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Letter to the ABA
March 10th, 2013 / By Deborah J. Merritt
A “Coalition of Concerned Colleagues,” which includes me, has submitted a letter to the ABA Task Force on the Future of Legal Education. Although I can claim no credit for drafting the letter, I think it offers a succinct statement of the economic distress faced by law students and recent graduates: tuition has climbed dramatically, scholarships rarely address need, entry-level jobs have contracted, and salaries in those jobs have declined. The combination is oppressive for students and unsustainable for schools.
The brief letter notes a number of changes that might ameliorate this burden. All of those deserve exploration; I have posted on several already and will explore others in upcoming weeks. The letter, however, leaves a key point unstated: tenured professors at most schools will have to change their expectations if we hope to address this crisis. Faculty salaries and other perks account for a substantial share of the budget at most law schools. We can try to cut corners in other ways, by trimming staff and begging central administration to leave us a higher share of each tuition dollar. But in the end, we have to ask ourselves hard questions about the professional lives we’ve designed and the pay we demand.
Law professors earn high salaries, considerably higher than the pay drawn by most of our colleagues across the academy. Much of that money comes from the tuition paid by our students. With job and salary prospects down for lawyers, and with more transparency about those outcomes, fewer students are willing to pay our tuition. Faculty are going to have to adjust their financial expectations–and I think we should. We have enjoyed artificially high tuition and salaries for many years, due largely to our powerful economic status as gatekeepers to the legal profession. States didn’t create those restraints to enrich law schools, and we have served few interests (other than our own) by aggressively raising tuition and salaries over the last three decades.
In addition to lowering our financial expectations, faculty most likely will have to adjust the courses they teach, the ways in which they teach, and other professional activities. Distance education, for example, can help reduce the cost of legal education–but only if faculty are willing to use those techniques and then to consolidate courses across schools. One faculty member can teach Antitrust or Remedies to students at several law schools, but the faculty at those other schools must be willing to shift to other courses.
Adding apprenticeships and externships, similarly, will affect what current faculty do. We can’t expect students to pay for the full range of courses and scholarship our faculties now support plus the cost of apprenticeships or externships. These hands-on experiences will have to replace some of our current offerings, with traditional doctrinal faculty downsizing or taking on new duties.
Changes of this type are implicit in the letter from Concerned Colleagues, although I haven’t discussed these specifics with other signatories. Schools may find alternatives to the particular changes I’ve mentioned here; we need creativity to address the challenges before us. But it’s essential to avoid magic thinking when confronting those problems. The key difficulty for our graduates, students, and prospective students is that legal education has become too expensive for the career paths it supports. There is no magic solution to that problem in which we all become richer.
Captive Firms and Jobs
March 9th, 2013 / By Deborah J. Merritt
Kyle McEntee, my co-moderator here at the Cafe, and Kevin Outterson, Chair of the Strategic Planning Committee at the Boston University School of Law raise some important issues about law school firms. I want to thank Kevin in particular for sharing his views and letter to the ABA Section of Legal Education with us.
I agree completely with Kevin and Kyle that we need to guard against post-graduate law schools becoming just another way for schools to pump up employment statistics at the nine-month reporting mark. Some law schools already hire a significant percentage of their own graduates in short-term positions to achieve that result. Currently, the most common jobs in that category seem to be research assistance for the schools’ professors, fellowships at government or public interest agencies (with a small stipend from the school), and school-subsidized work with private employers. These positions achieve some laudable results: they provide a small amount of financial relief to heavily indebted graduates and, in some cases, help grads land more permanent positions. But there is little doubt that law schools also maintain these programs to improve their employment figures.
