Usually, I start a post by typing the title and I go from there. I know what I want to say. This time, I’m not sure where to go or what to title the post.
Two tidbits of information came to my attention today, both published. Above the Law reported last week that Jenner & Block has recently de-equitized more partners. Today’s chicagotribune.com reported that Seyfarth Shaw announced that it expected 2009 profits to decline by five to seven percent. This public announcement is perilous because of the effect it can have on partners joining the firm or leaving it. A missed target could easily trigger the law firm equivalent of a run on the bank. The peril of such an announcement is obvious, making me wonder why the announcement was made at all. What benefit would outweigh the risk? One risk that would outweigh it is the death by a thousand rumors, internal or external, the firm might be experiencing or anticipating in the interim.
Do these two things provide broader insights other than into just these two firms? Perhaps not. But these are good firms, formerly rock solid. But neither piece of information is consistent with rock solid status. Which leads me to wonder (and boy do I hate to sound like Donald Rumsfeld), if we know this about these two firms, what do we not know about all the other like firms (say, AmLaw 25-200)? It does suggest to me that firms continue to tinker at the margins but still have not come to the realization that survival depends on embracing a new business model. I was going to suggest that this isn’t really surprising, but at some level, that’s like suggesting that it is appropriate to wait for the whole house to be ablaze before trying to put out the fire.