"More Lawyers Skip the Partner Track to be Entrepreneurs" reports the New York Times today in an article by Eilene Zimmerman (the online version appears here with a slightly different headline from the print version). Zimmerman profiles a number of lawyers who went out on their own, part of "what appears to be a trend of lawyers in their mid-20s to early 40s leaving large firms to start their own small ones." Among their struggles are time-management, client development, billing, and leveraging start-up costs/overhead.
Should law schools offer education on these and related matters targeted to lawyer-entrepreneurs? I say yes.
Here at Michigan State I've partnered with my colleague Dan Katz on new curriculum to prepare lawyer-entrepreneurs, including the creation of a summer program, 21st Century Law Practice, to be held at the University of Westminster in London June-July 2012. And I know other law schools are offering educational opportunities for entrepreneurial-minded students, like Michele DeStefano Beardslee's LawWithoutWalls at Miami Law, which brings together students from around the globe and matches them with entrepreneurs, practitioners, subject matter experts, academic advisors, and venture capitalists. (I wonder whether David Segal--if you missed it earlier this week see here and here--will focus his next legal education article on programs like these and others, where schools indeed are teaching lawyering, along with other skills necessary to create and sustain a vibrant law practice in the 21st century...)
WSJ Law Blog (and lots of other sites) When we talk about inclusion and exclusion in the legal profession, we invariably end up asking about the role of merit — and how to gauge merit — in the process of admitting students to law school, offering jobs to applicants, and appointing people to elite positions. President Obama’s recent picks for the federal judiciary have set all time marks for diversity in terms of women and non-whites. At the same time, a recently broken news story — who leaked this info and for what purpose? — suggests that the ABA’s vetting committee for judicial nominations has delivered “unqualified” ratings to a number of possible candidates floated by the Obama administration, and that the “unqualified” ratings have disproportionately hit women and non-whites. There have been hints that some of the unqualified ratings may be explained by a lack of trial experience.
[Despite what it says below, this was posted by John Steele.]
ABA Journal has the news. I'm very curious to see how many graduates will be included in the new reporting category for students employed short term by the school itself. I've never heard any justification for those hires other than to juke the stats, and now that the schools will have to report that status, I imagine that there will be little reason to keep playing that game.
Herald Tribune: "[Defendants] Dowden and Sterbinsky argued that the statute of limitations for fraud had passed, while [the lawyer] Rosin said he merely performed his duties as a real estate attorney and had no obligation to disclose the existence of the so-called flip or alleged wrongful acts of his client."
"A lawyer owes no such duty," Rosin said in his motion to dismiss the case. "Rule 1.6 of the Rules of Professional Conduct gives a lawyer the option to make such disclosures by providing that a lawyer 'may' disclose anticipated criminal or fraudulent misconduct that is likely to result in substantial financial injury to others. However, the lawyer is never 'required' to make that disclosure.
Over a rainy Sunday, I commented heavily over at Prawfsblawg on the NYT article by Segal. Here's a more concise view of my take on it. [I've added a few edits to the post and tried to put them in brackets.]
For an article pitched to a general audience, Segal got lots of stuff correct.
We’ve heard all this before, so let’s not over-react just because it’s now front-page news.
Yes, for a more nuanced analysis, read Henderson, Ribstein, Tamanaha, etc. But also recognize that Segal is writing for a general audience.
His potshots at law review articles with seemingly funny titles was an over-reach.
Segal didn’t argue that the recent hiring troubles are simply a matter of schools not teaching practical skills and no one believes it’s that simple. But, if he did argue that, he was wrong, because it's more complicated than that.
[University-based] schools haven’t taught practical skills for a long time—or, perhaps, never really have in the last 100 years
As Brad and other have pointed out, there was lots of fevered hiring of new graduates in recent times—even if practical skills weren’t being heavily taught in law schools.
But, even when that recent hiring was happening, corporate GC’s were doing what they could to avoid paying for first year associates’ time. There just wasn’t much that the GCs could do about it, especially when we were in economic up-cycles.
Those of us who were in heated discussions with client GCs even back in the 1990s about the costs of first year associates know that this is not a recently invented concern. It’s been brewing for a while. (I’ve used ppt slides to make this point in my Legal Professions course for over a decade now.)
While the concern has been around for a while, there was nothing GC’c could do to stop it—except complain. They now have options, as discussed below.
We’re being hit by a double-whammy: (1) we’ve had a huge downturn in the national economy, and (2) the boundaries of the legal profession have become significantly more porous.
Some people think we’re simply in a slightly longer than usual down-cycle that will become an up-cycle at some point. While we’re in the down-cycle, corporate GCs have lots more leverage over law firms.