I’m less worried than Kevin that post-graduate law firms will worsen that trend. These law firms require much more time, effort, and expense to create than the positions described above. Why would a school go to those lengths when it can already report graduates as employed simply by funding low-paid research positions with the school’s professors? At worst, the post-graduate law firm positions will achieve the same reporting results but with more practice-oriented opportunities for graduates. The law school firms also seem to promise more lasting and remunerative employment; Arizona State’s new firm will employ graduates for up to three years. That type of commitment allows a more genuine opportunity to develop practice expertise and a client base than the short-term, part-time fellowships that some law schools currently offer.
We do need to remain vigilant about how law schools report their graduates’ jobs. The ABA’s decision to collect and report information about school-funded jobs was an important step; that information now appears on a special site maintained by the Section on Legal Education. The Section also requires schools to disclose this information on their own websites, using a worksheet designed by the section. Law School Transparency recently documented which schools are complying with that requirement.
This partial transparency is an important step, but there is still room for many abuses. Deans, for example, can ask alumni to hire graduates for a short period surrounding the employment date. Those graduates will register as “employed, short-term,” on either a part- or full-time basis. The jobs can be fleeting and low paid; since NALP collects salary information only about jobs that last a year or more, the school runs no risk of lowering its salary figures. As long as the alum, rather than the school, funds the graduate, the job won’t appear in the “school funded” column.
We need to figure out ways to deal with this type of data manipulation. One approach, which I’ve followed in my own research, is to count only full-time, permanent jobs. My point here is that, however we address this problem (and I agree that it is a major one), I think the problem exists independently of post-graduate law firms. At worst, these firms may fall in the same category as law-school-funded jobs, temporary arrangements with alumni, and other contemporaneous tricks of the trade–but with better experiences and pay for graduates.
A more serious concern raised by Kyle is that law school firms will temporarily mask the real problem, that schools are graduating more lawyers than the economy can support. If post-graduate law firms take work from other practitioners or legal aid organizations, then we are simply shuffling work around. Some graduates will help start-up companies through ASU’s new law firm, but established firms will hire fewer associates. We will all fool ourselves for a few more years that there is enough work for the graduates we’re producing.
As the previous paragraph indicates, there is a self correcting mechanism for that problem. If law school affiliated law firms take jobs from local practitioners, those practitioners will hire fewer graduates (as well as fewer part-time students during law school). Law schools don’t generate legal business (unless their professors start suing one another, divorcing their spouses, and redrafting their wills on a monthly basis), so a cannibal firm will affect other opportunities for graduates.
Schools establishing firms, of courses, may hope that those firms will seize jobs from graduates of other law schools. That may, in fact, happen. If a law school creates a firm that provides excellent training, and partners with its alumni in an appropriate way, the school’s alumni may obtain a local market advantage. In addition to hiring lawyers who have completed residencies at the law school firm, local employers may favor students and immediate grads of that school over students and graduates of competing law schools. The school with the affiliated firm, after all, will have demonstrated a commitment to developing more sophisticated practitioners–and it will be working directly with alumni to achieve that result.
If this competitive motive drives creation of law school firms, I can’t fault the schools. Tight markets spur competition, and I’m sure every law school in the country puts the interests of its graduates above those of other schools. Competition, furthermore, can create winning ideas. If law school firms do provide better training and networking opportunities than other types of temporary employment, then the alumni of those schools deserve to find favor.
I think, though, that law school firms hold potential beyond a zero-sum competition among law schools. A major reason for the mismatch between the number of lawyers (too many) and the amount of legal services provided in our society (too few) is that lawyers are terrible managers. There is a growing literature on our poor management skills, which I will discuss at greater length in other posts. Suffice it to say here that we teach almost nothing in law school about the most efficient ways to structure legal services, we produce almost no scholarship on that issue, and our graduates often remain clueless on those matters.
For too long, lawyers have viewed every legal issue as a sui generis one requiring customized legal research and analysis. And who can blame them? We educate lawyers primarily through appellate opinions that present novel issues of law. Why wouldn’t they structure their law practices to follow the assumptions of novelty, time-intensive analysis, and clients whose needs will lead eventually to a path-breaking Supreme Court decision?
