Posted Aug 17, 2009 03:37 pm CDT
Most everyone agrees that the law firm business model is dead, but there is little consensus on how to fix it.
Legal consultant Joel Henning says most of the conventional ideas for change are “insipid and inadequate.” Writing for the National Law Journal, Henning outlines the approaches most often discussed, but deems them of little help.
“There is a lot of talk about moving away from billable hours, but alternative fee arrangements are neither new nor making much headway,” Henning writes. “Greater use of contract lawyers, offshoring, fewer equity partners, a cutback in associate salaries and more differentiation in associate pay and promotions—are all being discussed and even modestly implemented. But all of this has been around for at least a decade, and none of it has so far done much to make clients happier either about their legal bills or the quality of the services they pay for.”
Instead, Henning endorses an approach suggested by University of Illinois law professor Larry Ribstein: Allow outsiders to own shares in law firms.
Henning argues that ethics rules are interfering with more innovative methods to handle business relationships, he writes. The result might be less emphasis in law firms on individual performance and more on team, practice and firm performance.