The Restructuring of the Professions: How Investment Banking, Audit, and Tax Rebuilt Themselves — and What Their Transitions Predict for Legal Services

Bommarito, M. J., II (2026). The Restructuring of the Professions: How Investment Banking, Audit, and Tax Rebuilt Themselves — and What Their Transitions Predict for Legal Services. Working paper (draft). Working paper (July 2026) — comments welcome. Between 1970 and 2005, every major Wall Street investment bank abandoned the partnership form; between 1987 and 2025, the Big Eight accounting firms consolidated to four, built and shed a consulting industry larger than their audit practices, and sold much of their next tier to private equity in a wave exceeding one hundred transactions per year. Legal services — the largest professional market, at roughly one trillion dollars globally — is now entering the same passage, propelled by artificial intelligence and institutional capital and constrained by ownership rules the other professions shed or engineered around decades ago. The paper assembles the history of all three transitions; develops a threshold model of partnership-to-corporation conversion composed from the partnership-economics literature (Morrison-Wilhelm, Levin-Tadelis, Fama-Jensen, Klein-Leffler, Garicano); documents the demand side (the institutionalization of the client) and two unregulated control professions (consulting and advertising); analyzes recurring distributional outcomes and failure modes; and states falsifiable predictions for the legal transition over 2026–2035, several of which the first half of 2026 has already begun to score. 49 pages, 178 references..