At bottom, what’s in question is the whole economic edifice of the modern American law firm. Like the pharaohs of old, big firms are enamored of constructing pyramids with an ever-widening base of associates and nonequity partners toiling on behalf of a narrowing band of equity partners at the top. Increasing a firm’s “leverage”—as expressed through the billable hour, one of the most pernicious creations in the annals of commerce—has been the key metric driving profitability at big law firms over the last generation. McCollam: End of Big Law is One Bright Spot in Economy - WSJ.com http://bit.ly/oZ0aN

Last time I checked, we were not capital-intensive nor do we have but the most trivial base of fixed assets.
When the WSJ Has No Clothes - Adam Smith, Esq. http://bit.ly/lE8cg

It is ludicrous to think to think law firms have low fixed costs and real equity. Law firms have (1) very little tangible equity, certainly nothing resembling any company of comparable size and only a handful of firms (Generally the top NY firms) have real “brand” equity in any traditional sense, (2) revenue generators who can (and do) walk out the door on a moment’s notice and cannot be bound by a non-compete, (3) high fixed costs in real estate, (4) high costs that firms consider “fixed” due to ego and an unwillingness to act like a business—namely associates—how many firms have fully utilized associates right now? at most firms I’ve spoken with, it seems like 25% or more associates and at least 10% of partners would need to go before you even got close, and (5) then there are all the ancillary expenses that big firms have like marketing teams, accounting teams, etc. (add up how many “C’s” your firm has that are non-lawyers).Adam Smith - The Wealth of Lawyers | Mendelson’s Musings http://bit.ly/6HSLp