willingness among firms to implement a smorgasbord of short-term cost-cutting measures while pondering more fundamental changes."

Are they testing the waters or engaging in denial? The results could be read either way. While 56 percent of firm leaders say the current economic downturn has produced a fundamental shift in the legal marketplace, 70 percent of those same leaders say it has not produced a corresponding shift in their own firm's business model. Two-thirds report optimism about 2010 and 81 percent will raise rates next year. "Lawyers are resilient," Richard Cullen, chairman of McGuireWoods in Richmond, Va., tells Combs. "It's like a trial we feel we can win."

Yet, driven in large part by the demands of clients, change in the ways law firms do business is likely irreversible, writes Aric Press, TAL's editor-in-chief.

There are plenty of disparate events that support the observation that this change business is more than just a sideshow. On the customer front, two examples: Half of The American Lawyer's 20 A-List firms are on record this year as starting alternative fee arrangements with important clients such as Pfizer and Citibank. And, if Microsoft could chop K&L Gates and Sullivan & Cromwell from its preferred provider list, what client-firm relationship is inviolate? On the talent models, we all know the litany of layoffs, deferrals, partner departures, and embraces of so-called competency models. Add to that the fact that outsourcing now has its own initials -- LPO (Legal Process Outsourcing, for those few of you who haven't been in the conversation) -- and law firm HR just got harder and global.

One area in which change has been frustratingly slow to come at large law firms is in diversity. Women, The National Law Journal reports, still make up only a quarter of the lawyers at NLJ 250 firms and fewer than a fifth of all partners. If there is good news in this report, it is that the recession's impact was no more severe for female lawyers than for their male counterparts. Over the last year at the nation's largest 250 law firms, the number of female lawyers decreased by 2 percent, compared to an overall headcount loss of 4 percent.

But if change for women has been slow to come, there is pressure anew on firms to increase their gender diversity -- and it is coming from a not-so surprising source: corporate clients. A dozen major corporations are involved in an initiative to boost the number of women and minorities in top law firm positions by adding part-time and flexible working schedules to the requirements they demand of outside firms seeking their work, the NLJ reports. Spearheaded by the Project for Attorney Retention and dubbed the Diversity & Flexibility Connection, the initiative seeks to help legal departments and law firms support flexible working schedules and ensure that part-time attorneys have meaningful work and important roles within their firms.

Monoliths that they are, large law firms are slow to change course. Yet resistance is futile, it would seem, as change appears inevitable. "Those who embrace the changing circumstances stand to live long and prosper," writes TAL editor Press. "Those who resist might want to reach for a couple of aspirin."

Posted by Robert J. Ambrogi on November 30, 2009 at 04:10 PM | Permalink | Comments (2)


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