Others (including me) think [that there is also a second change afoot]: a variety of factors have combined to undermine the way big law firms have done business for the last 25-30 years. Those factors include the disaggregation of legal services, the huge build-up of human capital inside corporate law departments, the globalization of certain legal and quasi-legal services, and the corporate clients’ use of sophisticated cost containment techniques. (I was speaking to law firm GCs about "disaggregated" legal work and "hollowed out" work back in 2007-08.)
If the latter factors explain some of what’s going on, then there will be a new normal of some type even when the economy picks back up.
If the latter factors explain some of what’s going on, it will have a lasting impact on the economics of law school.
On top of that double-whammy, law schools have heaped economic pressure on law school students. Law school tuition has increased and schools have used a combination of financial aid and IBR to essentially squeeze as much revenue from law students as the schools can squeeze.
Back when I went to law school, investing in the degree was a no-brainer as an investment.
These days, lots more law students are buying degrees that may not be sound investments. [See the new article by Herwig Schlunk.]
Compounding the difficulty of deciding if the degree is a sound investment has been the practice of some schools to “puff” or “blow smoke” or outright lie about the economics of their graduates.
The law degree will remain a terrific investment for lots of students but may have become a bad investment for more students than ever before. If so, law schools will be taking some heat. (“[Loyola 2L,]” where are you?)
This is a healthy development, not a sinister movement. Lighten up, guys.
Law schools ought to be sensitive [and attentive] about adding value.
Law schools, being significantly insulated from market pressures for some time now, have done what just about everyone would do in that situation: they’ve spent money on themselves and have chosen to spend their money on the things that they particularly value. [Professor's satire on this point here.] What law faculties value isn’t [necessarily] what corporate clients value. (For example, right now there’s a vogue in law schools for “interdisciplinary” studies. I can’t speak to the academic value, but I predict that the market will be underwhelmed by that.)
[Successful rent-seekers tend to generate and internalize justifications as to why their control over price, output, qualities, and terms is a public benefit showered on the rest of us. The rest of us don't have to buy those justifications. Once you've internalized those justifcations, it's easy to view market pushback as some sort of [vicious] attack. It isn't.]
Law schools control the accreditation process and, not surprisingly, have used that power the way any rent-seeker would. If the market is now pushing back against that rent-seeking, let’s not consider that a conspiracy. Successful rent-seeking isn't a [moral] entitlement.
Adding practical skills is part of the answer but certainly not all of it. Students heading for the top end of the profession need to understand the new “disaggregated” legal services market and thrive in it.
One obvious [albeit partial] solution is to permit an educated, enlightened student body to have much greater say over the curriculum.
One crazy solution is to bring back the LLB and let undergraduates study law the way they now study accounting and business management. (I'd like to see this. For example, if San Jose State were to add an undergrad law degree, we'd have lots more diversity in the profession and the students wouldn't be burdened by debt.)
One obvious problem from all this: the law degree will be seen as a sound investment by the people most able to pay the upfront costs and then recoup them over a long period of time. My guess is that the 50,000 new enrollees [each year] will not be getting any more diverse and presumably will get marginally less diverse. If so, that means that 10, 20, 30 years from now we will have a limited pool of experienced people for the top slots in our society.
The article in the Sunday NYT has gotten a lot of people stirred up in law schools, even though this is a very old debate. Brian Leiter calls it a "hatchet job," Prawfs calls it half-baked, and pretty much every other legal education blog has reacted critically, including Balkinization, Concurring Opinions, and Conglomerate. Sloppiness aside (e.g. saying that criminal procedure is about common law crimes), the thesis of the article is utterly implausible. It strongly suggests, even if it doesn't come out and say, that the recent decline in hiring is caused by the lack of emphasis on skills training in law schools. It bolsters this thesis with quotes from law firm and in-house lawyers complaining that they have to spend time teaching new graduates to practice law. But the article completely ignores the fact that prior to 2007 these very same employers were hiring like crazy and not complaining about what their new employees learned in law school. I'm no empiricist, but it shouldn't be hard to demonstrate that the economic downturn led to a substantial decrease in the number and size of deals and other transactional/advising matters, without an offsetting increase in litigation and bankruptcy work (which I find somewhat surprising). Mabye this is a "new normal" as Bill Henderson and others have argued, as clients have finally gained some leverage over firms and are pushing back on high billing rates and overstaffing. On the other hand, perhaps the downturn is cyclical, and in a few years we'll be seeing firms hiring anyone with a pulse as they try to gear up to represent clients in some new bubble economy -- the sequel to the dot-com and asset-securitization booms. Either way, though, the connection between highly theoretical law review scholarship and the fall-off in attorney hiring is non-existent.
