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

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