Look, lawyers and accountants have their role in business: the one keeps you from making mistakes in understanding the law and what you can and cannot do, the other lets you know what your resources are and what you can do with them.
The problem arises when lawyers and accountants take control: they are, generally speaking, only qualified to provide support services, not generate value added. To do that you need talented folks who can take an idea, make it into a product and get it out there to the customers in such a way that they are seriously pleased with products and services.
Hence this article in the New York Times pleases me.
As the apocalypse on Wall Street ripples out into the larger economy, a thick red tide is lapping at the once-impregnable foundations of New York's corporate law firms, threatening to turn the industry — and with it, some iconic city characters — into an endangered species.
Well, yes: they are a support services industry, and when their clients go tits up, they should be immune?
Actually, it's true; the corporate law firms of the past years are an endangered species, and rightfully so. They provide no value added in todays' economy, and hence: good riddance.
"I hear the stories all the time," Mr. Kowalski, the consultant, said. "Real estate lawyers are honing their skills playing solitaire. Younger lawyers are gossiping all day and scaring the crap out of one another. The head of the corporate department of a major firm just told me that he hasn't billed a minute's worth of work in the last two weeks," he added.
Duh: to reiterate, corporate law companies need functioning corporations to bill, and seem to have realized this first now?
Philip K. Howard, a senior partner at Covington & Burling, another multinational firm, may be the closest thing to a gentleman lawyer that one is likely to find these days. He is courtly, white-haired, civic-minded and blessed with an aristocratic pair of arching eyebrows. While he declined to speak directly about White & Case ("I'm not really interested in the business of the law"), he touched on the firm's current troubles by suggesting that as the bottom line increases in importance, the traditional role of the lawyer as a trusted counselor slips away."To the extent that lawyers are simply churning out the same problems one after the other and are treated as factors of production to be laid off or not because of market forces or marginal declines in profitability," he said, "the emotional and professional commitment that goes along with being an adviser and a solver of problems begins to diminish."
I daresay that that the "traditional role of the lawyer as a trusted counselor" lies largely in the imagination of lawyers to justify expensive relationships that added nothing to the bottom line of the companies being "advised".
The classic New York law firm is a highly developed ecosystem populated by certain native species: there is the brash, aggressive partner leveraged by lifestyle and, rising from below, like a creature out of Darwin, the ambitious associate who pulls all-nighters doing scut work in hopes of one day taking the chair.But the natural order of this world has been set on end by the economic crisis and the possible disappearance of fixtures like the pyramid system (under which associates are thrown en masse at certain cases, fattening the fees), and the billable hour itself (increasingly replaced by flat rates or retainers in a client's market). The tectonic plates have begun to shift in a nauseating manner, bringing fear, ambiguity and psychological scars.
As I've said before: parasites, not creators of value. The highly-developed "ecosystem" was nothing more that providing services: given the nature of the problem, such value-destroying functions like throwing lawyers at problems in order to fatten the fees and the serious problems associated with calculating fees based on billable hours (which the client rarely can control), the collapse of this system, which generated a lot of income, should come as no surprise. After all, a lawyer's income is someone else's cost, and the system has, fundamentally, been abusive...
I hope that there are scars: otherwise, there won't be reminders that those days are over.
"For the first time in their lives, people feel sort of useless. All of a sudden, you can go to lunch for two and a half hours and really not be missed. It's a blow to the ego. You're talking about people who have never really failed."
At White & Case, the tensions have become so fierce that some people now fear staying home even if they are sick. Market forces have replaced "the social contract," a top partner there said: camaraderie is "not terribly strong," because "people are very scared."
"When you finally make the partnership, you can walk into a room and certain assumptions travel with you: This is someone who knows what they are doing, who has intelligence and authority," the partner said. "While that's still basically the case, it was a much more collegial place when I first got to the firm. Now it's colder."The loyalty of the institution to its people, and vice versa, isn't really there anymore — it's a different animal from what a lot of us were used to. It's much more of a business now and less of a true partnership. The problem is we're supposed to all be in this together. But at some point, you stop and think: 'Well, maybe we're not.' "
In other words, for the first time, lawyers find themselves unable to pretend that they were the ones who created value: they are not. Failure here should be viewed as a wake-up call for the profession. Welcome to the Real World.
If you want collegiality, go to academics. If you want money, welcome to reality.