The real promise of law school firms lies in developing new ways to manage law practices. Legal educators, of course, are poorly suited to do that on their own. But if interested educators work with groups of alumni, they may be able to create structures that reach new client bases. Services such as Rocketlawyer and LegalForce have already developed some of the tools–not just online systems and client-friendly software (although those are important), but new methods of managing legal problems.
Law school firms have this potential, I believe, because they are new institutions. When designing an organization from scratch, it’s easier to break old forms. Most law schools also sit in the middle of a huge untapped client base: University faculty and staff. University staff, from office associates and custodians to nurses and groundkeepers, are the mid-income Americans who struggle to find legal services. They earn too much to qualify for legal aid; they don’t earn nearly enough to afford traditional legal services. But what if there were an office, bearing the trusted brand of the University’s own affiliation, that could help those staff fight foreclosures, deal with evictions, navigate divorces, create child custody arrangements, defend criminal charges (against the staff member or, say, a wayward teenager), and handle the dozens of other brushes with the law that occur during a lifetime? If we could find ways to tap that market economically, we would broaden access to legal services as well as employment opportunities.
But, and this is a big BUT, none of that will address the excessive cost of legal education. Serving middle class Americans with legal issues is an important policy objective; so is broadening the services to the woefully served poor. Serving those markets, however, will not service the debt that law graduates carry today. If we want to make legal education and the legal profession work, we need to bring down the cost of legal education, make that education more professionally relevant, and give applicants the transparent information they need to make informed decisions about the scope of professional opportunities. Law school firms can be a step in the right direction by developing new mechanisms for delivering legal services, making legal educators more aware of those mechanisms, and improving the professional training of lawyers (not just through the firms themselves but through integration with the school’s earlier education). None of that will matter, however, if we can’t break the chokehold of high tuition.
Law School Firms
March 7th, 2013 / By Deborah J. Merritt
A post-graduate law firm is an attractive idea. Recent graduates could develop skills under the supervision of more senior lawyers. The firm could provide secure placement for at least part of a school’s graduating class. And, if the firm charged low prices for the recent graduates’ services, middle-income clients might secure needed legal representation. Benefits like these are prompting some law schools to consider creating law firms associated with the school.
The idea parallels medical residencies, which provide hands-on training to all doctors. Most of those residencies occur in teaching hospitals linked to medical schools, a connection that offers a smoother, more rational path from classroom to practice than the legal profession currently offers.
Law schools exploring the creation of affiliated firms, however, readily acknowledge that the medical profession has a key asset lacking in law: private and government insurance underwrite a large portion of medical care. Teaching hospitals don’t have to chase ambulances looking for clients; the ambulances come to them–along with insurance money to pay for the patient’s care.
Establishing a client base is one of the biggest hurdles that post-graduate law firms must overcome. Arizona State’s Sandra Day O’Connor College of Law, which will launch a post-graduate firm this summer, plans to draw some business from other university initiatives. The ASU “Alumni Law Group,” for example, will work with start-up companies nurtured by ASU’s innovation center and with nonprofits assisted by its nonprofit center. The firm will also reach out to veterans and the Hispanic community.
The ASU business plan contemplates charging $125 per hour rather than the $250 per hour billed by other firms in the area. One question is whether that discount will be sufficient to draw sufficient clients to the firm. And if it is, will the firm draw work away from existing firms (including other ASU alumni) or will it tap new clients?
The University of Utah’s S.J. Quinney College of Law follows a different business model. Utah’s “University Law Group,” founded in November 2011, charges just $50 per hour and focuses on providing basic services to low- and mid-income families. Even at that rate, the project has had some difficulty building a client base. Dennis Gladwell, a retired BigLaw partner who supervises Utah’s University Law Group, notes that local firms have not referred smaller cases to the Law Group.
