HOW DID WE GET HERE?
Ongoing changes in technology and society
Economic Crash of 2008
Rise of Megafirms in late 1990s in
reaction to globalization and limited liability
American lawyer rankings start in July 1987
Billing by hour starts to take over in 1960s
Specialization leads to assembly by 1950s
Cravath System of early 1900s
In early 1900s, Paul Cravath turned the affiliation of partners with
apprenticeships model into an up-or-out salaried model with strong
management, specialization, and hierarchy. Associates who survived
became partners. This created a pyramid structure.
Changes in society and business models from the 1920s,
and hyper-specialization resulting from Cravath System,
eventually brought the assembly line to law firms.
Before 1960s, elite law firms would send a bill for “services rendered”.
Clients began to demand clearer metrics, so law firms start billing by the hour.
In 1960s attorneys at elite firms were expected to bill about 1300 hours a year.
AMERICAN LAWYER RANKINGS
In July 1987, American
Lawyer Magazine starts
ranking law firms by
profits and revenue.
Result: obsession with profits per partner and revenue. Leads to larger firm, more
leveraging, longer partner-track, higher billable rates, de-equitized partners, more lateral
movements, more mergers, higher pay for rain makers, and higher billing requirements.
Often to overall detriment of firm.
LIMITED LIABILITY PARTNERSHIPS
In 1992, only two states allowed LLPs, by 1996 over
forty states had adopted LLP statutes by the time LLPs
were added to the Uniform Partnership Act in 1996
Limited Liability Partnerships allowed for greater
risk when bringing in lateral partners. This led to
more movement of lateral partners.
Partnership structure is often short-term focused.
In response to globalization, Limited Liability Partnerships (1992)
and AmLaw revenue rankings, law firms compete for size, starting
in late 1990s. Desire to be everywhere their clients were.
Result: higher conflicts, more bureaucracy, increased leverage.
Overleveraged firms with large employee and real estate
Overhead, and high salaries promised to rainmakers, show vulnerability to
economic downturns, especially in 2001 and 2008.
RISE OF ALTERNATIVE MODELS
ARE WE TRYING TO SOLVE?
learning on the job
of attorneys in Big Firm
Is there an alternative to
"Soul Crushing" work?
Convergence of changes in
TECHNOLOGY, CULTURE and the
THE ECONOMY HAS PLAYED A HUGE ROLE
Corporate legal departments are under
tremendous pressure to manage costs and justify
Old model was squarely CYA
With increased focus on costs, alternatives to
Big Law (including in-house, solos, etc.) are
seen as increasingly legitimate options
CHANGES IN TECHNOLOGY
Disruptive Technology lowers the barrier to entry
enabling startups to compete with Big Law.
Product produced by Associates
ALTERNATIVE FEE ARRANGEMENTS
Try to reward good work, not inefficiency!
ONLINE DELIVERY OF SERVICES
SEGMENTATION OF MARKET AND ASSIGNMENT
OF WORK BASED ON RELATIVE IMPORTANCE
Would you have an aerospace engineer
repair your Vespa?
Recognized by Best Lawyers of America and
All of Rimon’s
partners have at least
Hold JDs, PhDs, LLMs, and MBAs from the best
universities in the United States and abroad
All attorneys working on every matter are highly
specialized in their respective field
from some of the top law firms
in their respective fields.
Former partners at global law firms,
executives at global corporations, and
professors in business, law and science