So the death march of law firms with highly pun-able names goes on, and its latest victim is Dewey LeBoeuf. (Dewey have any assets? Howrey gonna pay the creditors? Thelen probably works too, maybe as something from Scientology.)

Every failed law firm fails in its own way. The Dewey scuttlebutt suggests that the firm grew too quickly, via lateral hires, and gave unreasonable income guarantees to under-performing partners. When the performers departed for greener pastures the firm folded under the weight of its debt, according to reports. There were different issues at Howrey, and Thelen, and so on. You can check out the BigLaw Dead Pool at LawShucks for a complete list.

The factor that unites each and every one of these firms is that, in every case, the departure of the firm’s rainmakers killed the firm.

Of course that’s a tautology. When the folks who are responsible for the firm’s business leave, the firm loses its source of income. When a firm loses its income stream, it dies. There is an old saying: a law firm’s assets go home every night.

So why does this seem like a fairly recent phenomenon?

For one thing, law firm culture has changed dramatically. Rainmakers were always important, but there was a time, not that long ago, when they were considered to be only a part of a functioning whole. They had a role to play, and maybe the importance of that role to the ultimate survival of the enterprise meant that they had bargaining power when it came time to set salaries; but the roles of others were considered important too. Law firm managers, for example. Maybe they had a big book of business. Maybe they didn’t, but were good with the financials, or with people. Once upon a time it was possible to bring value to a law firm in some way other than boosting the A/R. But not any more.

These days, you either have a book of business or you are non-performing. Non-performing partners are either de-equitized or shown the door. What does that leave us?

A bunch of guys (and some women, but still, mostly guys) who will go wherever the money is. Rainmakers are in demand. Law firms who need to prop up the bottom line will pay a premium to bring them in.

Why is this a problem? And I do think that it is a problem.

The trouble with rainmakers is that the skills that lend themselves to business development are not necessarily the same skills that make a good lawyer, or a good business manager. They just aren’t.

The rainmaker exists to make the client happy. Rainmakers say yes. But yes is not always the appropriate answer. You need only give the Enron or WorldCom or Tyco cases a cursory review to figure that out.

Law firms – and all businesses, really- should build in the same kinds of checks and balances that our Founders built into the Constitution. It needn’t be that formal, and the partition walls needn’t be as clear, but there should be a process for saying no to a proposed deal or plan. There should be a check on the power of the business-getter to say yes. In a firm built on rainmaking culture, where no one without a book matters, this doesn’t really happen. The lawyers mind their own stores, and nobody minds the law firm.

Then the law firm fails.

Changing the current state of affairs will require a major paradigm shift, and I am not hopeful that it will occur. And certainly, some of what we are seeing is a necessary market correction. The much-ballyhooed law school bubble has given us too many lawyers, and in a glutted market the rainmaker is king.

But the kingdom? The kingdom devoid of tradesmen does not last. It can not. What is it that we want our law firms to be? If they are strictly profit centers, then this trend will continue. If they are something else – and I hope that they are, that there is more to the practice of law than profits per partner – then things will change. Maybe they already are. Partners whose work is considered too “low rent” are leaving large firms to practice solo or in small firms. Those partners will eventually need to hire attorneys to help manage the work. And maybe we will start building again, then.