Disability Lawyer

Chicago Law Firm Axes 45 Partners!

Chicago law firm Mayer, Brown, Rowe & Maw LLP (MBRM) decided to axe 45 partners who weren't bringing home the bacon so to speak. The move reflects the competitive environment among Chicago law firms. MBRM intends to boot the dead weight and hire new ambitious talent to help grow the business.

The Chicago law firm's trimming of nearly 10 percent of its partners is a bit shocking for two reasons. Partnership in a law or CPA firm was once considered somewhat like being a tenured college professor. Obviously that's no longer the case. Secondly MBRM has a reputation as one of the more conservative Chicago law firms...or at least it did.

MBRM quickly denounced any rumors of an impending crisis as the reason for the shakeup. The Chicago law firm is one of the top 10 largest law firms in the country with almost 1,500 lawyers. Its 2006 revenues swelled over 10 percent to more than $1 billion. It's hard to imagine a crisis when you're raking in more than the GDP of some small countries in one year.

Incoming chairman James Holzhauer told the Chicago Tribune there are no problems and that it's necessary to manage the Chicago law firm as you would any billion dollar business. He says MBRM need to make sure it had "the right staffing going forward."

Hmmm...can you read between the lines of those comments? There are no problems at MBRM because they've just been canned. Billion dollar businesses stay billion dollar businesses by trimming the fat or getting rid of the dead weight. And the "right staffing" means retaining the partners who are growing the business and kicking the freeloaders to the curb. But Holzhauer did acknowledge recent defections in its New York office that raised eyebrows and that the reshuffling of the Chicago law firm had to be done to right the ship.

The biggest law firms in the US have been affected by changes in corporate America. Large corporations are reducing the number of outside law firms they use and pressuring the ones they do use to be more efficient or they'll be happy to find another law firm that is efficient.

Corporate America is not the only place where the winds of change are blowing. Rainmaker attorneys used to be loyal to the firms that trained them but those days are gone and the revenue producers are happy to switch firms if the price is right. These changes also increase the pressure on law firms to increase profits each year because profits are divided among partners each year and nobody wants to take a paycut...especially the lawyers bringing in the most business.

The recent moves made by the Chicago law firm also help boost its profits per partner which is considered to be akin to the stock price of a law firm. MBRM's revenues continue to rank highly but its profits per partner lag the competition. So what's the verdict on the Chicago law firm's bold moves? Time will be the judge.