Big Law Moats: Refinforced and Eroding

 The quest in business is to create a moat. Essentially that's a competitive advantage that is difficult to replicate. It positions the business as the go-to.

And that's the distinct edge Big Law firm Kirkland & Ellis has maintained. Have a high-stakes legal matter? You want K&E. The branding is that K&E always wins. In coaching former employees I heard over and over again that, even though they were relieved to be out of the New York office (Chicago wasn't as stressful), they respected how the firm manages to outfox the opposition.

But moats need to be reinforced. Recently K&E did just that with investing $500 million for a proprietary AI platform. That will capture and store the total results-oriented genius of K&E case management. No longer will their lawyers have to start from scratch. 

One seminal benefit will be to reduce the fee-for-service. FT reports that banks, which are major consumers of Big Law services, are demanding a piece of the cost deflation from using AI. K&E can be an early adopter in rolling out such alternate billing approaches. You got it: The billable hour is on short time.

Eroding, though, has been the moat established by law firm Paul, Weiss since its founding. That's its mission of public service. From that came the unique prestige of being a servant leader. As The New York Times documented, that aura went kaput. The highly commercialized mindset of now-chair Scott Barshay is decimating the moat. 

Currently Paul, Weiss has reconfigured into a mere generic in the category of Top M&A Law Firms. The names of the star partners on the marquee might provide a bit of differentiation. But, on the other hand, maybe not. Lots of brilliant dealmaking lawyers are around.

Internally at Paul, Weiss that might not sit well.

It's not unthinkable that within a few years Barshay could step down from the chair role and remain the rainmaker partner. By 2028, former chair Brad Karp's contract is up and as the memory of his controversial decisions/actions fades, he could re-take the role of progressive game-changer. That could move along without any leadership title. The role of "chair" could be re-thought.

So, the historic moat could be restored.

Meanwhile, overall, Big Law is in a frenzy of competitive turmoil. Money will only go so far in landing stars in the talent war. How to prevent client churn? What kinds of new profit centers can be created? 

As always, firms will be analyzing the K&E model. After it resets after its existential crises Paul, Weiss could cherry pick what to re-graft on from its past.

In coaching, I guide clients to the importance of a unique value proposition. Glut is just about everywhere.

Careers. Forget all that. It’s about earning a good living, no matter what.

Complimentary consultation with Jane Genova, StreetSmart Coaching (janegenova374@gmail.com)


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