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Legal Commentary

Adam Smith, Esq.

An inquiry into the economics of law firms.

Post Frequency: 0.9/day

Last Entry: May 16, 2009 at 12:58:52

Adam Smith's Home Town

Posted on May 16, 2009
If you've never been to Edinburgh, I highly commend it to you. And that's not just because of the Adam Smith connections, although that's what I'll very briefly mention here. We're staying about 200 yards down the Royal Mile from Adam Smith's new statue, unveiled 4 July 2008, and about...

Interest Rates or Collateral?

Posted on April 14, 2009
Every once in awhile, a genuinely novel idea comes up in economics, and you would think that given the generally impenetrable, contradictory, and confused commentary emanating from far and wide about our current situation, now might be a propitious time for a truly new idea to arise...

The Balance Sheet Recession

Posted on April 08, 2009
More than ample is the ink that's been spilled over trying to explain just exactly what we're going through economically: Is it a bad recession? A near depression? Is it analogous to 1929? Is it analogous to....? Does our salvation lie in monetary policy? In fiscal policy? Are trillion-dollar budget...

What We Know & What We Don't Know

Posted on April 02, 2009
Just as McKinsey's consulting practice centers on corporate America, certainly its core clientele and expertise, as opposed to law firms, where they have no domain expertise that anyone would notice, the McKinsey Quarterly surveys do not encompass law firm leaders, but global corporate executives...

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Is Capitalism Dead?

Posted on March 28, 2009
Is capitalism dead? The Financial Times has an ongoing series, The Future of Capitalism (I haven't read it all, but "dubious" would seem to be the most apt one-word review so far), Knowledge @ Wharton has "revisited" the question whether capitalism is working, and even the normally staid and circumpsect...

What I'm Reading

Posted on March 23, 2009
From time to time, people ask me what I'm reading when trying to figure out what is going on in the economy these days. A glib response might be, "anything I can get my hands on," but the question deserves a more thoughtful response, so herewith a book review and...

The Profit Imperative

Posted on March 17, 2009
The news out of Dewey & LeBoeuf--that 66 partners, or about one in five of their 350 partners, have seen their compensation cut over the past 15 months by up to 80%--begs for an explanation, or at least some commmentary. First, what's going on in the firm's own words: The...

The Human Toll

Posted on March 15, 2009
Time for a time-out. In all the obsessiveness and compulsiveness about the impact that this little economic interregnum we're gamely marching through is having on our firms, our P&L's, and even our personal balance sheets, let us pause for a moment to consider the genuine human toll of layoffs...

The Non-Equities (& Others) Heard From On "The Great De-Leveraging"

Posted on March 13, 2009
Well, that'll teach me... The volume of commentary following my publication earlier this week of "The Great De-Leveraging" has been unprecedented.� Depending on your attitude, that is either deeply gratifying or almost overwhelming.� As one who takes the positive view by default, I choose option A...

The Great De-Leveraging

Posted on March 08, 2009
Just as I was thinking it was about time to publish a column on the topic of "leverage" at law firms (roughly speaking, the associate to partner ratio, although there's more than one way to calculate something that people will call "leverage"), here comes a slew of pieces on the...

"The Media & The Legal Profession:" Panel at Georgetown Law

Posted on March 01, 2009

Report to Readers

Posted on February 28, 2009

The "Index Fund" of Law Firms?

Posted on February 27, 2009

Let's Just Pull the Covers Over Our Heads. Or NOT.

Posted on February 23, 2009
America has been through many crises and challenges before, far worse than what we're experiencing today. Need I mention (keeping it to economics and not including wars), the hardships and deprivations brought on by the Civil War, the long depression of 1873-1895, the Great Depression itself, the grinding stagflation of...

Layoffs: Substitutes & Complements

Posted on February 20, 2009
When non-lawyers ask what's happening in the world of law these days (i.e., what ATL is covering), our first response is usually one word: layoffs. It's been a dominant theme in our coverage since the fall. ?Above The Law (today) While I might nominate that quote for Understatement Of...

What Did I Do Wrong?

