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Partners Under Pressure : Workplace: Law firms are changing their collegial ways. They're becoming like any other business, showing fiercer loyalty to the bottom line than to partners.

July 07, 1991|DONNA K. H. WALTERS | TIMES STAFF WRITER

C'mon now, you didn't really think the scriptwriters for "L.A. Law" could just make up all that stuff, did you?

Inside real law firms all across the country there's high drama being played out, the likes of which have kept TV's fictional McKenzie, Brackman in turmoil for several seasons. New partners are brought in solely for their ability to lure clients, while long-time partners stalk out, their own client lists in hand. Nonproductive partners get shoved out the door. Associates who are pushed off the coveted partnership track either cut deals to stay with the firm or hit the streets looking for scarce jobs. Everyone sues everybody else. And once-stable law firms collapse under the weight of infighting.

Gone are the collegial ways. Firms are rewriting the definition of a partnership and charting profound changes in the practice of law. It's becoming more and more like any other business, showing fiercer loyalty to the bottom line than to its traditions and greater affection for performance-based rewards than for longevity. Firms are hiring and firing in fits and starts; young lawyers no longer develop allegiance to their firms, and many older lawyers are questioning their commitment to a changed profession.

During the 1980s, many law firms prospered by being responsive to the economy and acting more like the corporations they served. They, too, expanded, merged, raided, and, most notably, drew in phenomenal sums of money. By the end of the decade, it was not unusual for a senior partner in a top firm to make more than $1 million a year.

But now, in the chill of the recent recession, the changes and the partnerships that have made them are being sorely tested. The days of escalating fees have been replaced by legal "bake-offs"--competitive bidding for jobs. Law firms are hiring their own marketing staffs to help promote them in the tight market. Some have failed--often just as spectacularly as they had earlier appeared to succeed. In Los Angeles already this year, three notable Century City firms have broken up; more dissolutions, bankruptcies and receiverships are predicted throughout the country.

Some, both in and outside the legal profession, welcome such changes, including clients eager to reduce their legal costs. Steven Brill, publisher and editor-in-chief of the American Lawyer and several other law journals, long has been nagging law firms to scrap their collegial ways and act more like businesses. Other proponents of the changes say that in the course of being more responsive to economic realities, law firms have also become more attuned to society's needs, particularly by making room for women and minorities.

Yet others who practice, teach and study the law are worried that, ultimately, the legal system and the public interest will suffer. "These (changes) seem invisible but can have huge implications for society," said Robert L. Nelson, a lawyer, sociologist and member of the American Bar Assn. Foundation.

Nelson and others worry that the devotion to the bottom line creates greater conflict between the lawyer's dual roles as representative of the client and an officer of the court. David Wilkins, assistant professor of legal ethics at Harvard Law School, said that as law firms move from long-term relationships with clients to piecemeal work earned in competitive bidding, there is more pressure for them to give advice that the clients will like--and that may not be in the public's best interests.

Always before, Wilkins said, part of the role of an attorney was "to attempt to encourage clients to conform their conduct to the broader rules and regulations" of law and society. This ethic is endangered, he said, "as law firms become more and more competitive and more and more emphasis is placed on how many dollars the lawyer brings in."

Critics have charged that in the savings and loan crisis, for example, attorneys ignored their ethical obligations by helping put together deals and structures that were beneficial to their clients, but which bent regulations and eventually cost depositors and taxpayers. In the past year, the federal government has brought about 50 cases against lawyers and law firms, including the large, powerful firm of Jones, Day, Reavis & Pogue of Cleveland, in connection with the crisis and is investigating other possible suits.

The transition of the legal profession had its roots in the 1970s in the large law firms and accelerated in the 1980s with the mergers and acquisition spree and huge real estate deals. In recent years, the changes have been filtering down to the medium-size and small firms and moving from the East Coast to the West.

Their big clients were expanding through takeovers, creating new forms of financing and then shedding unprofitable assets, and law firms rushed to keep up. They moved into new cities like fire ants on the march, gobbling up office space, groups of attorneys or other firms and shedding their own nonproductive assets.

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