Study shows urban law firms have grown, as has business litigation

In the space of 20 years, the Chicago legal world changed from a relatively cozy establishment of lawyers in modest-sized firms to a profession dominated by large firmsÑan environment where some lawyers make vast amounts of money and those in solo practice make remarkably less.

“The average size of Chicago’s law firms grew from 35 partners in 1975 to 185 in 1995,” said sociologist Edward Laumann, co-author of a new book on Chicago lawyers. “In the old arrangement, there was a great deal of collegiality, but with the increase in size, firms became more departmentalized, with lawyers specializing in securities and other fields.”

In 1975, the top quarter earned the 1995 equivalent of $266,733 on average and collected an estimated 54 percent of all lawyer income. By 1995, their average incomes were 22 percent higher at $325,050, and they collected 61 percent of the earnings of Chicago lawyers.

Laumann, the George Herbert Mead Distinguished Service Professor in Sociology, co-wrote Urban Lawyers: The New Social Structure of the Bar, published this fall by the University Press. His co-authors are John Heinz, a professor of law at Northwestern University; Robert Nelson, professor of sociology at Northwestern University and Director of the American Bar Foundation; and Rebecca Sandefur, assistant professor of sociology at Stanford University.

Laumann and Heinz published Chicago Lawyers: The Social Structure of the Bar in 1982 (revised edition, Northwestern University Press and American Bar Foundation, 1994). In this earlier work, they established a “two hemisphere” theory, contending that Chicago is served by two sets of attorneys, one group made up of lawyers in large firms serving corporate clients and another group of lawyers, often working alone and serving individuals and small businesses. While these distinctions remain, the differences between the two groups also have grown.

Urban Lawyers was based on a face-to-face interview with 787 lawyers in late 1994 and 1995. Their earlier work had been based on similar interviews with 777 lawyers in 1975.

The survey team found that the percentage of women in the sample went from 3.9 percent in 1975 to 29 percent in 1995. Women, however, made up only 7 percent of the partners in Chicago law firms in 1995. Laumann said women are more likely to go into jobs where work hours are more predictable and flexible, such as work in the state’s attorney’s office.

The surveyors also found that business litigation has become an important growth area for legal firms, with the percentage of legal effort increasing from 4 percent in 1975 to 14 percent in 1995. In part, the increase accounts for the large differences in remuneration for larger firms compared to smaller practices.

While the legal profession has become more departmentalized, corporations are now more likely to have highly qualified counsel of their own, and they also seek contracts with a number of law firms rather than doing business exclusively with one established firm as they have in the past, the surveyors found. The work has become more competitive as a result and is less likely to be based on a system of well-established personal relationships, Laumann said.

Because Chicago is a center for corporate headquarters, the legal profession here also benefits from the globalization of commerce, with firms increasingly establishing offices around the world. With the emergence of larger law firms, some lawyers have found themselves to be less autonomous in their work, but despite the changes, attorneys report high levels of job satisfaction, Laumann said.

“The Chicago findings suggest that the attitudes of lawyers toward their work are not greatly different from those of most people in the labor force,” the authors wrote. “We have good days and bad days. Some tasks are more desirable than others. We gravitate toward work we can handle. People who become lawyers usually have other career options. Those who consider the options and then choose to practice law, appear, in most cases, to find the work rewarding.”