I was wrong twenty years ago. I have never been more right.

Both halves are true. Here is how.

Here is the thing I say in rooms full of chairs and executive committees, usually in the middle of a strategy fight or an operational teardown, and it lands like a slap every time. I ask them one question. Who is the customer of the firm? Every hand reaches for the same answer. The clients. Obviously the clients.

Wrong. The customer is the partner.

THE FULL BRIEF

Equity partners think they own a law firm. They do not. They own a slice of this year's profit pool, and next year they have to go earn it again. Owner is just the word they reach for because nobody handed them a better one, and it is a useful word. You can pound the table with it at allocation time. You can throw your weight around with it. You can wear it like a title. But it is a costume. A real owner can sell the thing. A real owner holds equity that compounds while they sleep. What a partner holds is a very good seat that they re-buy every single year, and the rent is everything they originate.

So they are not the owners. They are the customers. They are buying the firm.

And I am tired of hearing firms talk about their platform. You do not have a platform. You have an antiquated, traditional, gloriously simple business that backs its way into millions, sometimes billions, of dollars a year. No offense. All respect. I love this business model, I really do. You know why? Because you do not need an MBA to run it. You do not need ten years as a CEO somewhere out in the real economy. It prints money almost in spite of itself.

Which is exactly the problem. A business that easy to run is a business where enormous value falls on the floor, year after year, and nobody bends down to pick it up, because nobody ever had to.

Some partners notice. They stop seeing themselves as lords of the manor and start seeing the truth, that they are customers, and not especially well-served ones. They are spending real money to be there. They are spending something more expensive than money, the opportunity cost of every year they hand their book to a firm that leaves half its value on the floor. And the second you see yourself as a customer, you do what customers do. You look at your options.

You can leave for another firm. Be honest about what that gets you. A different lobby and the same machine. You usually just re-buy the thing you left.

Or you can strike out on your own. That used to be the brave, lonely move that only a few people made, and only a few of those made well.

Watch what is happening to that move. It is accelerating, hard. And not because courage suddenly went viral. Because an entire cottage industry has stood up around the partner who walks, outfits that will hand you a website, an IT department, a back office, a whole firm in a box, live on day one. The thing that used to take a year and a fortune to rebuild now takes a vendor and a weekend. The price of leaving collapsed, and the customers noticed.

The numbers already show it. In 2025, lateral partner hiring at firms of 250 lawyers or fewer jumped almost 89 percent. At the thousand-lawyer giants, barely 10. The customer is not only leaving. It is leaving for the small end.

And spare me the idea that this is about money. The recruiters have measured it for years. The number one reason partners leave is that they have lost confidence in the people running the firm. Two-thirds of them get a raise at the next place anyway. They are not chasing a check. They are firing a vendor. Michael Bowe walked out of the litigation group he co-chaired at Brown Rudnick and said Big Law is drunk on leverage and billables that deliver little bang for the buck. Big is not better, he said. It is just unnecessarily more expensive. That is not a resignation letter. That is a one-star review.

In 2007 and 2008 I was part of a small group of practitioners and academics who tried to map this. Not guess at it. Map it, the real scenario method, two big forces crossed into four futures for the law firm. We named them. Blue-Chip Mega-Mania, the global giants. Expertopia, the deep specialists. E-Marketplace, the work breaking apart onto platforms. Techno-Law, the machine rebuilding the model from the metal up.

We were not wrong about the shapes. All four are here. What we got wrong is that we thought the industry would pick one. It did not. They all showed up at once and crashed into each other, and today they stack inside a single firm, a single career.

But the four shapes are not the part I was most wrong about. The thing I missed, the thing nobody in that room in 2008 could have contemplated, was AI. And not for the reason everyone is shouting about. Not because of what it does to the legal work. Because of what it does to the floor.

Remember the value lying on the floor. For a hundred years it stayed there because bending down to pick it up was a full-time job for four hundred people and a building. AI is the thing that lets one person pick it up. It drives the cost of the machine toward nothing, which means the leverage that used to take a whole firm now fits on a laptop. The brave, lonely move stops being lonely. The customer who was trapped by the switching cost is suddenly free, because the switching cost is what just died.

And that changes the only question worth asking.

For my entire career, the thing that made a partner valuable lived inside that one human being and nowhere else. How they win. Who trusts them. The judgment that never made it into a document. Call it the partner genome. It walked out the door every night and went nowhere, because there was nowhere for it to go and no way to even see it clearly. Now it can be decoded, put to work, and owned by the person it belongs to.

That is the variable we could not draw in 2008. Not the regulation. Not the consolidation. Ownership of the genome. Who keeps the one thing about you that does not get cheaper and does not blur into everyone else.

So here is where it lands. The firm has exactly one customer it has never learned to serve. You. And for the first time in the history of this business, you can take your money, your book, and your genome somewhere you actually own, and the cost of doing it is dropping by the month.

I was wrong in 2008. I thought the future of the firm was a question about the firm. It was always a question about the customer, and whether the customer would ever notice the door was unlocked.

It just did.

What are you still paying rent on?

Talk soon again, Josh

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DISCLAIMER: None of this is legal advice. This newsletter is strictly educational and is not legal advice or a solicitation to buy or sell any assets or to make any legal decisions. Please /be careful and do your own research.