New Sources of Managerial Authority in Large Law Firms

The academic literature on large law firms emphasizes the limited authority of professional managers and the ability of rainmaking partners to sidestep formal management controls. Research suggests that bureaucratic management structures, such as dedicated, professional managers, tend to be weak or unstable in law firms, where compensation and status are tied to control over clients. Thus, while many commentators point to the potential competitive benefits of professional management - or, what typically is referred to as the corporate model - most analysts are skeptical that U.S. law firms will embrace such a model any time soon. This Article stakes out a contrary view. I argue that dedicated executive management is inevitable in large law firms and, with it, the development of distinct cadres of professional lawyer-managers, such as law firm general counsel and chief executive officers (or chairs). In fact, this process is well underway. The more interesting question is the likely relationship between dedicated executive managers and other constituents of the firm, particularly equity partners. Robert Nelson (1988) and others have argued that truly autonomous management is unlikely in law firms due to partners\u27 ideology and/or economic power. I argue, however, that the current conditions of competition among large law firms - that is, the AmLaw 200 - create new incentives for strong central management and new sources of managerial authority within firms. Thus, I predict that partners increasingly will embrace autonomous management. My arguments grow out of my research on the position of law firm general counsel. The structural evolution of the law firm general counsel position provides a valuable window into the dynamics of law firm management, particularly changes in the bases of managerial authority. My research also suggests a number of specific mechanisms for change, such as industry consolidation, the development of professional networks among managers, and generational change among partners