Smaller businesses (ahem, law practices) have many advantages over larger ones.  As the saying goes, “Small is the New Big.”  In 1937, Ronald Coase, a Nobel Prize winner, illustrated one of the fundamental purposes behind large organizations: business can be expensive and sometimes it’s best if costs are spread out throughout a large enterprise.  Due to operating costs, all businesses, large and small, have an inherent “Coasean floor” where a certain endeavor is not worth the organization’s time.  But if costs are driven low enough, the Coasean Theorem states that small operations can theoretically overtake big ones.  With fewer barriers to enter, such as zero marketing costs and super-low technology costs, the small can act big and provide equivalent services at much lower price points.

To be clear, the mega law firms are not going the way of the dinosaur.  There will always be the mega law firms with enough resources to support the needs of various institutional clients.  I do not see a sole practitioner getting complex security work from Merrill Lynch.  However, it’s no secret that there’s a deflationary force in the legal industry where clients are demanding more competitive rates.  If the Coasean Floor of the larger law firms prohibits them from making adjustments due to legacy costs, inflated salaries and costly infrastructure, the work will flow to professionals with leaner operations.  If you’ve got a laptop and an internet connection, it’s possible to open up shop.  It can be as simple or as complex as you want.