For law schools exploring creation of a post-graduate law firm, there are at least two indispensable references. One is an article by Bradley Borden and Robert Rhee, outlining the concept of a law school firm. The other is a report prepared by Hanover Research on programs that help law graduates transition to solo practice. That report focuses on solo incubators, but offers some information about post-graduate firms.
I’m intrigued by the concept of law school firms, and hope others will offer their insights. Here are two thoughts to start the discussion. First, I think these firms offer the most promise if they tap new client markets. Small businesses, as well as low- and mid-income individuals, have unaddressed legal needs. If we can respond to those needs, that’s a win-win-win for law schools and the legal profession: We would ameliorate a longstanding problem in our justice system, offer better training for new lawyers, and avoid the specter of simply shuffling legal business from one graduate to another. Indeed, if law schools can not find new client markets to tap, then we have to face the fact that we are graduating far too many lawyers.
Second, to tap those markets, I think law school firms need to re-think existing practice structures. We need to think hard about which tasks demand a senior lawyer’s attention, which ones can be handled by new graduates, and which ones can be completed by law students, paralegals, or computers. Creating a law firm in which graduates perform customized tasks for clients won’t prepare those lawyers for the way most law will be practiced in the twenty-first century. Nor will it allow those lawyers to support themselves by serving a low- or mid-income client base.
Despite the many challenges to establishing a post-graduate law firm, law schools have one advantage: We have access to an employee base that ranges from college students interested in exploring law practice, through law students, recent graduates, and experienced alumni. Can we use those personnel to create logical, efficient, and economical systems for handling legal problems? Could we, for example, use college interns and 1Ls for some paralegal and clerical tasks; trained 2Ls for some intake; 3Ls with licenses for basic legal work; residents for more advanced work; and supervising attorneys for more complex matters–with each level supervising the one below it?
We could add to this mix professors and practitioners willing to offer workshops or instructional materials to the public. Those efforts, like Houston’s Peoples Law School, would perform a public service and perhaps also draw clients. The post-graduate firm could also connect to alumni practitioners, referring to them cases that exceed the firm’s capabilities.
If we can design practice structures of this type, I think a post-graduate law school would have the best chance of achieving all of its goals. And, by bringing schools and practitioners together, it might help us create more efficient methods of delivering legal services.
Rising Student Debt
March 6th, 2013 / By Deborah J. Merritt
Student debt has risen to unprecedented levels. The total approached a trillion dollars by the end of 2012, and the figure continues to rise steeply. According to a recent report from the Federal Reserve Bank of New York, student loans were the only type of household debt that continued to rise throughout the Great Recession.
Mortgage debt, which currently totals eight trillion dollars, still overshadows debt from student loans. But student debt now constitutes the second largest category of consumer debt, drawing the attention of economic forecasters.
Student debt provokes concern, not only because of its size, but because of increasing delinquency rates. Student loans now lead all other categories of consumer debt on non-payment: 11.7% of student loans are at least 90 days delinquent. Delinquency rates for student loans, furthermore, show a sharp upward trend (p. 9), while those for other types of household debt are declining.
Even those figures underestimate the looming shadow of student debt. As the Federal Reserve Report notes in footnote 2 of its report, “delinquency rates for student loans are likely to understate actual delinquency rates because almost half of these loans are currently in grace periods, in deferment, or in forebearance and therefore temporarily not in the repayment cycle.” The delinquency rate for student loans that have actually entered repayment is “roughly twice as high” as the 11.7% official rate. For more discussion of this issue, see this post on Liberty Street Economics, a blog authored by some of the economists working with the Federal Reserve Bank of New York.
So both student debt and delinquency rates on that debt are growing rapidly. What impact will those phenomena have on individuals and the economy? No one knows for sure, because our economy has no experience with student debt of this magnitude. The mechanics of student loans–which feature private and government lenders, deferral periods, and changing repayment plans–are also more complicated than other types of household debt.
