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The Elastic Tournament: The Second Transformation of the Big Law Firm

Author(s)
Galanter, Marc
Henderson, William D.
Author(s)' contact information

Publication
Stanford Law Review
Volume number
60
Issue number
6
Year
2008
First page number
1867
Last page number
1929
Country
United States
Abstract
In 1991, Galanter and Palay published 'Tournament of Lawyers: The Transformation of the Big Law Firm', which documented the regular and relentless growth of large U.S. law firms. The book advanced several structural and historical factors to explain these patterns, centering on the adoption of the promotion-to-partnership tournament. Systemic changes in the marketplace for corporate legal services in the intervening years suggest the need for an updated account of the modern large law firm.
Using 'Tournament of Lawyers' as a starting point, we propose to fill this void in the literature. Marching through a wide array of empirical evidence covering the last twenty to thirty years, our findings corroborate some of the core theoretical insights of 'Tournament of Lawyers'. For example, the continuous upward growth of the partnership based on the tournament is clearly evidenced by a 'smooth' upward trajectory in the partnership ranks while associate hiring hews more closely to the underlying business cycle. On the other hand, the widening ranks of permanent 'off track' attorneys and non-equity partners, including the prevalence of de-equitizations, suggest the emergence of a more complex and elongated tournament structure that applies to both partners and associates.
Under a new model, which we dub the 'elastic tournament,' the equity core is primarily reserved for partners who control access to key clients. This structure reduces cross-subsidies between lawyers with differential value to the firm, thus reducing the potential for large-scale lateral defections. Yet, this reduced sharing of risks and benefits simultaneously creates an environment in which it becomes more costly - at the individual lawyer level - to faithfully adhere to professional and ethics principles that are in tension with client objectives. Arguably, these dynamics have made zealous advocacy the touchstone of ethical lawyering. The diminution in sharing also reduces the time horizons of individual lawyers and decreases their willingness to invest in firmwide initiatives that do not simultaneously optimize their own practice. Amidst this widening collective action problem, the 'firm' itself has remarkably little autonomy to pursue non-economic objectives, such as racial and gender diversity (particularly efforts directed at retention) or the training and mentoring of the next generation of lawyers. Further, except in some exceptional cases, the influence of firm culture, which may have moderated lawyer self-interest in an earlier era, is weakened by the sheer size and geographic dispersion of the modern big law firm.
Although this model is fundamentally 'stable' in the economic sense, it raises several philosophical and practical issues regarding lawyer independence and the long-term viability of professional self-regulation.
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