From my relatively uninformed and obviously biased perspective, I think the U.S. law firms basically exhibit cartel-like behavior. The ABA makes becoming a lawyer extremely expensive: an undergraduate degree, 3 years of law school, being admitted to the bar, for instance. By limiting the number of lawyers, the price for their services is artificially inflated. That’s why legal advice is prohibitively expensive for most people.

Firms also bill clients several times the amount they pay out in associate salary. I think someone in class mentioned a 5:1 ratio. Such margins would be unsustainable in a competitive environment. In addition, there is virtually no price competition between firms. That’s why every firm in New York pays $160K for a 1st year associate.

It’s my impression that firms don’t respond to market pressures very aggressively. I would bet they will be slow to outsource, just as they were slow to introduce alternative work arrangements.

Some comments/observations that tie into some of what you are discussing:

(1) The bigger the client, the more likely the client will simultaneously use several of the top firms in a given community, divvying up the work by practice area. This way, if and when litigation time comes, the bigger firms with the most litigation expertise will already represent them and can't represent the other side. A combination of disablement and utilization going on here.

(2) Some practice areas are highly sensitive to political swings. It is always a strength for these practice areas to have several Repub and Dem attorneys on the rolls who are savvy about political connections.

This may sound crass the way I've presented it, but I'm trying to be candid here. Think about these angles, because in one way or another, chances are they will impact you.