Bruce MacEwen: Growth is Dead, Now What? #ArkKM

Bruce MacEwen is president of Adam Smith, Esq. LLC and president, JD Match. Bruce is an influential blogger at Adam Smith Esq. and author of Growth is Dead.

[These are my notes from the 2013 Ark Group Conference: Knowledge Management in the Legal Profession.  Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error.  Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]


  • Excess Capacity. There is a an excess supply of law school graduates. There simply are not enough jobs for them. The national average is approximately a 2:1 ratio of new JDs to jobs. A recent NALP survey shows that summer associate programs are 51% lower now than 10 years ago. Citibank estimates that the firms that bank with them have about 6% excess capacity.
  • Impact of 2008 Recession. When you have a recession driven by a credit crisis, it takes much longer to recover. GDP per capita declines by 10%. (Compare this to the bubble recession, which was an equity-driven recession.)
  • Law Firm Pricing. Law firms are following the path of other desperate industries. They engage in suicidal pricing (depressing prices to the point that they no longer make money). For examples, see the department store industry, the airlines industry, the automotive industry.
  • Empowered Clients. Clients are finally waking up to the fact that they can make choices when it comes to their law firms. Sometimes this means moving to lower cost firms. Sometimes it means handling matters internally for much longer. Sometimes it means disaggregating services so they source services from a variety of providers who offer more favorable pricing. The law firm can no longer depend on a steady stream of business.
  • Advice to Managing Partners. (1) Focus on Innovation. This means you need to create a culture that allows you to produce a lot of ideas. Most will fail, but some will work. Set aside 20 hours of revenue annually for a research and development budget. (2) Focus on Firm Management. Get lawyers out of the business of managing law firms. Instead, bring in management professionals. And, while you’re at it, banish the term “non-lawyer”!

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