Big Law’s Pyramid Model Is Collapsing

Essentially, big law operates on the fundamental premise of ever-increasing billable hours.  In order to support the salaries at the top, they must continually add increasing number of associates at the bottom.  Graphically, the model appears as a pyramid where each year a new base is added which includes more associates than the year before.

As the vast majority of big law suffers under this tough economic environment, the pyramid model is suffering.  Not only are they failing to add increasing numbers of associates at the bottom of the pyramid, but also big law is putting on hiring freezes and terminating large numbers of lawyers and staff.

The failure of the pyramid model has a number of serious consequences.  The most serious consequences are going to be in the areas of culture and morale.  Big law attorneys suffer their business model in large part because of the big pay checks they receive.  Now that those pay checks, and the bonus plans that go with them, are under tremendous strain, many big law attorneys will begin to ask themselves whether it’s worth it.  More importantly, the culture of big law is one of ego.  New associates who spend years churning research memos and engaging in other relatively menial activity, drive their self-importance from the firm’s self-perceived reputation.  It is much tougher to strut the halls of the court house feeling like the most important person in the building because of the firm letterhead attached to your pleadings when you just laid off forty attorneys. 

As law firms start to break up, reorganize, and re-launch, you will begin to see the sort of diversity which many people, both lawyers and clients, have been waiting a long time for.  While many see hardship for lawyers over the next few years, we see opportunity.  There will never be a better opportunity to change the way law is practiced than now.