Law Firms

A recent Altman Weil report suggests that law firms are operating at overcapacity and need to downsize.

According to the legal consulting company’s study, “The most obvious solution to the overcapacity problem is to cut underperformers. Fifty-four percent of firms report that they dropped lawyers who didn’t have enough work in 2015, and 73% of firms are removing chronically underperforming partners.”

Firms might not find themselves in such dire straits if they followed a different business model.

The “pyramid structure” of law firms represents the “negative approach” to employment in the legal industry where attorneys are weeded out, Patricia Gillette, a former partner at Orrick, Herrington & Sutcliffe, told Bloomberg BNA.

Gillette is a speaker and author on issues of gender equality, diversity, discrimination, unconscious bias and women's rights.

In such a model, firms bring in a lot of attorneys with the idea that most will leave, she said.

Instead, firms should hire fewer new associates and pay them less. The associates won’t be held to the billable hour standard because they will spend their first three years “learning how to lawyer,” she said. They will receive a lot of “career counseling” during this time and learn how to develop client relationships.

Once they’re “capable of being productive members of the firm,” they will be measured by their competencies and productivity and be compensated for their contributions, i.e. according to merit, Gillette said.

This is a model where we invest in people, Gillette said.

It promotes efficiency and rewards according to the contributions each attorney makes.

“These are the qualities that make more successful lawyers” who are measured by competency, not hours billed and what law schools they attended, she said.

The result will be better-trained lawyers, more satisfied clients and a more diverse workforce.

This approach may also lead to an attorney work force that matches the law firm’s needs and avoids layoffs down the road.

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