Time to get something off my chest: US firms just have too good a press.
Their arrival in London at the end of the 1990s may have brought about a welcome shake-up, but we’ve seen precious little in the way of innovation since. For all its undoubted financial muscle, US BigLaw has shown virtually none of the innovation of its industrial or technology companies.
Here are five things that depress me most about the US legal market.
1 Lack of financial disclosure. The wink-and-nod approach of many leading US firms (see analysis for some of the culprits) to their financials is not worthy of the major businesses they are. Peter Kalis of K&L Gates is embracing full transparency – we run a video interview with him here– and is seen as downright revolutionary in America. Good on him, but this level of disclosure has not been extraordinary in the UK for years.
2 A craven attitude to PEP from too many US media outlets (the irreverent Above The Law excepted). There’s still not enough questioning of PEP as a metric in terms of a well-run business. I get the argument that it’s a quick and easy yardstick – a share price, if you like – but it’s a share price that can be easily rigged. On a related point, it is actually healthy to question City pay levels without being labelled as a dangerous Trot. Junior associates are furious when this happens since they feel they put in the hours, but sometimes the lack of perspective exhibited by City lawyers on this subject is dispiriting. It’s not just the press to which those associates will have to justify this level of pay, so firms had better get used to it; you’re not going to get many UK clients agreeing that they love funding a newly-qualified lawyer £65,000 for their input. By contrast, US clients don’t make waves on the topic.
3 Conservatism in law firm structures. At the very least ABSs have made UK law firms confront organisational change. This is healthy. It also undercuts the corner-office syndrome.
4 Lack of client pressure to change billing habits. Richard Susskind has documented some client-side innovation, but it’s hardly widespread; the hourly rate has an unshakeable hold on US legal culture.
5 Brobeck, Heller, Thelen Reid, Howrey, Coudert, Dewey. All pretended they were financially stable until the moment of collapse, and then chaos ensued. Post-Dewey, those white-shoe law firms that refuse to disclose might just want to consider that the game has changed; like diversity, financial transparency is not mandatory, but it is an ethical choice.