gravitating to corporate model:
September 15, 2003,
Chicago Daily Law Bulletin
Shifts in the practice of
law are putting pressure on law firms to abandon the traditional
partnership model and move to "corporate" styles of management,
according to two Northwestern University academics.
Brian Uzzi, an associate professor at the Kellogg
School of Management, and Ryon Lancaster, a doctoral
candidate at Northwestern, have co-authored and are preparing for
publication two related studies, both of which argue that the legal
profession's partnership model is losing ground to formal, corporate
Traditionally, law firms have
relied on the partnership model, where young attorneys work long
hours hoping to gain equity in the firm. Under the partnership
model, if attorneys do not make partner, they leave the firm.
In their studies, Uzzi and Lancaster say that
firms are restructuring their offices to look like businesses, where
employees work a certain amount of hours for a certain amount of
" It works just like a corporation:
You come in and you have something to do and you get it done by the
end of day. If the corporation loses work, those people get shed.
There's no implicit agreement that the staff has any equity in the
company," Uzzi said in a phone interview.
While the partnership model is more collegial and informal,
the corporate model is formal and efficient, which helps law firms
manage huge staffs, Uzzi and Lancaster wrote.
" The problem is that, with a law firm, when you want to
promote a whole bunch of people to partner, you have to have hire a
whole bunch of associates who will work for that partner," Uzzi
" That means that for a law firm to
be competitive now, it's got to have scale -- it's got to be big.
And once you get big, you have huge organizational problems just
like in corporations," he said.
can be seen, Uzzi and Lancaster wrote, in the rising number of
lawyers who work as salaried employees at law firms -- not as
colleagues en route to partnership.
According to the studies, in 1968, the largest law firm in
the U.S. employed 169 lawyers. By 1999, the largest U.S. firm, Baker
& McKenzie, employed 2,343 lawyers. Baker & McKenzie was an
early pioneer in the use of the corporate model, Uzzi and Lancaster
These changes are occurring, Uzzi
and Lancaster said, due to a convergence of several trends,
- Expectations of young
attorneys that their employers give them a better work-life
- The rise in the number of women
and minority attorneys, many of whom fear entrenched "old boy
networks" in the partnership model. This pressure is compounded by
clients' demands that firms reflect more diversity in the lawyers on
- Mergers in the business world,
which has drained the client pool in two ways: First, by reducing
the overall number of available clients, and then reducing it even
more as corporations build their own legal departments.
This last factor is crucial, Uzzi said.
Citibank, for instance, has a legal department that is larger even
than Baker & McKenzie.
agreed with these findings, but said they were not certain that the
change was for the best.
" I'm not sure
what the answer is, because law is still a profession and it has to
be different from corporations. But I do think something has to
change," said Gail H. Morse, a partner at Jenner & Block and a
board member of the Women's Bar Association of Illinois.
Daniel A. Cotter is counsel to Unitrin Inc.
and chairman of The Chicago Bar Association's Young Lawyers Section.
He said that while the number of young attorneys who look to
corporate-style jobs is increasing, they are still a minority.
" I get the sense that most young attorneys
want to make partner, want to be a leader in their firm," Cotter
Dixie Lee Peterson, a former chair of
the American Bar Association's Section on Law Practice Management,
thinks that the trend toward nonpartner-track positions -- which she
refers to as "permanent associates" -- may actually lock women and
minorities out of upper management as entrenched partners lock
themselves into management of the corporate-style firm.
Peterson said, "The cost may be that we will
see fewer women in ownership positions in this trend, because they
will not be accommodated in the ownership structure."
Peterson is also a member of the Women's Bar
Association of Illinois and is deputy general counsel of the
Illinois Department of Children and Family Services.
Amy M. Gardner, a first-year associate at Skadden, Arps,
Slate, Meagher & Flom (Illinois), said she was not sure that
young young attorneys expect their employers to give them a better
work-life balance as Uzzi and Lancaster suggested.
" With the economy the way that it is, it's a little harder
for younger attorneys to be anything other than grateful that they
have a good job at a good firm," she said.
Alan J. Schumacher, a shareholder at Pretzel &
Stouffer, said if your practicing law based on the model used by a
law firm, "you're not going to be happy anyway."
Pretzel & Stouffer has long used a more corporate style
of organization, Schumacher said.
said the partnership model -- when applied fairly -- is the only one
that allows lawyers to enjoy the rewards of their hard work.
Corporate models only create divisiveness in firms, Morse said.
" It just sort of stigmatizes those who just
want to be 'employees' versus those who are more entrepreneurial. It
creates a class system," she said.
acknowledged the point, saying that the changing trends in law firms
is causing a clash of cultures.
also a huge difference in that lawyers have always felt that once
you passed the bar, you're as good as anybody else practicing law.
Now, you're dividing people into hierarchies and that's creating
conflict. There are some real counter-pressures that make this
pretty interesting," he said.
Shuey, a solo practitioner based in the suburbs of Denver and
another former chair of the ABA's Law Practice Management Section,
said the changes Uzzi and Lancaster describe are all but inevitable,
and lawyers have to be prepared to deal with them.
" The realities of the business world are intruding into
the profession and there's not a thing that the profession can do
that's going to stop that train. The reality is that the forces that
are driving that kind of model are bigger than the legal
profession," Shuey said.
The studies are
"From Colleague to Employee: Determinants of Changing Career
Governance Structures in Elite U.S. Law Firms" and "Changes in the
Social Organization of Large Law Firms and Their Financial