Steve Kovalan and Nicolas Bruch, of ALM Intelligence, at LegalWeek in New York.
One point they underscored how much in-house lawyers are growing as a force. The annualized growth rate of in-house lawyers is 4.7% compared to 0.4% for the growth of Am Law 200 lawyers.
As they closed their session, Bruch and Kovalan focused on a few salient points around law firms in the AmLaw 200, which are facing a period of high volatility and where over the last three years:
- 61% have seen revenue decline;
- 83% have revenue-per-lawyer decline;
- 85% profit-per-lawyer decline; and
- 67% profit per equity partner decline.
Ultimately, the take-away from the pair was that there will be three groups that bubble to the top during this future phase: specialty regional law firms; boutiques; and the largest of large law firms.
They hedged their bets and surmised that while Big Law is threatened — because much of their work can be commoditized — that in the short run their profits are still very healthy. Nonetheless, the very real threats to those profits that Big Law faces now come from AI and the Big 4 accounting and consulting companies, such as the EYs and KPMGs of the world that are rapidly engaging in the practice of tax, finance, M&A, and labor.