In Addition to AI Chatbots - Private Equity Could Be Coming for Your Law Firm

The buzz in media is all about how AI chatbots could overtake myriad functions in the practice of law. Also there is the extensive coverage of the angst about layoffs and performance-based terminations because of the slowing economy. 

Meanwhile there hasn't been much attention to the employment implications of non-lawyer-owed law firms. Already Utah and Arizona have loosened regulations on that. A post on Fishbowl Big Law takes up the issue. The likely owner, some responses speculate, could be a private equity firm. Here is the thread.

PE is known to blow up what is in order to max profit. Therefore, the law firm sector as we have known it could mutate into a business that is quite different. 

For example, the number of partners and associates needed could be reduced and how they are "allowed" to approach their tasks could be made more efficient. With the resulting glut of talent compensation could be significiantly reduced. The established power system? That could go poof. Lawyers would all be working for The Man. No longer are they the shareholders with the authority. 

Ironically it could be those law firms with the most experience in PE which could be looped into this transition. They would be handling the legalities of the transactions. According to FirstHand the top 10 are:

Kirkland & Ellis

Simpson

Latham

Skadden

Cravath

Watchtell

Ropes & Gray

Davis

Paul Weiss

Weill.

Then, in time, if the ownership model yields enough profit, PE could be coming for those 10 law firms themselvs.

Meanwhile the trend to monitor for insight is how PE is transforming healthcare. As Medical News reports, it already owns about 25% of hospitals. 

Not only does that directly impact functions and therefore manpower in hospitals. It can indirectly create new entities, some of which become competitors. Among those have been urgent care centers. Those centers, some contend, are wiping out small stand-alone medical doctor practices.

There could be similar upheaval in the business of law.

What I recommend to those I coach is to keep on top on how your industry can make more money or stop losing too much. That's where the perils and the opportunities are. 

Human Resources Communications and Intuitive Career Coaching. Award-winning book author and article ghostwriter. Confidential complimentary consultation. Then fees customized for your unique budget.

Please make an appointment with Jane Genova at janegenova374@gmail.com

Comments

Post a Comment

Popular posts from this blog

Kirkland & Ellis Reported to Be Building Moat Around Firm to Deter Poaching of Stars

  "Kirkland gives partners more than half their pay after the end of the year in which they earn it. For partners who depart to other firms, the new policy gives the firm discretion to withhold that pay, according to a person familiar with the change."   Bloomberg Law , July 18, 2024 Scrapper Kirkland & Ellis is no slouch when it comes to protecting its business - known as the most successful law firm in the world.  Paul Weiss  certainly got in the way by launching not one but two high-profile raids on its London office stars. Gone were brandnames ranging from Neel Sachdev to Roger Johnson. In addition, Latham poached Matthew Cohn. If there is such a policy, as reported, then Kirkland & Ellis has created what could be an effective deterrent for both partners' leaving and potential poachers' approaching the star lawyers. And it all comes downs to money - big money: That is, both what partners would leave behind which they have already earned and how much ...
Read more

Akin Gump Julia Ghahramani's March 2021 Cocaine+ Death - So?

   It had been way back more than a year ago that first-year associate at law firm Akin Gump Julia Ghahramani died from cocaine laced with fentanyl. Yet that story keeps resurfacing.  This week  RollonFriday  revisits it. And  Reddit Big Law  considers the issue if the energy from cocaine is what's making possible those 2,500 hours billed in law firms.  Is what's keeping this on the radar the hunch that use of the illegal substance cocaine is common among those practicing law? After all, in addition to being an energy-booster, it provides a nice reward for such hard-working lawyers. Also, they have the earnings to afford it. Most of the rest of gunners have to stick with boozing. So, why not?  The reality might be setting in that the death could simply have been an aberration. Think about it this way: Ghahramani had bad luck in her alleged choice of dealers. Others might be able to exert more scrutiny in overseeing the content of the il...
Read more

Up-or-Out: McKinsey Raises the Pressure, In Contrast Some Law Firms Ease It through Nonequity Partner Tier

" McKinsey & Co.  warned some US consultants last week they are running out of time to win promotion, raising the 'up or out' pressure on staff as the global consulting industry struggles." - Abovethefold Article in Bloomberg , March 27, 2024 This is yet another sign that once-iconic McKinsey is a professional services firm in trouble. One challenge is overcapacity of manpower. It has also warned about 3,000 consultants about "concerns" regarding their performance.  In addition to the overall slowdown in management consulting, McKinsey faces scrutiny from myriad sources about its client list including assignments with China and Saudi Arabia. There also has been that hatchet-job book "When McKinsey Comes to Town." The most damning aspect of the expose is that former employees dump on it. Posts on the professional anonymous network Fishbowl Consulting aren't optimistic about a turnaround at McKinsey or at other players in that sector. In cont...
Read more