Mammals & Dinosaurs Co-Existing

Among the AmLaw 200, mergers are in the air.  Like it or not, this seems to be the reality we are facing:  Consolidation.

I've addressed the "fact" of this trend before (I think it's safe to say at this point that it's a fact—Hildebrandt certainly thinks so).  This is what economists call the "positive" aspect.   What I have so far left unaddressed, at least explicitly, is the "normative" aspect.  [Jargon digression:  "Positive" in this usage has nothing whatsoever to do with "not negative;" all it means is descriptive, factual, "what is."  "Normative" has a more judgmental implication, and implies "what should be."]

To help frame this discussion, here are two pieces taking, essentially, opposite views of whether BigLaw will rule the earth (or the market for F500 legal services, anyway).  Greg Jordan, Managing Partner of Reed Smith (AmLaw 100 #31) has this to say in an interview: 

Although some legal observers think the law firm merger mania is about to cool off because many of the most attractive medium-sized firms have been snatched up, Jordan doesn't agree.  He believes law firms are "fairly early in the trend of consolidation, and while we won't end up like the accounting world with just three or four major firms, I do think over the next several years there will be 30 or 40 or 50 major law firms who are in the position to get most of the major international projects and have significant operations in key markets throughout the U.S. and Europe and Asia."

Need I add that he intends for Reed Smith to be one of them?

Contrarily, we have Brenda Sandburg of the SF Recorder reporting that "The Fortune 500 Think Small," and citing among others Chevron, Cisco, and GE picking firms that are anywhere but in the AmLaw 200.  Although a variety of reasons are cited, this encapsulates them: 

"It's really the attorney you're hiring, not the firm," said Gary Loeb, Genentech Inc.'s director of litigation. He said the greater responsiveness of smaller shops and the difficulty in finding big firms that aren't conflicted out of a case are also factors in looking beyond mega firms. At a large firm "an attorney brings you in and may not work with you again," Loeb said. Smaller firms "may be more responsive and have younger partners and associates eager to be full service."

A consultant friend of mine, himself an alum of an AmLaw 100 firm, anticipated when he went out on his own that clients would naturally gravitate to BigLaw for its perceived quality, safety, and full service.  But to his surprise he has found that small and midsize firms can hold their own, for these reasons:

• The "known quantity" factor:  As Loeb's observation implies, at a small or midsize firm, the lawyer you hire is the lawyer who works on your matter.  "People don't see the names of total strangers appearing on the month-end bill."
• "Top quality" lawyering: Again confirming Loeb's thoughts, the professionalism, judgement, and experience of the individual you hire is what really matters, and people of high caliber can be found outside the AmLaw 100.
• And finally, of course, good old value:  For a variety of reasons, smaller firms' billing rates tend to be lower—and they don't overstaff matters, to boot.

In the ecosystem that is the supply side of the market for legal services, there may be more than one survival strategy.