A while ago, I reported that Goodman & Carr had decided to shut its doors. I had only read a few comments here and there on the Internet, but had heard nothing more except some rumblings from staff at other downtown firms, with nothing being noteworthy.

Today, I came across an article outlining the details of how Goodman & Carr came to an end. It was a very interesting read. It is an unfortunate circumstance for many of the partners who had invested so much of their time, money and efforts into a lost cause. At the same time, the partners should accept that there always is some risk in the partnership of a law firm. After all, they are running a business, and their pay is determined by the performance of that business.

The article raises some issues relating to the change in culture within the business. While that may have been a driving force that pushed many lawyers to leave the firm, I don't believe that it was as major of a cause of the collapse as the reader may be led to believe.

From my experiences in law school and working in law firms of various sizes, it seems to me that lawyers often have problems working with other lawyers. I remember a property law assignment back in law school where everybody spent 20 minutes arguing over the wording of a certain sentence, which I think had more to do with grammar than with the meaning behind it. Other groups reported the same thing when working on their assignments. One of my old law school friends who had a background in psychology believed that it was due to the fact that most of the students motivated enough to enter law school had a type A personality, which tends to conflict with other people of a similar personality.

If elementary and high school has taught us something, it's that we don't always get to choose who we work with. Back in grade 8, my teacher insisted on putting me in groups with failing students. I would guess that the reason was to (a) teach me how to work with less than stellar help around me and/or (b) force me to elevate the grades of the failing students so that she wouldn't have to fail them. The same principle should apply here with Goodman & Carr; the lawyers may or may not have been given a choice of who to work with, but somehow, they should have found a way to work towards a common goal.

There seems to be a lot of suggestion that the firm was "profitable", but the article states that because of the departure of many partners, they did not have the money to pay out their equity partnerships. If it were truly "profitable", there would be a way to keep the firm going while having methods of repayment. Most homeowners don't declare bankruptcy or sell their property just because their mortgage is up for renewal if they are maintaining a steady income.

Another blogger believes that most of the lawyers and staff should have no problem getting a job with another firm. While I can attest that some of the lawyers and staff I had been dealing with previously at Goodman & Carr have found jobs elsewhere, I don't think that it's much help to the partners who have lost their equity in the firm.

While on that note, I think that it is an appropriate time for me to write about the structure of law firms in general. Most medium to large firms award partnership based on billable hours and perhaps rainmaking abilities. However, what they failed to do was put partners in place who were more business people than lawyers. Lawyers sometimes aren't the best at running a business, and perhaps their selection process was a little more flawed. It's like having an engineer working in an industrial plan get promoted to a director of the company solely because he has put in a large amount of overtime. S/he may be a great engineer, but may not understand how to run a company. Not the best idea.

I believe that the sole cause of their demise was due to having higher expenditures resulting from rapid expansion without having sufficient income or leadership to ensure high revenues. Effectively, they were spending beyond their means. I guess they were also after a free lunch.