Speaking of highly theoretical law review scholarship, the article quotes me making the point that the legal academy has one foot in the legal profession and one foot in the university. I gave my usual schtick about law schools not wanting to be seen within the university as trade schools. Brian Leiter says he'll assume I was quoted accurately (which is a fancy way of saying, "that's a dumb-ass thing to say"), but "I have to say in nearly twenty years in law teaching, I've never met anyone in the legal academy who had this worry." I was pretty obviously speaking hyberbolically, as I tend to do, but just so my meaning is clear I'll tone down the rhetoric and retell a very well known story from the history and sociology of the legal profession: Lawyers need to justify their monopoly over the provision of certain kinds of services. Why should lawyers exclusively be entitled to draft contracts and wills, prepare petitions for divorce, advise on the interpretation of insurance policies, and so on? In many legal systems these tasks (what Llewellyn calls "law jobs") are performed by occupational groups other than full-on licensed lawyers, such as judicial scriveners and in-house legal advisers in Japan, conseil juridiques in France, notaries in many civil law jurisdictions, and conveyancers in the UK, Australia, and New Zealand. By contrast, the American legal profession has been remarkably successful at defending its professional prerogatives. I'm going to be teaching unauthorized practice of law this week in my PR class, and I predict the students will be surprised at how vigorously state bars pursue potential competitors such as LegalZoom. How did the organized bar pull this off?
One explanation is that the bar has been pretty good at maintaining its public image. Of course people distrust, dislike, and make jokes about lawyers, but the profession as a whole has long enjoyed a great deal of social prestige. (At this point in the story it's customary to quote Tocqueville and cite the prominence of lawyers in government.) As Robert Stevens and many other commentators have noted, lawyers occupied a position of social and political prominence in the United States that they never enjoyed in England. One way the profession has maintained this prestige is by borrowing from the prestige of the university. The Carnegie Report notes in the introduction that the German model of the university, with its claim to be a center of value-neutral technical expertise, attracted a great deal of admiration. Leaders of the legal profession in the U.S. figured out that they could tap into this source of social esteem by locating legal education firmly within the university. Professional prerogatives could be defended by appealing to scientific rationality -- hence, Langdell. Not only Harvard and Columbia, but other law schools begun in the 19th Century, such as Georgia and Albany, claimed to offer instruction in law as a science, implicitly contrasting with the unscientific apprenticeship system in which lawyers traditionally were trained.
This is what I mean by trade-school anxiety. The legal profession wishes to borrow from the prestige of university education. Nowadays that prestige is based on the very things the NYT article is complaining about: A system of peer review and tenure that allows scholars to pursue ideas for their own sake, without worrying too much about whether they are useful to some industry or another powerful faction in society. Frank Pasquale has an interesting post at Balkinization making a similar point. He sees the ideological underpinning of the NYT article as rooted in the desire of powerful clients and law firms for an inexpensive pool of labor. He summarizes the thesis of the article as "law schools are not doing enough to increase corporate profits." If all law firms want is a bunch of low-paid workers they could probably get it. It would take a long and intense lobbying struggle, but if the organized bar objected strongly enough to the current system of legal education, it could force a relaxation of accreditation standards at the ABA level, or changes at the state level to allow more options for admission through avenues such as apprenticeship or training at non-ABA accredited law schools. But that's not going to happen, because the profession wants to bootstrap its prestige off of the prestige enjoyed by universities.
Of course, universities are under attack, too. The political right has had a lot of fun in recent years finding outrageous titles of articles and making universities look like some kind of refuge for people who never got out of the 1960's. Universities don't always do a very good job defending the notion that there is something vitally important about pursuing ideas for their own sake. If the right succeeds in delegitimizing universities, then the legal profession may have less of an interest in maintaining the existing system of legal education. As law professors, one thing we can do is be more articulate defenders of the system, and to react a bit less defensively when it is questioned. The NYT article may be sloppy, but it's not unfair to ask that we, collectively, explain why it is important to hire and evaluate faculty members based on their production of esoteric-sounding articles.
It's also not unfair to expect us to be committed teachers as well as scholars, and in our teaching to be aware of what our students need to know in order to be successful as lawyers, not because it contributes to corporate profits, but because it's a good thing to be a good lawyer. The article does not begin to demonstrate that there is a crisis in law school teaching. As Erik Gerding points out in his post on Conglomerate, many of us write highly theoretical scholarship but teach in a very practical way. It wouldn't be hard to find a passage in my book that makes me sound like a woolly-headed idiot, but my teaching evaluations consistently say nice things about the way I teach from a standpoint of what students are going to need to know when they are out in practice. If I thought most of my colleagues were spending most of their class time talking about highly theoretical issues that had no bearing whatsoever on what lawyers did in practice, maybe I'd worry. But I have not seen evidence that teaching at most law schools is problematic in this way.
Now the cost of legal education, that's another story ...