Two stories have dominated the legal industry this year: artificial intelligence and lateral hiring.
I tend to report on the first. But I gained a new appreciation for the musical chairs of Big Law while putting together the seating chart for a private lunch of lawyers I hosted last Thursday.
I tried to make sure lawyers who had defected from one firm weren’t seated next to their old boss. You know, to keep the peace.
We came together at Business Insider’s The Long Play event to talk about what law firm reinvention looks like in practice and how those experiments are changing relationships with clients. LexisNexis sponsored the lunch; I curated the guest list and led the conversation.
We couldn’t ignore the $2.1 billion elephant in the room.
Hours earlier, Weil Gotshal, one of the country’s most storied law firms, had announced plans to wind down after an exodus of high-profile partners. The 95-year-old institution, which made its name handling some of the biggest bankruptcies in American history, couldn’t find a way to save itself.
The table seemed to agree: AI didn’t kill Weil. But the firm’s implosion exposed vulnerabilities that large law firms have always faced.
And it raised a question: Could AI make those weaknesses worse? Or could it actually help law firms become less fragile?
A spokesperson for Weil did not respond to a request for comment.
AI-as-a-tourniquet
Big Law is made up of enormously profitable institutions. Many have survived wars, recessions, and tectonic shifts in the technology that helps their lawyers work. Yet a handful of departures can set off a chain reaction that threatens to bring the whole thing down in months or weeks.
Eric Greenberg, the general counsel of Cox Media Group, argued that law firms have always been vulnerable. But the white-hot lateral market is making them especially so.
“This is really a case where you had a run on the bank and people didn’t want to be the ones left at the firm,” he said of Weil.
David Wang, chief innovation officer of Cooley, saw Weil as a reminder that for all the talk about technology upending legal work, Big Law remains a business built on relationships.
Star partners have outsize influence because of the clients they bring in and keep happy. When a rainmaker jumps ship, a firm doesn’t just risk losing clients and revenue. It can also shed years of knowledge about their businesses and the work they’ve done together.
Avi Gesser, a partner at Debevoise & Plimpton who leads the firm’s artificial intelligence practice, suggested that the technology could act as a tourniquet for law firms. It might not stop a lawyer from leaving, but it could keep the firm from bleeding out when they do.
His firm is increasingly building tools to capture the expertise locked in the heads of its litigators. The bet is that Debevoise can turn that knowledge into an asset belonging to the firm.
Greenberg offered a way of thinking about how this might affect client loyalty.
“It used to be, ‘I got to stick with this person. I love him, and he knows my stuff,'” he said. “Now it’s, ‘I love them, and the firm knows my stuff.'”
‘What do I take with me?’
There’s one problem. Why would a lawyer willingly give away the very thing that makes them valuable?
Sharon Crane, the president of the Practising Law Institute, raised exactly that concern.
“Once I give you everything I know, then if I leave, what do I take with me?” she asked.
Gesser pointed out that partners aren’t necessarily compensated for spending time teaching the firm’s systems everything they know. For firms to make this work, they’ll have to rethink how they reward that work.
Oz Benamram, chief AI officer at the law firm Pillsbury, added another wrinkle. Partner agreements may need a rewrite, too. Departing partners might want to take the playbooks built from their expertise with them. And clients could stake a claim to that knowledge, too.
Then Michael Gerstenzang, the senior partner at Cleary Gottlieb, introduced a twist.
AI might make law firms less dependent on their individual lawyers. But it could also make those lawyers less dependent on the firms.
Imagine you’re a top M&A partner at Cleary Gottlieb. You have deep ties in the corporate world. You bring its biggest deals to the firm.
But you can’t execute those deals alone. You need tax specialists to structure transactions, antitrust experts to evaluate regulatory risks, and employment lawyers to handle compensation issues. “It’s a team sport,” Gerstenzang said.
One of the biggest advantages of working at a large law firm is having all that expertise under one roof.
Gerstenzang isn’t sure that advantage will last. He imagines a future in which that M&A lawyer can use artificial intelligence to handle some of the specialized work they used to rely on colleagues to perform. Suddenly, the infrastructure of a large law firm might not look quite so indispensable.
Which leaves Big Law with a paradox: The same technology that could make law firms harder to leave might make it easier for their most valuable lawyers to walk away.
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