Marc Tracy, my guiding light (editorially speaking), wrote a postrecently, "The Great Rearranging Hits Wall Street". He discussed theessential disappearance of the investment banking industry, and as aresult, the “great rearranging" of the financial services industry, inwhich savvy entrepreneurs and smaller banks stand to gain.
Well, there’s another great rearranging going on, and it’s in “BigLaw”. That’s the colloquial expression given to the 250 largestAmerican law firms, with about 15 of them having more than 1000lawyers. Or used to. Lawyers haven’t been immune from what’s beengoing on in the economy, and Big Law is attempting to adjust in anumber of ways--ways that, again, look primed to benefit smallbusiness.
Marc touched on that also when he recently wrote about Skadden,Arps, Slate, Meagher & Flom LLP, among the biggest of the Big Laws,"Telling Employees To Take A Hike--For A Year". Skadden is offering topay rising associates in the firm $80,000 to take a year off so thatthe firm doesn’t lose them to a rival law firm, which would be likelyto happen even if they had to take a pay cut, but at the same time cansave money by not paying overtime and perks.
But that’s just one way Big Law is reacting. The ABA Journalreports that for the first quarter of the year approximately 7,000attorneys and staff have lost their jobs in addtion to cancelledsummer programs, postponed first-year associate start-dates, and paycuts across the board including partners. Not a pretty picture for the43,000 imminent law-school graduates about to enter the legal jobmarket.
Marc has pointed out on numerous occasions that recessions canactually prove a boon to innovation and to small businesses. And suchis the case for the legal business.
We’re seeing stories about some of those graduating law students,"Unable to Find Jobs, Law Grads Hang Out a Shingle". And stories about"Wall Street Lawyers Dumped for Lower-Priced Boutiques". (A “boutiquelaw firm” is a law firm of about 50 or less attorneys that specializein only a few areas of the law). And even for the “larger” small firm(those with less than 300 lawyers), Larry Bodene on his Law MarketingBlog reports, "Big Corporations Hiring Smaller Law Firms".
So what does all of this mean for us small business owners? I can’tsay it better than Seth Godin did in his brilliant blogpost, "Small isthe New Big", which the recent recession seems, if anything, to havemade only more right-on and prescient. And if all this seems prettyobvious to you, Seth wrote this in June, 2005.
Jerry Kalish is founder and President ofNational Benefit Services, Inc., a Chicago-based employee benefitconsulting and administrative firm that serves private-held companies,publicly traded companies, and public sector employers. He blogs atThe Retirement Plan Blog and can be reached atjerry@nationalbenefit.com.
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