Back in the go-go days of the 80s and 90s, law firms built pyramids and it was all about leverage to ramp up firm profitability. Back then, it was a seller’s market. There was plenty of work. Partners brought it in and fed it to a growing legion of highly profitable associates.
But times have changed, and US law firms are now facing the stark realities of a buyer’s market. As a consequence, many firms now find themselves with a “diamond” structure characterized by a small number of junior associates at the bottom and a growing number of non-equity partners, of counsel and staff attorneys in the middle. But is such a model sustainable over the long term? This paper says no.