Whenever a big law firm implodes, lawyers and business reporters start looking at why, and the demise of Dewey & LeBoeuf is no exception. They are always able to find a reason, one that makes this failure unique and that has nothing to do with the law firm model. In the 1980s and 1990s, we saw an occasional meltdown of famous firms such as Finley Kumble, Donovan Leisure and Shea & Gould. But now, with so many formerly noted firms collapsing during the past few years, perhaps it is time to realize that it is not just an occasional bad management decision, a toxic mix of personality or an economic downturn that is causing these problems, but the very big law firm business model that is causing firms to go belly up.
The reality is that the traditional top-tier law firm model is based on an antiquated business structure. Despite all evidence to the contrary, big firms still deluded themselves into believing that the firm names alone, put in big bold letters by the elevator banks, are what clients and top attorneys are drawn to. They don’t realize they are a collection of expert professionals who can and do move to different firms when a better opportunity comes by. They claim to be a partnership, but automatically freeze out junior partners and associates. As we found out with Dewey, firms can even ignore their most important attorneys in order to maintain a tight hold on power.
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