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The Law Firm Disrupted: Partners and Associates Disagree on (Almost) Everything

In this week’s Law Firm Disrupted, we take a look at the differences—and unfortunate similarities—between Big Law associates and partners.

I’m Roy Strom, the author of this weekly briefing on the changing legal market, and you can reach me here or sign up to receive this newsletter here.



Partners and Associates Disagree on (Almost) Everything

I have written before that law firm leaders have seriously different views about their places of work than the hordes of millennial associates they employ. This should be no big surprise. Older people have different views than younger people.

Nevertheless, it can be exciting and potentially useful to see those differences quantified. That happened this week with the release of a survey from Major Lindsey & Africa and Above The Law, which showed that partners and associates disagree on almost everything. (The 1,200-plus survey respondents were overwhelmingly associates, but the partners' answers represent the views of more than 120 people.)

Surprisingly, partners and associates are pretty much in agreement on the existential issues: The law firm business model is broken. But outside investors won’t help!

Among associates, 54 percent believe the law firm business model is “fundamentally broken.” Forty-two percent of partners agreed, which is actually among the smallest discrepancies between the two groups. Yes, that is vague. But I think that makes those numbers even scarier.

What would happen if 42 percent of a publicly traded company’s executives (who, like law firm partners, own meaningful portions of the businesses where they work) would admit their company’s business model was “fundamentally broken?”

Survey: Is your business fundamentally broken?

Public Company Executive: *Scratches forehead* Yes!

That may be cathartic if you hate your CEO. But it seems tremendously unlikely that 42 percent of many public boardrooms think their company is being driven into the ground. If they did, I would imagine it might create infighting and inaction. Or, perhaps, ideas for a solution.

On the solution front, non-lawyer ownership is not welcome. Asked whether some form of non-lawyer ownership would benefit the legal profession, associates and partners were also fairly aligned: 22 percent of associates think it would be a good thing, while a mere 13 percent of partners are in favor of it.

I personally feel these two beliefs—law firm business models are bad and so are outside investors—are contradictory. Capital infusions could help law firms transition to a business model that incentivizes creating long-term value (in other words, one that is not “fundamentally broken”). But I also understand lawyers’ protectionist instincts. Most Big Law lawyers have a good thing going.

Anyway, I promised to write about differences between partners and associates. Those are more fun. Perhaps the biggest disagreements between associates and partners in the survey can be grouped under the category of “partners resenting perceived associate entitlement.”

For instance, 53 percent of partners think that associates should have bigger workloads as a result of their recent compensation increases. Only about 20 percent of associates agree.

There is disagreement as to whether associates in fact are working more in light of the recent salary bump. A mere 16 percent of associates think work levels have been the same; 34 percent of partners think the associates are getting more pay for the same or less amount of work.

Partners and associates also don’t have the same views about associates’ contributions to a firm’s bottom line. A full 50 percent of partners disagree that the recent salary increases are a fair reflection of associates’ contribution to firm profitability. Less than a quarter of associates share that dim view of their profit margins.

Then there are the differences driven by varying cultural beliefs among generations. For instance, 45 percent of partners think law firms have made strides to address workplace gender issues since the advent of the #MeToo movement. A quarter of associates agree.

And while partners are less likely to “strongly agree” that law firm culture is “inherently sexist,” they are broadly in agreement with associates that law firms are indeed sexist organizations. Sixty-five percent of associates and 66 percent of partners agreed with that characterization. (Those are sad and astonishing numbers.)

Lawyers’ overall take on the millennial impact on law firms is positive. Sixty-six percent of associates believe that millennials are transforming law firm culture and policies for the better, while—perhaps surprisingly—a near-majority of partners agree (exactly 50 percent).

Roy’s Reading Corner

On Big Law Partnerships: The Major Lindsey survey also said that 40 percent of associates want to become a Big Law partner—even if only about a quarter of associates want to be partner at their current firm. That may be difficult if Baby Boomers never retire, which a story by Elizabeth Olson for Bloomberg Big Law Business says might be happening.

From the story: “Clients tell me all the time—65 is the new 45,” said Thomas Clay, a principal at Altman Weil, a management consulting service for legal organizations. “People do not want to retire.”

On Big Law Competitors: Ernst & Young made a lot of headlines when it purchased UK-based legal managed services firm Riverview Law last year. The Big Four accounting giant just made another big play in the alternative legal services field by purchasing Thomson Reuters’ Pangea3 Legal Managed Services business. A competitor of UnitedLex and Elevate, Thomson Reuters last year said the market for alternative service providers like its “LMS” offering was $700 million in annual revenue. The business has 1,000 legal professionals in eight locations on three continents, EY said in a news release.

“This new enhanced offering will make EY one of the leading professional services organizations for global legal advisory services and legal operations services, including legal function advisory, managed services and technology,” Mark Weinberger, EY Global Chairman and CEO, said in a statement. “The acquisition is an example of how EY is working to provide clients with holistic solutions, which are enabled by technology.”

That’s it for this week! Thanks again for reading, and please feel free to reach out to me at rstrom@alm.com. Sign up here to receive The Law Firm Disrupted as a weekly email.