80% of BigLaw firms say their nonequity partners aren't busy enough: Will their ranks be trimmed?
A new survey of law firm leaders reveals that partners at a majority of the firms don’t have enough work, and demand for legal services is lagging behind pre-recession levels.
Despite the gloomy assessment, law firm leaders report that their partners are resistant to change, according to an Altman Weil press release. “Despite pockets of true innovation,” Altman Weil says in an executive summary (PDF), “most firms are choosing to proceed with lawyerly caution in the midst of a market that is being reinvented around them.” The full survey results are here (PDF).
Fifty-two percent of the surveyed law firms report their equity partners are not sufficiently busy. Sixty-two percent say their nonequity partners are not sufficiently busy, including 80 percent of firms with more than 250 lawyers.
According to the executive summary, nonequity partners “present the most obvious target for law firm right-sizing,” but “in too many firms personal, political and cultural obstacles are hindering pragmatic economic decisions.”
Altman Weil sent its “Law Firms in Transition Survey” to 800 U.S. law firms with 50 or more lawyers, and received completed surveys from 356 law firms, including 48 percent of the nation’s 200 largest law firms and 49 percent of the 350 largest law firms.
The survey also found:
• Overcapacity is holding down profitability in 60 percent of all law firms and in 76 percent of larger law firms.
• Only 38 percent of law firm leaders say demand for legal services has returned to pre-recession levels. Sixty-two percent of the leaders think the erosion in demand is a permanent trend.
• When asked why law firms aren’t doing enough to change the way they deliver legal services, the top response from 64 percent of firm leaders is that their partners resist most change efforts. That represents an increase of 20 points from last year.