Over the past 30 years, globalization, deregulation, and technological change have reconfigured many service industries, such as banking and accounting. In contrast, the legal industry has remained relatively fragmented, in part as a result of the historical importance of local relationships and local laws. Every significant city in the United States has its own handful of large, elite firms, but only a few of them aspire to national or global status. However, a flurry of mergers of unprecedented scale and geographic reach—as well as several notable failures—suggest that the legal business is losing its immunity to the macroeconomic forces that have propelled consolidation and stratification in other industries. Of the world's largest law firms (measured by revenue), all but the most profitable are in some peril, and even the profit leaders, historically viewed as untouchable, will find it harder to maintain their flow of first-rate clients and talent.

Consider the year 2000 alone. New York's Winthrop, Stimson, Putnam & Roberts (265 lawyers) merged with San Francisco's Pillsbury, Madison & Sutro (490 lawyers). Paul, Hastings, Janofsky & Walker (610 lawyers), based in Los Angeles, merged with New York's Battle Fowler (120 lawyers). Chicago's Winston & Strawn (607 lawyers) linked up...