[. . .] I graduated from [elite university] with a B.A. in [social science major] in 1994. I was on scholarship, so I managed to graduate with no debt. Not that these things matter 20 years after the fact, but I had a 3.6 GPA and a 178 LSAT. I worked for [politician] between college and law school. I graduated from [top ten law school] in 2000. My GPA was a 3.5, which was well above the mean but not good enough for law review. I clerked for a federal district court judge from 2000-2002, during which time my law school loans were in forbearance. My point is that, although my resume wasn’t printed with gold ink when I began my legal career, my credentials were good.

[. . .]

I was laid off in late 2010, and I have been out of work ever since. There were no accusations of misconduct, no complaints about my work. The law firm was downsizing, and that was that.

[. . .] Since I was laid off, I have floundered around, applying for jobs, representing a few clients as a solo practitioner (not that that has been lucrative – think very low five figures per year), and trying to figure out “What happens to all of the lawyers?” [. . .]

From www.insidethelawschoolscam.blogspot.com, February 26, 2013

young-people-are-being-exploited-to-sustain-the-lawyer-bubble

If you’ve been online at all within the past couple of years you are probably familiar with posts like the one above, from Professor Paul Campos’ Inside the Law School Scam blog.  The problem of lawyer and law graduate unemployment have been covered recently in the Wall Street Journal, The Huffington Post, US News and World Report and the New York Times, and the bloggers at Above The Law have been discussing it for years.  It’s a complicated issue having to do with, among other things, the cost of going to law school, the fact that student loans are not generally dischargeable in bankruptcy, and the ongoing effects of the Great Recession.

Now here come the books, although the doom and gloom is not limited to recent graduates’ prospects.  First to hit the shelves was Richard Susskind’s Tomorrow’s Lawyers: An Introduction to Your Future (Oxford Univ. 2013).  In fairness to Susskind, who is a British IT consultant, he wrote about many of these issues in his earlier book, The End of Lawyers: Rethinking the Nature of Legal Services (Oxford Univ. 2008).  The relative newcomer to this genre is Steven J. Harper, a former partner at Kirkland & Ellis and now author of The Lawyer Bubble: A Profession in Crisis (Basic Books 2013).  (Both men share, apparently, a fondness for subtitles.)

The Lawyer BubbleHarper’s book is more autopsy than prescription, so we begin with it.  The Lawyer Bubble limits itself to discussion of law schools and the largest law firms (so-called BigLaw), but what it has to say about the state of the profession is pretty scathing.  Harper points to Christopher Columbus Langdell, Harvard Law School dean and founder of the case method of law school instruction, as the “essential foundation” of the problem – and the problem is that there are too many lawyers.  He says that the case method permitted law schools to abandon the time-intensive lecture-and-internship model that held sway before 1890 and turn to “mass production of attorneys.”  In turn, law schools became profit centers for their universities, all the while having little incentive to turn away applicants because student loans became essentially non-dischargeable in bankruptcy in the 1970’s.

Both the American Bar Association and the US News & World Report law school rankings have a share in the blame, according to Harper.  The rankings have become hugely influential and law school deans, although initially reticent, have embraced them.  According to Phillip J. Closius, former dean of the University of Baltimore School of Law, “[m]illions of dollars [are] riding on students’ decisions about where to go to law school, and that creates real institutional pressures.”  Yet Harper argues that the rankings are deeply flawed.  He cites incredible examples, including one in which a dean circulated a law school ranking survey similar to the one used by US News, and respondents rated the law school at Penn State as a mid-level school despite the fact that Penn State at the time did not have a law school.  He describes efforts at the University of Illinois College of Law to bolster its incoming GPA and LSAT numbers, which count for twenty-five percent of a school’s rating, which resulted in the blatant falsification of the numbers.  (The employee responsible for submission of the information was blamed, and although the law school dean was absolved of wrongdoing, the ABA censured the school, imposed a $250,000 fine, and required that the school submit to compliance monitoring for two years.)

And then there is the employment data.  Before 2012, the ABA applied an extremely broad definition of “employed,” so that when law schools provided graduate employment data, they made no distinction between working in a law firm as an associate and working in a coffee shop.  Many schools reported employment figures as high as ninety-three percent even during the recession. Yet in 2012, according to Harper, only sixty-six percent of the class of 2011 worked in jobs requiring bar membership, and many of those were part-time or temporary positions such as clerkships.  Schools made a practice of offering paid temporary positions to graduates that conveniently started before and ended just after the window of time set for employment data gathering.  When, in 2012, the ABA began to require that schools disclose such arrangements, several low-ranked schools revealed that they employed more than fifteen percent of their own graduates.  All of these factors led to a flood of incoming law students and the creation of a “lawyer bubble” not unlike the real estate bubble of the mid-2000’s.

Harper heaps his wrath upon BigLaw firms as well, arguing that they have increasingly abandoned the traditional “true partnership” model for a pure business model that values profit over anything else.  When income determines all, he argues, individual lawyers adopt a “what’s in it for me?” attitude and move freely between law firms, taking their lucrative books of business with them.  In order to hold on to their most valuable business-getters, firms offer higher salaries (or, as in the case of Dewey & LeBoeuf, salary guarantees); to make the numbers work, they cut support staff and attorneys considered less valuable to the firm.  The result, Harper says, is that BigLaw firms have become oligarchies where a small number of attorneys achieve exceptionally high earnings and the lawyers who find themselves shut out become demoralized. Harper devotes more than a few paragraphs to lawyer suicides, such as the suicide of Mark Levy in 2009.  He also details several case studies, including Dewey & LeBoeuf as well as Finley Kumble, whose failure in the late 1980’s mirrored Dewey’s.

