The Musings of Gary M. Zeiss

Archive for March 2009

Have the Four Horsemen of the Lawpocalypse arrived? It’s starting to look possible, at least for many that we’ve considered biglaw over the past few years…

1) Pestilence – given a crown and spreading disease wherever it goes. How about the AmLaw 100? The struggle to stay at the very top of that ridiculous list has spread disease throughout the legal profession.

2) War – well, perhaps not “war” per se, but certainly an attempt by firms to capture the princes and princesses of other firms to bolster their own royal families.

3) Famine – associates? Non-equity partners? De-equitized partners? Not a whole lot to eat there.

4) Death – Thelen, Heller Ehrman, Morgan Finnegan – who’s next?

Certainly, there will be a couple of these behemoths left at the end – but it could very well look like an accounting practice, where we went from the Big 8 to the Big 5 to the Big 2 (is the Big One next?).

Are we looking at Lawpocalypse Now? Time will tell…

Of all the songs that I have ever heard, “Fear is Never Boring” always struck me as having the best title – a statement that forms a solid basis for getting through this life and onto the next. Brought to light by the little-known 80’s band, “Adrian Belew and The Bears,” the title is, to me, a meditation for these troubled times.

Many of us are living in fear – about our futures, our children, our friends and our lives. These are times when we don’t want to get out of bed, don’t want to get in the car, don’t want to go to the store – frankly we don’t want to do anything. Why? Because we’re scared.

But should fear paralyze us? Or should we use it to get out of the boring, settled times of success that we just passed? I think the latter. There is nothing more boring than too much success. We got to the point where we simply had to push the lever for the food pellet (or iPhone or BMW) to come out… it got too easy, and too boring! Hell, many folks could simply make money while asleep.

However, now, every move has risk. We face constant uncertainty. To navigate these uncharted waters, we need to have our senses about us. We need to see, to anticipate, to adjust – to look risk and uncertainty in the face and say “so what!” It’s not boring, it’s exhilarating.

So, this little-known band from Cincinnati, playing this even more obscure song, could, no should, become the anthem of a generation! The time is right! Fear is, in fact, exhausting, depressing and exhilarating – but it is Never Boring.

I just hope that Adrian still gets royalties!

The End of the Large Law Firm

I think we’re seeing the beginning (or the middle) of the end of the large law firm now that we’re seeing the legal market implode. Why do I say this?

Firms are like pyramids, with a few pointy-heads at the top being supported by a greater and greater number of pointy-head wannabes below them. However, in recent months, firms have carved big holes in their support structures – all in the name of keeping the pointy heads at the very pinnacle.

Now that these organizations have finished decimating their middle ranks, they’ve cut their intake of new blood. The bottom, too, is going to be gone. Next, the firms are hatcheting off the almost-pointy-heads at the partnership level. Pretty soon, the firm of Gross, Grand and Huge will be down to two attoreys, Gross and Grand – and when Gross doesn’t pull in enough to keep them at the AmLaw pinnacle, Gross will be gone, too.

Any study of the social effects of a bubble economy shouldn’t hesitate to focus on the legal market – where we have now seen a complete breakdown in the social compact that once kept this rather patrician profession together. It’s true – when the sharks run out of fish, they eat each other… yum.

One has to wonder when corporate America is going to wake up and get behind a single-payor or hybrid health care system.  While this may go against the DNA of most senior management teams, the burden of dealing with employee and retiree health care has brought some of our most significant companies to their knees.

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As I watched the law firm layoff numbers balloon throughout the quarter, I couldn’t help but wonder how many law students would become entrepreneurs after law school.  Given the market, I’d expect that a few would find themselves in that place.

That got me thinking about this time.  Big Law is collapsing, eliminating the bottom and middle of their pyramid schemes.  With the foundation eliminated, it isn’t clear that the top will be able to survive.  Partners who have commanded legions of associates are now going to have to get their own hands dirty, and it isn’t clear how many clients will have the stomach, or the bank balance, to tolerate $700/hour fees – even if they’re discounted by 10%.

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The Promise and Peril of the Freelance Economy by Laura Vanderkam, City Journal Winter 2009.

I found this to be an interesting, reasonably in-depth look at the freelance economy .  More and more of us have taken this road, and frankly, it is very difficult to look back.

What is particularly interesting in this article is the author’s point that freelancers are moving generally to the left – caused mostly by the lack of affordable or accessible health coverage and the country’s failure to come to consensus on a universal health care system.

Anyhow, an interesting read.

Gary.

Few would argue that the current healthcare system needs overhaul.  The current model of employer-sponsored private insurance has become unwieldy and unsustainable – particularly when employers are cutting upwards of 700,000 jobs a month.

At the same time, our current financial crisis is calling upon our public resources in record ways in hope of averting the Greater Depression.  The jury is still out on whether it will succeed.

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  • Mike: I was just speaking to a friend in DC that was explaining the same thing to me. The firm he's been clawing his way to the middle of for the last 7 ye

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