Noam Scheiber

great question. the scholarly debate on this subject has been deeply divided. but i think the emerging consensus is that i would score.

from a purely economic perspective, it's probably a good thing. it was economically inefficient - because of the irrationalities in the system, lawyers and big law firms were paid more than they could justify, output wise. which attracted to many smart, productive people into the legal profession and siphoned them away from other professions, where it would have been more efficient to deploy them. on the other hand, as i note in the piece, the beauty of the big law model was that it served as a psychological safety night for generations of college grads. you could go off and try your true passion, knowing that a respectable upper-middle class existence awaited you via law school if things didn't work out. the loss of that safety net is a bit of a bummer. but it's hard to say it justified the bigger economic distortion.

yes, no question that people have been predicting the decline of big law for a while. i think there are a couple of data points that suggest this time is different. to my mind, the most eye-popping statistic is the NALP 9-month-out-from-graduation employment numbers for jobs where you need to pass the bar. it was around 75% deep into the recession. today it's 64%, which i think is the lowest number since they starting keeping the data. obviously that's not all big law jobs, but it's clearly suggestive. i also think the degree of sophistication on the part of corporate clients - in vetting their legal bills - is highly problematic for big firms and something there's no turning back from. many now hire consultants to pore over their legal bills for them. see this WSJ piece: http://online.wsj.com/article/SB10001424052970203400604578070611725856952.html my sense is that we'll see increasing atomization in the legal profession. as i mentioned earlier, the economic rationale for the big firm was essentially one-stop shopping. but with clients more sophisticated about doing their own shopping for legal services, they're feeling increasingly comfortable going out and hiring specialists on an ad hoc basis, when they need them. then using a more commoditized approach when they don't. (i mentioned axiom earlier as an example of the latter: http://www.axiomlaw.com/Images/Attorneys/001081201Axiom.pdf on your point about a committee that decided which clients to accept - this wasn't a standard conflicts of interest thing. obviously every big firm has something like that. this was a pedigree thing - they'd turn down clients if they didn't think they were classy enough, for lack of a better word.

thanks! very kind. yeah, to be honest, the point of the piece was really to pull back the curtain on a big firm and show people how it works in practice. the broader economic arguments are important, but they've clearly been out there for a while, and i didn't think of myself as advancing the ball on ton there. it was more the backdrop for my piece than the point of it. i think there's a risk to overgeneralizing from mayer brown's experience. but, as i say in the piece, in a variety of ways it's a firm that's above average. for example, from speaking with a few dozen people at other firms, i get the sense that there are much, much more cutthroat firms out there. also, i think mayer brown is representative of a kind of limbo state that a lot of firms will find themselves in over the next 10 years or so. they're not going away tomorrow, but they're certainly feeling a lot of cost-pressure from clients. and they're struggling to figure out how to adapt to that. paul theiss, mayer brown's chairman, kept returning to that point - albeit to note that his firm was figuring it out. he referred to it as "the drive for efficiency," which is kind of a tedious, flack-generated term. but the fact that they've institutionalized it as such tells you how preoccupying it is for them. and i saw every indication that it's the same way for many of their rivals.

very good question. i think he's a big believer in the safety net, but with a genuine streak of deficit hawkery mixed in. in my book i wrote about how sometimes peter orszag, obama's first budget director and an outspoken deficit hawk himself, would go into meetings with obama, where every other principal was basically opposed to what he was proposing. and yet somehow orzag's position would carry the day. that suggested to me that obama felt the deficit-hawkery in his gut - probably to his detriment during his first term. on the other elements of neoliberalism - deregulating financial markets, say - i don't think obama feels it very deeply. i just think he periodically comes under the sway of seemingly brilliant people who encourage this stuff. if obama has a characterological weakness, i think it's for big brains.

i think the future of commercial law practice is with boutique-y firms. they don't need to charge nearly the same rates to justify their existence. the old rationale for big firms was that the big corporate clients weren't sophisticated enough about the legal business to be able to shop for their own experts in a variety of legal sub-fields - litigation, corporate, bankruptcy, real estate, etc. so they were willing to pay a premium for the one-stop shopping advantages of a big firm. but i think that rationale is falling apart. legal departments of big corporations are getting much more sophisticated in their shopping for legal services. (sometimes they even hire consultants to help them decide who to hire and how much to pay them.) they can figure out the right boutique to hire these days. i would be frightened of the debt too. my gut says if you wait 5 years, the price of law school will come down significantly - certainly in real terms, but probably in nominal terms too. as i said earlier, it's the florida condo market in 2006. the air is hissing out of the bubble. the sellers (in this case law schools) just haven't accepted the realities of the market yet.

I know very few practicing lawyers - at least those at big firms - who are happy. Most of the happy lawyers i know - and many more of the ones i interviewed for my piece - have left big law. Having said that, there are exceptions. I did speak to a few who just happened to find the right firm, or the right niche in the right firm, and it clicked for them. For example, you encounter people who went to litigation-only shops like Quinn Emanuel, who seem pleased with the decision. No, i don't think the two parties are communication. it's basically all gamesmanship at this point. but you can't blame them equally. the GOP has simply decided that it's interest lies in not governing, and in making it impossible for Democrats to govern. not a ton the other side can do at that point.

I think the business model is collapsing because of increased transparency in billing/pricing. Corporations are able to see what they're paying for in more detail than ever before when it comes to legal services, and they don't love what they're seeing. Increasingly over the past decade or so, but especially since the recession, they're simply refusing to go along with it. The best example is paying $300 an hour for the continued legal education of a first or second year associate who just doesn't know anything. That is a dying institution. It's of course possible that the current downturn is a product of the recession, but certain numbers suggest otherwise. According to NALP, the percentage of law grads who find a job where bar admission is required within 9 months is at its lowest ever - significantly lower than it was midway through the recession.

good question. yeah, i'm not really wedded to the 20 firm number. a prediction like that is by it's nature speculative. and if i were rewriting the piece now, i'd probably tone it down because it's been more distracting than it has been illuminating. the bottom line is that there are some big structural changes afoot. whether that means we end up with 20 big firms or 50 firms on the other side of it, it's tough to say. but whatever the endpoint, it's hard to dispute that the industry is facing considerable economic pressure. incidentally, this was never in dispute in my conversations with the mayer brown brass. the firm's chairman freely admits that things are never going back to the way they were before the recession. or, at least, that he needs to operate as though they aren't. if all we're quibbling about is how many fewer firms can prosper in the world, not the fact that it will support substantially fewer, i don't think we're quibbling about very much.

I think it would be a real mistake to install Summers at the Fed - and I say that as someone who thinks he did some good work as an advisor to Obama during the first few years of his administration. Here's my most recent post about Summers v. Yellen for Fed chair: http://www.newrepublic.com/article/114009/larry-summers-fed-chairman-over-janet-yellen I think the ECB is so culturally wedded to tight monetary policy that it's hard to be optimistic about Europe in this regard. We can lecture them over and over - as US policymakers have - but this is really about their own historical demons.