Not too big to fail: the end of BigLaw?

Recessions typically force businesses to tighten their belts and make some temporary changes as they wait out the storm.  But doesn't this one seem different?   Doesn't it feel as though it is reaching formerly untouchable sectors of the economy and encouraging a willingness to completely rethink the way things have always been done? One such example is big law firms.  Check out Douglas McCollam tearing down the current big law firm model in the WSJ:

At bottom, what’s in question is the whole economic edifice of the modern American law firm. Like the pharaohs of old, big firms are enamored of constructing pyramids with an ever-widening base of associates and nonequity partners toiling on behalf of a narrowing band of equity partners at the top. Increasing a firm’s “leverage”—as expressed through the billable hour, one of the most pernicious creations in the annals of commerce—has been the key metric driving profitability at big law firms over the last generation.

Along with the growth and "hubris" that has created international legal institutions that rival the size of some of their larger clients came excess:  now junior associates in Boston and other major cities are making $160k to start, plus bonus, and are often billed out at $300 - $500 per hour -- rates which used to be reserved for partners -- making million dollar partner salaries commonplace.

I am certainly not suggesting that the big law firms are going away.  However, businesses are rethinking the model in light of this deep recession and what they want out of their relationships with their lawyers.  There will certainly be some changes going forward.

This is particularly pertinent to startups and small businesses.  Jason Mendelson, co-founder and Managing Director of Foundry Group, has written extensively and convincingly of the effect on startup companies from a venture capitalist's perspective in an entire series of blog posts called Law Firm 2.0.  These are definitely worth a read; there are a lot of lawyers out there - myself included - who are seeking new ways to accomplish our clients's goals from their perspective, not the lawyers's.

What do you think?  What would you most like to see from your lawyer?

UPDATE:  It seems McCollam's Op-Ed and the discussion about Law Firm 2.0 has struck a nerve.  Is there actually a big difference of opinion here?  Having worked at big law firms, I have seen a variety of views.  Few were in favor of maintaining the status quo, but each had a different perspective for "fixing" things depending on where they sat on the pyramid.

What do you see as the real debate, and where do you see the fault line?