Technological and generational change will radically restructure law firms. Here are some new and better ways to describe the people who’ll work there.
Roughly, the way law firms always worked was this: You have a bunch of experienced lawyers who get a lot of work from clients, so much work that they can’t do it all themselves and they need to hire less experienced lawyers to spend long hours in an office every day doing that work. And the senior lawyers figure out that if they sell these lawyers’ working time to clients for less than they pay for it, they can pocket the profits. The more lawyers and the more hours, the more profit.
Then the senior lawyers discover another bonus: Some of these junior lawyers are also good at getting client work, and they will pay a handsome fee to share in the firm’s profits themselves, and so they do, and they all call themselves “partners.” The other lawyers are called “associates” and they’re eventually eliminated by attrition — some quit, some are fired, some want to become partners but are rejected — and a new bunch of inexperienced lawyers is hired every year so that the cycle can repeat itself.
The critical elements here are:
Partners with paying clients ✅
- Hours of work that need doing ✅
- Associates willing to work long hours ✅
- Associates wanting to be partners ✅
By any measure, this was a pretty sweet arrangement. Then two things happened.
- A pandemic came along that forced lawyers to work from home and re-evaluate their lives and priorities, and many of them decided they didn’t want to come to the office and work long hours and become partners anymore.
- A machine came along that promised to massively reduce the amount of effort and therefore the number of hours required to do client work, meaning there will be less work from corporate clients and less revenue to be generated.
Let’s see that list again:
- Partners with paying clients ✅
- Hours of work that need doing 🛑
- Associates willing to work long hours 🛑
- Associates wanting to be partners 🛑
Now, if you think (as I do) that the generational change in lawyers’ values concerning life and work will prove resilient, and if you anticipate (as I do) that Large Language Models will introduce permanent efficiencies to legal workflow, then you would conclude (as I have) that the way law firms have worked in the past isn’t going to work in future.
(I feel a little like a doctor telling a patient, “You know how you’ve stayed alive by drinking water and breathing air for all these years? Yeah, those aren’t going to work so well anymore, and you’ll need to look for some alternatives.”)
Figuring out how law firms are going to work in future will occupy countless partnership meetings, conference agendas, and consulting engagements all over the legal industry throughout the next several years. Don’t worry if you don’t have all the answers — nobody else does, either (including me). We’re all just getting started.
What I want to suggest today, though, is that figuring out what law firms are going to become requires first letting go of what they used to be. A good start towards accomplishing that would be to abandon the antiquated titles and categories into which we’ve been cramming law firm personnel for the last hundred years.
Throughout all that time, law firms have established and maintained their class structures and hierarchies by sorting lawyers into “Partners” (lawyers with clients and influence) and “Associates” (lawyers without). They’ve extended and reinforced these dynamics by dividing everyone in the firm into “Lawyers” and “Non-Lawyers.” The primary purpose of all these titles was to communicate who had power and who did not: Partner ——— > Associate ———————————————— > Non-Lawyer.
To the extent that law firms must divide people into any categories at all (and I’m open to the idea that they needn’t), surely we can do better than this. What if, for example, we developed a new taxonomy that better communicated the extent to which a person brings value to the firm? One possible such categorization for law firm personnel might use the terms “Core” and “Ancillary.”
A law firm’s “Core” personnel might consist of:
- Professionals with exceptionally strong client relationships that consistently generate high-value engagements;
- Professionals with extraordinary proficiency in a legal field, a business method, a management practice, or a client industry;
- Professionals with less experience but demonstrably great potential to become a member of either previous category.
Notice I said “professionals,” not lawyers, because you don’t need to be a lawyer to be essential to your firm’s success. (Like, obviously.) Also notice that I said “high-value engagements,” not “large volume of billable tasks,” because law firms in the post-pandemic, post-AI world are going to care a whole lot more about value than volume.
What percentage of your law firm’s personnel today meet one of those descriptions? Fifteen percent? Maybe 20? Whatever the number, these are your firm’s Core people. It doesn’t matter if they’re lawyers or not or if they’re experienced or not. What matters is that they’re essential to the firm’s current success and future prospects. They are your firm’s new water and its new air.
Offer these people whatever perks they want, including profit-sharing opportunities and decision-making power, in order to keep them present, engaged, and satisfied. Make their ongoing professional development your top retention strategy. Don’t insult them by demanding they record how they spend their time. But do require them to be in the office whenever feasible, so that they can collaborate and strategize, network and mentor, learn from and solve problems with each other.
Everyone else who contributes to your firm in any measurable way, but does not meet one of the three descriptions above, would fall into the “Ancillary” category. That doesn’t mean they don’t add value. It doesn’t mean they’re not lovely people. It means that their contributions to the firm are either temporary or fungible, or both.
“Ancillary” employees constitute your firm’s external satellite support system. They have no interest in (and no prospect of) becoming Core members of the firm. They don’t need to be physically present in the office and they don’t really want to be. They work on fixed-term contracts that allow them to do other things with their time. But they have specific tasks to perform against clear parameters, and they respect the firm’s ethical and professional rules.
The traditional law firm structure, over-simplified, was a pyramid: Partners above, Associates below (and staff essentially underground). This new law firm structure, also over-simplified, would be two concentric circles: Core people at the centre, Ancillary people surrounding and supporting them.
On the event horizon between these two circles is the one small group that’s in neither category: the firm’s newest personnel. These are Trainees, learning how the firm works and showing what they can do while the firm gives them development opportunities and assesses whether they’re Core or Ancillary. It should take no more than two years for each side to decide what the nature of their relationship should be.