‘Why BigLaw firms go down the money hole’ was first published by Ed Reeser in 2015. It is re-posted on Dialogue as a Classic because I have recently been made aware of two Australian law firms that are in difficulty, at least in part, for reasons related to Ed Reeser’s thesis, namely propping up profits per equity point is somehow viewed as a means of maintaining confidence in the firm.   

I said to myself, these insights on origins of the modern law firm are even more apt than when Ed first penned them in 2015. In the past week, I have seen first-hand four substantial Australian law firms sliding further into difficulties because they have not fully understood the omens…..

Today’s post from Ed Reeser introduces the first in Dialogue’s occasionakl ‘Classics’. A ‘classic’ is a timeless message about BigLaw business model firms and their clients.

The idea for the message that growth is not a solution to the problems a law firm faces stems from  Growth won’t solve your firm’s problems, a powerful article in The Am Law Daily in 2015. Ed’s interpretation of the message has strengthened with time, hence the designation ‘classic’.

Ed’s views on a recent (February 27, 2017 ) American Lawyer article shed additional light on one of the first open commentaries by (BigLaw) firm leaders about the changing landscape of equity partner compensation. The topic is complex and nuanced in ways that are much deeper than any one article can cover. The real value is that finally it is being talked about in a more open and honest way than ever before, and that is a good thing. But a lot churns just below the surface, and isn’t discussed in the article by firm leaders, for understandable reasons.