Editor's Comment: Need for greed?
Competition is spurring the relentless drive to boost profits
August 09, 2006 at 08:03 PM
2 minute read
Judges are not necessarily well-known for their egalitarian tendencies. But a couple of years back, Mr Justice Lightman publicly ruminated over the implications of the transformation of the law into a business.
He argued that the relentless drive by chambers and law firms to meet the "ever increasing (though already inflated) financial expectations" of their staff was incompatible with professional duties and standards. He even called for an investigation and, if necessary, regulation to curb this trend.
Imagine the uproar if the Government were to launch an enquiry into the leading law firms because they are too profitable.
And yet, it is possible to catch senior lawyers wondering out loud quite where the relentless drive for profit is leading the profession.
A senior in-house lawyer captured the mood perfectly in a posting on Legal Week's website when she described a schism between private practice and in-house, similar to the one between high street and business law: "Private practice lawyers have now joined the ranks of the City elite, like fund managers, who can afford flashy luxury goods but have to sacrifice all semblance of a decent work-life balance."
Notwithstanding the results of this week's web poll ( see below), it is too simplistic to equate the drive for profitability with greed. Profits per partner is a key benchmark against which the success of a firm can be measured.
When a managing partner recently secured a commitment from the partnership to aim for a significant increase in profitability in the mid-term, some partners privately questioned the need.
His response was to invite them to imagine where the firm would be now if, three years ago, it had settled on the level of profitability it had achieved then.
The reality is that competition is compelling firms to stretch the traditional law firm model to near breaking point. As this year's Legal Week Top 50 shows, profitability increases are being achieved by keeping a tight hold on the equity and squeezing more work out of foot-soldiers, whose financial rewards, though generous in terms of the rest of society, are piffling in comparison to what the partners receive.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllSkadden to Close in Shanghai and Make Cuts to China Corporate Practice
DWF Group's Canadian Firm Set to Add Fourth Office With 16-Lawyer Montreal Team
UK Law Firms Face £75M Money Laundering Investigations Alongside Russia Scrutiny
3 minute readTrending Stories
- 1The Law Firm Disrupted: Playing the Talent Game to Win
- 2A&O Shearman Adopts 3-Level Lockstep Pay Model Amid Shift to All-Equity Partnership
- 3Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
- 4BD Settles Thousands of Bard Hernia Mesh Lawsuits
- 5A RICO Surge Is Underway: Here's How the Allstate Push Might Play Out
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250