Posted on February 13, 2009
Within the space of 15 minutes late this afternoon I got calls from both Bloomberg News and The American Lawyer asking me what was going on with all the layoff announcements hitting the wires today. So this was not your ordinary day, and even though "Adam Smith, Esq...

The "Cull" & Your Clients

Posted on February 09, 2009
So now the "cull" has come to partners in the Magic Circle. As The Financial Times reports: The cull of partners at Britain's leading law firms worsened on Wednesday as Clifford Chance unveiled plans for job cuts across its 21-country global office network...

Are Profits The New Growth?

Posted on February 03, 2009
Find out my thoughts on the matter here....

The NYT's Obit for the Billable Hour

Posted on January 31, 2009
When The New York Times features it on the front page, it must be real, right? I'm referring to Billable Hours Giving Ground at Law Firms, which features Evan Chesler flatly arguing that "This is the time to get rid of the billable hour." Unfortunately, if you're looking for real...

"Animal Spirits," Anyone?

Posted on January 28, 2009
Robert Shiller, the Yale economics professor who has co-authored the forthcoming Animal Spirits: How Human Psychology Drives the Economy and Why it Matters for Global Capitalism, has an important op-ed in The Wall Street Journal. Shiller's op-ed itself is an argument that the Obama Administration's proposed stimulus package isn't big...

Report From London

Posted on January 25, 2009
Back from a week in London. (Close readers may recall I was there six weeks ago, and while I may be imagining things slightly, I believe the tone in the City has changed perceptibly even in that short time.) Herewith a concise report, albeit one consisting more of questions than...

Critical Thinking II

Posted on January 17, 2009
I recently wrote about the dearth of critical thinking abroad in the land. Now I'd like to bookend that piece with a classic from The Harvard Business Review, "Why Don't Managers Think Deeply?" The opening lines are priceless; I would ask you only to put yourself in the shoes of...

London This Week

Posted on January 17, 2009
I'll be leaving for London tonight and spending all week there—back next Saturday the 24th. Among the firms I'll be visiting will be a number of the usual suspects including most of the Magic Circle. Although I was just over there early last month, at the pace things seem to...

Lessons From the Depression

Posted on January 12, 2009
Every day, these days, and more than once, I ask myself, what all this means for our profession and our industry. By "all this" I refer, of course, to the economic environment. Here are some of the hypotheses I'm putting in front of people I talk with: Will this period...

Richard Susskind's "The End of Lawyers?"

Posted on January 09, 2009
Ten years after publishing The Future of Law, Richard Susskind is back with what in many ways is an extended sequel, The End of Lawyers? If you don't know Richard (disclosure: I do, and consider him a friend), it's high time. From the dust jacket: "Richard Susskind is Honorary...

Happy 2009

Posted on January 01, 2009
This is actually a new-for-2009 Waterford crystal ball, approximately 10 feet in diameter, weighing over 12,000 pounds, covered with 2,668 crystal triangles, and illuminated by more than 32,000 LEDs. Happy big bad bright New Year. Actually, Dear Reader, I imagine many of you, as I, will be just as...

Perspective

Posted on December 30, 2008
Perspective. It's time for some. A friend of mine who's the lead financial reporter for one of the original three networks prompts these thoughts. Not that he/she subscribes to the view that it's time for some "perspective"--au contraire. To paraphrase their view: "We're in a severe recession...

If You're So Smart, Why Aren't You Rich?

Posted on December 27, 2008
Actually, the formulation of that headline that I prefer these days is the famous inversion by the Nobel economist Paul Samuelson: "If you're so rich how come you're so dumb?" And yes, that brings us promptly to the Bernard Madoff scandal. Among the multitude of "we should have seen it...

Merry Christmas

Posted on December 25, 2008
Rockefeller Center, Christmas 2008 Photograph by Bruce MacEwen...

Thacher, Proffitt Wood LLP: 1848 - 2008

Posted on December 22, 2008
A Merry Christmas, Happy Holidays story of the first order: As noted this morning by The New York Times, Above The Law, and The WSJ Law Blog, Sonnenschein is acquiring about 100 lawyers, including 40 partners, from 160-year-old Thacher Proffitt & Wood—technically, not a merger of the firms but a...

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