In this latest flurry of debate about working long hours, some have intimated that overwork is inevitable in highly competitive industries such as law, finance, and high tech.

But that’s just not true.

We’ve all heard by now that productivity decreases with overwork, while attrition and health care costs increase. What you may not have heard is that businesses who drive people relentlessly create competitors who poach top talent by offering a more humane way to work.

A new study from the Center for WorkLife Law reports on this phenomenon in the legal profession. The report identifies over 50 entrepreneurial businesses that offer lawyers jobs with better work-life balance than large law firms offer. Big Law, meet New Law.

New Law is filled with Big Law refugees, who’re siphoning off the work Big Law used to rely on to balance its books.

This isn’t small potatoes. One New Law company, Axiom, is now one of the largest providers of legal services in the country, and boasts over half the Fortune 100 as clients. Axiom is an order of magnitude larger than most new models of legal practice, but it is not the only one nipping at Big Law’s heels. Counsel on Call was worth nearly $50 million as of 2013, with over 900 lawyers; it serves one-third of the Fortune 100. While Big Law still controls legal matters that require very large teams, or teams that span many different practice areas, virtual law firms (such as Rimon, VLP Partners LLP, and Potomac Law Group) and virtual law companies (such as Berger Legal LLC and Cognition LLP) compete successfully for a wide range of matters that may require high-level expertise but involve only one or a few seasoned lawyers.

Big Law’s commanding market lead in specific practices areas is also being challenged by boutique firms. A notable example is Bartlit Beck Palenchar & Scott, which handles high-profile trial work; it led the British Petroleum National Oil Spill Commission for the Obama administration. Other examples include Landmark Law Group (real estate), Smithline PC (tech transactions and IP licensing), Miller Law Group (defense-side employment law), Valorem Law Group (complex litigation), and The California Appellate Group (appellate).

Relatively routine legal work of the sort that used to keep first- and second-year associates busy at large law firms is also migrating away. The behemoth of “legal process outsourcing” is Axiom, which has commodified large companies’ contracting and certain litigation functions. Counsel on Call does e-discovery, contract review and abstraction, and other managed services, Raymond Law Group specializes in “price-sensitive commodity (litigation) work”). For a fixed fee, The General Counsel, Ltd will handle all of a company’s employment law matters.

Secondment Firms handle overflow from in-house legal departments and part time in-house counsel work for companies too small to need a full time General Counsel. The first step was that a lot of legal work formerly done by outside counsel migrated to in-house corporate legal departments. Now even the overflow work from in-house departments has migrated away from Big Law, too.

Last but not least, some New Law firms target the small or mid-market companies that may have been priced out by the steep rise in Big Law rates. Examples are The Mitzel Group LLP, Phillips & Reiter, PLLC, InnovaCounsel, LLP, Avökka, The General Counsel, Limited, Exemplar Companies, Inc., Burton Law LLC.) (Some of these target large companies as well.)

All this adds up to a sobering picture that helps explain why Big Law’s book of business is no longer growing by leaps and bounds. “While the … revenue that is actually being siphoned off by these non-traditional service providers still seems modest compared to the overall size of the legal market,” noted influential legal commentator James Jones, “they’re growing and they’re growing every single year.” Big Law used to do the entire spectrum of legal work, from low- to high-complexity. Now “the unbundling taking place in the corporate legal market” means that the “’fat middle’ of ‘meat and potatoes’ legal work” is being siphoned off, much of it to New Law. It’s classic disruption.

So here’s the real story. Big Law attorneys are notably unhappier than most other lawyers, for a variety of reasons. Far and away the most common one given by the Big Law refugees who have founded New Law companies is the desire for work-life balance. Recent research suggests that what Big Law offers—one-off individual accommodation policies—are not effective. Typically, the people who use them suffer the worst of both worlds – they’re stigmatized, but find themselves working full time for part-time pay. What New Law offers is what leading researchers now agree is a more promising formula: they hard-bake work-life balance into the business model.

New Law firms offer attorneys two very different types of alternative schedules. The first is genuine part-time work that can be done from home. This is popular both with lawyers who self-identify as stay-at-home parents and with those who have second careers (Counsel on Call is headquartered in Nashville and provides day jobs for musician-lawyers there). The second is full-time flex: 40 to 50 hours a week (but no more), worked from home, with completely flexible hours and the ability to be show up for dinner and vacations with your family. A lot of men want full time flex, alongside many women. “Many of our lawyers, myself included, had a difficult time while in full-time private practice fully committing to events, vacations, and time with their families and friends. That’s one reason many lawyers, including many men, are leaving Big Law,” said Eric Schultenover of Counsel on Call. Another Big Law refugee, Charulata Pagar of VLP Partners LLP, whose earnings increased when she left her firm (taking clients with her), said she also loved the fact that she was “at home with my seven year old who didn’t get into camp this week.” What’s not to like?

Law firms that drive their people relentlessly will lose a portion of those people – they already know that. The bigger threat is that astute, highly competitive entrepreneurs will organize those defectors and steal the relatively routine types of business that have always kept Big Law’s lights on. Or that entrepreneurs will found virtual and secondment firms that steal away high-value work, and offer all lawyers the flexibility and freedom Big Law won’t.

Whether it’s Amazon or a Big Law firm, large companies that offer only one gear – overdrive — should take notice. There’s strong demand in the market for work-life sanity, and creative entrepreneurs are inventing new business models to meet it. They’ll steal your people – and your business.