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Sunday, June 7, 2009

Shock and awe

As an alumnus of a big-bucks law firm, I watch in amazement.

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“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.”


This is all a natural consequence of the path these firms choose to take.

Lawyers may reasonably wonder if Say's Law hasn't been repealed somehow. In past times of economic crisis, lawyers have fared reasonably well, and there must be some increase in the bankruptcy work going on in this one. But maybe some will end up like a former Dallas mortgage banker that I met the other day: as the driver of a Super Shuttle at DFW.

Stoel Rives is a minnow compared to how large the top 50 American firms have become.

I used to set type at the company which produced Stoel Rives engraved stationery in the 1980s. It got to be a real challenge to fit all of the partners in the letterhead and down the side. Barely any room left over on the sheet for a letter when all was said and done.

Like most big firms, they abandoned that practice in the mid-'80s.

One of the delightful ironies of the current economic malaise affecting law firms is that their regular banks -- for the large firms, large banks, such as Citibank -- won't lend to them because the regulators are watching the quality of their loans. Why are the regulators watching the quality of their loans? Because they made too many dodgy loans and bought too many squonky derivatives. Who created those derivatives? The big law firms who have found their credit shut off.

I've often wondered why big law firms don't take the advice that they give their clients: be conservative and have adequate cash reserves to weather storms. Stoel Rives was one of the few to follow that advice: it has long been rumored to have three months' expenses in the bank, as cash reserves. Most firms aren't so provident.

I watch in bereavement.

How do any of the 'remainders' think they are better off or any different? They are as goners as those who went and are gone, all non-surviving the same except for individual places in the sequence ... like concentration-camp inmates elatedly counting the day's droppings and corpses as if tomorrow isn't their turn next.

... meanwhile, the back-side fence is open for any who choose to walk out into the fields of manual labor and grow their own, food to eat grubby-fingered ....

Here's some daily dismal that'll wear down the hardiest denier.

And here's a list of attorneys headed to life imprisonment, arguably, (lucky(?) for them their type of amoral mental retardation is inhuman to execute), and taking the hired-mouthpiece 'industry' with them ... but, but, but -- without some attorneys left as prosecutors how could all attorneys be incarcerated ??? (Hint. One word: roving mobs of attorney haters. Got enemies? Got kids?)

.Place du Carrousel from 21th August 1792 to 7th May 1793 with interruptions.

Tenskwatawa's attorney hatred is unjustified. You might not like some of the clients that some attorneys represent, but I bet you'd like living in a country without rule of law even less (ask a Somali if you're uncertain on this one). Though if you prefer rule of Jacobins with guillotines, go for it.

Regarding law firm credit, my understanding that the reason most large law firms operate from day-to-day on a line of credit has more to do with the taxation of of partnership income than with a lack of fiscal conservatism. But I'll leave this one to the author of the blog, who knows more about tax law than any of us.

Back twenty years ago, I remember when all of my old high school buddies suddenly switched majors to business because they were told over and over that MBAs were layoff-proof. Naturally, this was gibberish, so then the big El Dorado was pushing for a law degree when the market was flooded with MBAs. I'm finding it very interesting that several universities in my area are pushing the "executive MBA", because not only is having a law degree not a guarantee of surviving a downturn any more, but law degrees are perceived as "too much work". The next ten years should be even more interesting as all of this shakes out, and not just because I have a personal vested interest in several lawyer friends and relatives doing well.

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