Do Law Firms Operate on Principles of Capitalism or Totalitarianism?

I was having a beer at Right Brain Brewery last night with a friend who graduated from law school and then went to work for a large corporation.  We talked a little politics, both local and national, and about large corporations-both law firms and other companies.  Chris noted that his biggest disappointment as he rode up through the corporate ranks was his realization that most of the people at the top were idiots.  What kind of incentive system have we put in place when the most conniving, connected, egomaniacal and self-absorbed people often are the ones who run the show.

I always chuckle when I hear people talk about capitalism as though it is this “single thing” which we have achieved in the United States of America.  At its core, capitalism is about incentives and rewards.  The flavor of capitalism which has been practiced over these last many decades has rewarded political maneuvering, power grabs and “being connected.”  None of these traits are ones which I believe provide fuel for our economy. 

Over a good conversation and a couple of beers last night, I realized once again that the internet and technology offer levels of potential in the areas of innovation, talent, intellect and work ethic which could drive us closer towards the capitalistic ideal.  I just happen to be lucky.  I work in an industry where innovation is largely stagnant.  But honestly, there is not a lot of competition because most law firms spend tremendous energy simply trying to keep things about the way they are today.  That is, the way things have been for the last decade or two.  Because there is a lack of advertising in the law (which any analysis would tell you is simply there to preclude consumers from identifying options), lawyers and law firms operate in their own little mini market.  This market is largely insulated from outside forces which would incentivize innovation. 

I have met some truly innovative managing partners in my day.  But the vast majority of firms are run by people who, by any objective standard, have no business at the top.  Then again, many of them have accumulated power, made it rain with clients based on their social connections or worked to the endless hours which are the current measure of success in law.