TNR writer sticks to his guns: Big Law is dying

There seems to be a battle between former New Republic writers now working for the Washington Post and current New Republic writers who believe that Big Law is on the ropes. Look here and  here for earlier posts, but basically TNR's Noam Scheiber -- not a name known to me -- contends that Big Law's business model is dead and almost none of the major firms that have relied on that model for decades will continue to do so. Nor will the big firms bounce back:

This is why, to move to the third objection, it doesn’t strike me as very plausible that the industry will simply bounce back the way it has after previous recessions. The world I describe in the piece is basically the world the legal profession has been drifting toward for two decades.* In fact, there are good reasons to think the trajectory has taken a turn for the worse lately—that the legal profession won’t even grow at the same rate as the economy. For example, legal expenses didn't used to be a big enough share of a corporation’s bottom line to be worth vetting very closely, which encouraged firms to pad their bills. Now, according to The Wall Street Journal, clients are using sophisticated legal software to do the job for them, allowing them to effortlessly flag all sorts of dubious charges. That can’t be good for big law firms.

Scheiber's view that the practice of law will change in response to changes in technology and economics -- especially the practice of law on the multi-million dollar corporate scale, where even small efficiency advances can save millions -- shouldn't be shocking. Contract attorneys already are seeing jobs disappear or be shortened by some of the technological changes Scheiber talks about:

Similarly, corporations now have more alternatives to hiring law firms than ever before—like contract attorneys and the “legal process outsourcers” who procure them—and they’re using them increasingly often. Between 2004 and 2010, according to data collected by Bill Henderson of Indiana University, law firm employment dropped by 4 percent, or about 47,000 jobs. During the same period, employment in “all other legal services” (like outsourcers) increased by 50%, or about 8,000 jobs. Obviously, some of that change was driven by the pinch of the recession. But it’s hard to imagine clients reversing these trends as the economy recovers. Recent history suggests that outsourced jobs tend to stay outsourced, whatever the original reason for the move.

All in all, I think it trends out as bad news for everybody thinking about spending -- or who already spent -- lots of money on a law degree. The Big Law jobs are going away, and the new, efficiency- and technology-based model is going to provide more contract attorney jobs, but not necessarily with the kind of hours and rates that used to make contract work attractive, to the extent anything did.  How's that exit strategy coming?

Hat tip to Instapundit for this article.