Weil Gotshal is a canary in the legal coal mine

Weil, Gotshal & Manges’ collapse last week has set off a blame game over what made the storied law firm uniquely vulnerable. But focusing on Weil’s particular circumstances misses the bigger point. The legal profession’s traditional business model is under enormous strain, and its outdated taboo against outside capital must be reconsidered if firms of all sizes, from New York’s white-shoe giants to regional players across the country, are to remain competitive.

Law firms have always had to live with the risk of top talent departing. If partners lose confidence in their firm’s future, or decide they can do better elsewhere, they head for the exits. If enough leave, the firm’s very survival can be at stake. What is different now is that this inherent instability, a feature of the partnership model rather than a bug, is being pushed to a breaking point by two converging forces: generational turnover in law firm leadership and the upheaval brought on by artificial intelligence.

A generation of law firm leaders is approaching retirement, forcing firms to confront difficult questions about succession. At the same time, AI is transforming how legal work gets done, calling into question the hourly billing model that long seemed untouchable. Lawyers no longer need to spend days reviewing thousands of contracts for diligence issues that software can flag in minutes. Discovery that once required armies of lawyers can now be narrowed with far greater precision. Research that used to take days can increasingly be completed in hours using........

© Fortune