Wednesday, July 04, 2012

Entitlement Kills Law Firms

I have been a lawyer for 41 years.  My first law firm, Smathers and Thompson, was a great place to grow up in as a young attorney.  I was a litigator and got to try a case, a jury trial in state court, within a year after starting.   The older lawyers were excellent teachers, and their professional values were first rate.  There were about 24 lawyers in the firm when I started in 1972, which wasn’t the largest in Miami at the time, but it was one of the largest. 

That firm is gone now, and what killed it was the sense of entitlement that swept it like a plague, as we moved into the eighties and a period of unprecedented prosperity for lawyers.  The senior partners felt they were entitled to a slice of the gross revenues off the top, regardless of how those revenues grew, before they divided what was left among all the partners, including themselves.   After all, they had been there the longest, they had “built the firm.”  The younger partners, on the other hand, who had families still to raise (and a good deal more energy), felt they were entitled to more because, well, they needed it to live, as they understood lawyers were entitled to live. 

Finally the firm broke apart when a powerhouse New York firm called Finley Kumble arrived in town and seduced the younger partners and even one of the seniors with cash in amounts that seemed outlandish at the time, seduced them into establishing a Miami component of the NY firm’s national expansion.   I stayed with the remnant (one of the departing partners called us "the gray chevrolets") and we soldiered on until, a few years later, we sold ourselves to another NY law firm, Kelley Drye & Warren.  We felt we were entitled to a high price from the NY lawyers who bought us, and we got it.  After the merger, the NY lawyers felt entitled to tell us how to practice, which made for unhappiness at our end.  That effort ended in 1999, when the NY lawyers closed the Miami office and left us to our own devices.

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