Recent analyses by the economists at the NY Federal Reserve Bank, however, raise red flags about the impact of student debt. The economists found that “the growth in student loan balances and delinquencies was accompanied by a sharp reduction in mortgage and auto loan borrowing and other debt accumulation among younger age groups.” These declines were “greater for student loan borrowers and especially so for those with larger student loan balances,” suggesting a causal relationship. Highly indebted graduates, in other words, seem to be deferring home and car purchases. Those decisions have implications for both the individuals and the economy.
Higher education is an engine for economic growth; it enhances the productivity of most workers. But what happens to the economy when educators claim an increasing share of that productivity? The growth in student loan debt reflects dramatic increases in tuition at colleges and graduate programs. Those increases mean that educators are demanding, up front, a larger portion of the productivity gains they help students achieve. Many of today’s graduates, especially those with high professional school loans, will spend half their working lives repaying those debts. Rather than using their full productivity gains to invest in houses, cars, or the educational future of their own children, they will send a significant portion of each paycheck to their educational creditors. We don’t know yet how that shift will affect the economy, but the early returns are troubling.
Triple Treat
March 5th, 2013 / By Deborah J. Merritt
Coursera offers a platform for high-quality university courses delivered online. The company launched its first course less than a year ago, but has already reached 2.7 million participants. The platform now includes 62 universities located across four continents. Courses span a wide range of subjects and several languages. Imagine taking a course on Early Renaissance Architecture in Italy–from a regarded “Professore” at Sapienza University of Rome. Now imagine taking that course in your own living room, in English, for free. That’s Coursera.
As an educator, I’ve been curious about Coursera–but also vaguely uneasy. What does this type of massive online course mean for the future of education? Can it reduce the cost of legal education? Or will it further diminish the demand for our product? Does the Coursera pedagogy deploy techniques that we could borrow for smaller distance-learning initiatives? What happens when you mix high-quality educators with a type of education that some of us still associate with black-and-white televisions in the corner of a third grade classroom?
Now is your chance to explore some of those questions, while pursuing two other intellectual inquiries at the same time. I just signed up for Scott E. Page’s Coursera offering on Model Thinking. The course began on Monday, so you have time to join us.
Page is the Leonid Hurwicz Collegiate Professor of Complex Systems, Political Science, and Economics at the University of Michigan. He’s a distinguished scholar in the fields of game theory, organizational behavior, and institutional design. Some of you may know his book, The Difference, which offers an intriguing account of when diversity improves decision making. Page is also, as I’ve discovered from the first few online classes, an engaging lecturer.
Participating in Page’s course is giving me some ideas about online education. I’m tracking how he integrates lectures with readings. So far, so good: each stands alone but adds to the other. (The readings, by the way, are both free and easily downloadable from the course site). I’m experiencing the impact of hypotheticals that I answer during each lecture; I think they do engage me more in the material and add to my understanding. I’m also noting, of course, that every student is answering these questions; we’re not just listening to another student respond as we might in a lower-tech law classroom. I look forward to checking out the discussion forum and taking the quizzes.
Page’s offering is designed for tens of thousands of students; it’s a massive open online course (MOOC). The techniques used in that type of course won’t translate wholesale to every type of online offering. But I’m getting a sense of the possibilities–and some ideas for any online courses I design. That’s the first benefit of taking this course, learning something about online education.
The second benefit lies in learning about a series of social science models that touch upon legal issues. If you’ve wanted to know about Schelling’s segregation model, Granovetter’s collective behavior model, and others of their ilk, this course offers an excellent overview. So far, the lectures and readings are both comprehensible and focused; you’ll learn a lot with little wasted time. Page is especially skilled at illustrating the models in commonsense ways.
