[abalashov]

Very informative and interesting comment - thank you for "go[ing] on and on!"

It seems to me that the pattern you are describing also applies to Big 4 professional services firms like PriceWaterhouseCoopers, KPMG, etc, in areas anchored around accounting and auditing but characterised by an ever-expanding array of allied services. Would you care to comment on any nuances or differences particular to them as opposed to Big Law?

[grellas]

Both are attempting to take what were traditionally fairly sleepy service professions (this would be 50+ years ago) and transform them into worldwide mega-businesses for their respective niches. This means that the old partnership model has effectively died in both professions. Partners tend not to sign on for life with such a firm any longer but rather tend to align themselves more opportunistically with any given firm, ready to jump to another as opportunity and the dollars warrant. For this reason, too, the firms tend not to support partners over the long term and the loyalty factor is much diminished from what it used to be. In short, both are now major businesses, with all the upside and downside that comes with taking the risks of major entrepreneurial ventures.

Thus, as firms trying to expand aggressively into new fields, with worldwide operations, such firms are now subject to all the vagaries of major businesses. In the past, a major law firm or a major accounting firm would not have wild fluctuations in its firm operations - ups and downs, yes, but not wild swings that could threaten its survival. Today, both large law firms and major accounting firms have done the unthinkable: (1) systematically purging their partner ranks to weed out less productive partners, (2) mass layoffs of younger professionals to survive severe downturns, (3) firm explosions that have caused some of the premier firms to go out of business altogether (in accounting, Arthur Andersen, of course; in law, firms such as Heller Ehrman (which was a 150-year-old firm, Brobeck, etc.). These are all symptoms of the shift from staid profession to major business venture. Of course, the rewards of successful expansion have far exceeded the risks over the years, and have enabled such professionals to make returns on average per partner that easily dwarf what such partners used to make under the old ways and hence they have made this shift.

I don't think I am competent to comment on refined nuances between the large firms within the accounting profession versus the legal and so will leave that to others.