Harper advocates for several changes: abandonment of the billable hour and “eat what you kill” systems; implementation of true “partnership” schemes within law firms to encourage loyalty and real mentorship; and implementation of mandatory retirement policies so that younger attorneys have an opportunity to move up the ladder.  He also suggests that businesses such as Axiom and other out-sourcing vendors should encourage firms to streamline their processes and learn to better utilize technology.

Technology, and the way it will change the practice of law, is squarely within Richard Susskind’s bailiwick.  Tomorrow’s Lawyers is less an indictment of the way things have been done than a prediction of how they will be, and if Susskind is correct the future looks very different.  (However, it’s worth pointing out that Susskind is most familiar with the British legal system, and that system differs from the United States’ system in significant ways, including in permitting non-lawyer investment in law firms.)

book-tomorrows-lawyersLike Harper, Susskind argues that the billable hour has had its day and should be retired.  But this would only represent the first of a number of transformations he proposes.  More traditional “legal” work should be performed by non-lawyers, in much the same way that certified nurse practitioners have taken on many traditional physician functions.  Susskind would include within this category document review in litigation, due diligence work, basic contract drafting and basic legal research.  This is work that involves more “process than judgement” and should, in time, be further commoditized so that it is performed entirely by computers.  Another proposal would permit clients with similar interests to “collaborate,” and set up a shared fully-owned “law firm” to serve their mutual needs.  He uses banks as an example, and claims that they could own a shared “service centre” to undertake compliance activities at reduced costs.  (He does not address here, I note, any conflicts issues that might come up, although presumably those could be dealt with in the firm’s operating documents.)

Much attention is devoted to the idea of commoditizing legal services.  Susskind breaks down (or “decomposes”) litigation into specific tasks, such as document review; research; strategy; tactics; negotiation; and advocacy.  He claims that although strategy, tactics and advocacy, at the least, have traditionally been the province of lawyers, he is “increasingly hearing from General Counsel that alternative providers can now take on the remaining tasks at lower cost and to a higher quality than traditional law firms.”  In some cases this involves outsourcing work to a third-party.  In others, work may be subcontracted from one law firm to another.  Susskind raises the possibility that, in the future, many legal problems will be crowd-sourced before they are ever presented to a lawyer for consideration.

Most of Susskind’s predictions involve the elimination rather than the creation of legal jobs.  He closes the book, however, with several positions he believes will be created in the future: the “legal knowledge engineer,” who will program the software necessary to perform commoditized legal work; the “legal technologist,” who will “build the foundations upon which legal service is built and the channels through which non-lawyers can access the law,” and as for what that means, your guess is as good as mine; the “legal hybrid,” who will be both family lawyer and marriage counselor or commercial lawyer and strategy consultant; and the “legal project manager,” who will oversee a project once it has been “decomposed” and outsourced to ensure that its various components are completed on time and within certain quality parameters.  (There are more, but I am finding this exhausting.)  Susskind rather grudgingly concedes that there will be “Expert Trusted Advisers” and “Enhanced Practitioners” in the future, but there will not be many of them.  He closes with advice to young lawyers, or those considering law school, to follow the example of Wayne Gretzky and “[s]kate where the puck’s going, not where it’s been.”

The Careerist blog currently features a photo of a woman in a cage to illustrate a post about why women don’t advance to ownership status in law firms.  

While I agree that women do not make up a fair percentage of the equity partner ranks, I disagree that flex time and diversity initiatives and increased mentoring are going to fix the problem.  The problem lies with the way firms are structured and with the way they make money.  It isn’t feasible economically to move women up if they aren’t billing what their male counterparts are.  This means that the solution is one of two things: either women, in large enough numbers, will make the sacrifices necessary to bill a lot, to form client relationships, and to ascend; or firms will find a way to profitably advance the interests of female associates.  The second option will require significant changes in law firm culture and business structure.  The fact that clients may insist that matters be diversely staffed is meaningless; businesses of all kinds have employed tokens for decades to head off gender and race issues. 

Internal change will occur when the billable hour makes way for alternative billing arrangements based on delivery of value, but that change will not be initially positive for women.  Firms will probably slough off associates by the hundreds, and that will affect women (and probably racial minorities) disproportionately.  There will probably be a few more Howreys.  Firms will need to become leaner and smaller, and the process will be painful.  I believe that the greatest hope for female advancement lies with the trend towards smaller, boutique firms, many of which will be founded by former BigLaw partners in the coming years.  These boutiques will feel downward pressure from clients to hire women, and it is much more difficult for smaller firms to “up and out” associates.  The cost of attrition is too high.  Women who perform well in those environments should expect to advance to ownership in good numbers. 

All of this assumes a smaller associate workforce, though, as orphans from the prior few years transition out of law entirely and as law school class sizes shrink.  The current associate workforce is not sustainable under an alternative fee system.  If class sizes remain stagnant – which they could, since student loans are non-dischargeable in bankruptcy, so lenders and schools have no real incentive to cut back – we stand to see a glut of youngish lawyers on the market competing for limited job opportunities.  That picture is not appealing from a diversity perspective.  Or any perspective, really. 

I think the legal industry is poised on the edge of a precipice.  The question is how Icarus-like we choose to be going forward.  Law schools must make employment statistics more transparent.  Applicants have a right to know that ten percent of a school’s “employed” grads are actually working as legal secretaries or worse.  Some sort of initiative must be taken to address the problem of outstanding student loans.  Unlike mortgages, student loans are not dischargeable; law graduates who might otherwise move to a more efficient employment market are unable to do so because of pressure to meet their loan payments.  The need to hire the best and brightest graduates, in turn, places pressure on firms to increase their hourly rates.  The whole system is fractured at its core.   And the one entity that could take a fairly effective crack at fixing it is in serious denial about the whole thing. 

If you agree, don’t pay your dues next year.  I don’t think I will be.