That brings me to my third, over-riding reason for taking Page’s course. Legal education rests on the premise that we teach students how to think like lawyers, and that this analytic frame adds value to many professional paths. Contemporary challenges to legal education question even that premise: Do we succeed in teaching students to think? I personally have little doubt that law school teaches students to think more critically. But do we offer special value compared to other graduate (or even undergraduate) programs? What analytic models do students learn in those other fields? Are those models equally valuable to the ones we teach in law? Are they more useful in a wider array of applications? Should we be teaching more different ways to think in law school? Or acknowledging that we offer just one of many valuable paths to success as a critical thinker?
I plan to use Page’s course as a way to think about thinking–how successful thinkers approach problems, how educators teach those approaches, and how law schools stack up compared to other disciplines. I’ll post from time to time about my reflections. Meanwhile, I hope to see you in class.
Transparency Today
March 4th, 2013 / By Deborah J. Merritt
ABA Standard 509 governs the consumer information that accredited law schools provide to prospective students. The ABA Section of Legal Education and Admissions to the Bar approved changes to that standard in June 2012, and the revised standard took effect on August 6.
The revised standard was widely publicized; indeed, it followed more than a year of lively discussion about misleading practices in the way some schools reported scholarship retention and employment rates. In response to those concerns, the revised standard includes a requirement that schools publish simple tables disclosing specified information about scholarships and jobs. The ABA provides the tables through downloadable worksheets; law schools have the applicable data readily at hand.
Given the widespread attention to Standard 509, the clear obligation of law schools to provide accurate information to potential students, and the specific worksheets offered by the ABA, quick compliance with Standard 509 should have been a breeze. By December 2012, surely every accredited law school in the country would have published the two mandatory tables.
Sadly, no. In late December and early January, two members of Law School Transparency (LST) visited the website of every ABA-accredited school, searching for the tables mandated by Standard 509. Almost two-thirds of law schools still had not posted one or both of the tables mandated by Standard 509. These schools were actively–even passionately–recruiting students for the fall of 2013. Yet they had allowed an entire semester to pass without posting the basic information about scholarship retention and employment rates that these prospective students deserve to know.
Kyle McEntee and Derek Tokaz, the Executive Director and Research Director respectively of LST, detail these disappointing results in a new paper. At the same time, they have published their findings on LST’s updated Transparency Index.
Before publishing, LST sent each law school the results of their website study. More than 100 law schools contacted LST and, over the next three weeks, Kyle and Derek counseled them on how to improve their compliance with Standard 509. As a result of these efforts, the percentage of schools failing to publish one or both of the mandatory charts has fallen from two-thirds to one-third. The online index reveals each school’s compliance status during the initial LST search (click “Winter 2013 Version”) and the school’s current status (click “Live Index”).
It’s hard to find any cheer in these numbers–other than to applaud LST for their tireless and unpaid work. Schools should have complied with the basics of Standard 509 by October 2012 at the latest. Two months is more than enough time to put readily available information into a spreadsheet and post the information on the web. How many times did non-compliant law schools update their websites between August and January? How much upbeat information did they add to attract applicants? What possibly excuses the failure to post information mandated for the benefit of those applicants? Facts about scholarship retention and employment matter to prospective students; that’s why the ABA requires their disclosure.
Missing 509 charts is just the beginning of the transparency problems that LST identified in its latest sweep of law school websites. The online index reveals still more sobering information. This report raises a serious question for law schools: If we want to provide “complete, accurate and nonmisleading” information to prospective students, and I think that most of us do, then what institutional mechanisms can we adopt to achieve that goal? Our current methods are not working well.
The People’s Law School
March 3rd, 2013 / By Deborah J. Merritt
Richard Alderman is the man behind the People’s Law School at the University of Houston Law Center. Twice a year, the People’s Law School offers a morning of instruction to non-lawyers about basic legal issues.
A Houston Chronicle columnist raves about the free instruction, which more than 50,000 people have now attended. To get a taste of the sessions, you can view some materials from former classes here.
Alderman doesn’t limit his outreach to the People’s Law School. He also maintains a website, The People’s Lawyer, where members of the public can find information about the legal system and legal rights, ask questions, and find links to other materials. