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We previously wrote about how the painfully low percentage of Generation Xers making BigLaw partner in this country. Now, the researchers whose data led to that odious conclusion have also provided data to show that law firm partners are significantly older than the CEOs of the clients they serve.
Is the BigLaw model of law firms growing continuously gray at the temples?
Why Are Law Partners Aging Faster?
While Gen Xers make up only three to four percent of BigLaw partners, they make a staggering one third of CEOs that are traded on the Nasdaq. Williams Henderson at JDSupra took a look at the data and came to the conclusion that ownership structure is a primary explanation.
CEOs are encouraged to create enterprise value. The jury's still out on whether this compromises the long-term future of a company for short terms gains. Law firms, on the other hand, are not publicly traded because the the Model Rules (specifically Rule 5.4) do not allow for non-lawyer investors to take equity in a law partnership. Thus, partners do not find themselves beholden to fears and greed of legions of stockholder who could just as soon sell or short their interest in the firm.
When aging and senescing law firm partners reach a particular stage in the firm, they tend to stay around a lot longer than a publicly traded company would normally allow -- especially in the case of tech companies traded on the Nasdaq that are hungry for fresh young blood.
Moving to Greener Pastures
BigLaw no longer has the draw that it once did. Today, more young lawyers aim to be general/in-house attorneys where the work tends to be less drone like and more challenging. Increasingly, it appears that BigLaw will have to learn to be more flexible than their aging partners are accustomed lest they become obsolete.