In an era defined by market volatility and corporate shakeup, fears of law firm failures have intensified within the legal industry. The potential collapse of a law firm can generate tremendous personal and professional anxiety for the lawyers who operate within these entities. The question on the minds of many is: What happens if my firm fails?
Despite the prevalence of these fears, it turns out that the consequences of firm failure may not be as disastrous as some lawyers might believe. Contrary to an overarching sense of doom, recent research suggests that lawyers who have experienced a firm’s collapse often manage to land on their feet and successfully relaunch their careers.
A recent paper by Andrew Granato, a Yale Law student, sheds fresh light on this matter. Digging into the casestudy of the infamous Dewey & Leboeuf debacle in which the law firm went caput, Granato followed the career arc of former Dewey & Leboeuf associates and partners from 2012 until late 2022. His findings, reveal that many lawyers from this firm went on to secure new positions, with their paths to high-ranking legal partnerships remaining largely unaffected by the failure.
From a total of 93 Dewey associates, 19% attained partnerships at Am Law 100 firms, in comparison to 26% from a group of 353 associates at firms listed as Dewey & Leboeuf’s competitors. Despite this slight disparity, Granato asserts that this statistical deviation is insignificant. He further argues that having been a part of Dewey & Leboeuf neither enhanced nor curtailed one’s chance of becoming a partner in an Am Law 100 firm a decade later.
However, the research also highlights that the journey for former Dewey & Leboeuf’s partners has been quite complex, with many having to wrestle with lawsuits and even personal bankruptcy filings. Yet, a significant number of these individuals have managed to maintain their positions in the Am Law 100 realm or secure equivalent roles.
While the collapse of a law firm and the subsequent turmoil can undoubtedly be likened to a tumultuous divorce, as Yale Law professor John Morley points out, this research underscores an essential reality: the world may not necessarily be worse off when law firms fail. It is a reminder to the legal fraternity that bumps along the way also pave the path to resilience and growth.
The research serves as a comfort to legal professionals and offers a beacon of hope that the specter of a law firm’s collapse need not signal career annihilation. That being said, it highlights a crucial fact – the importance of strong relationships, whether within a large law firm or a powerful practice group, is irreplaceable for future career stability.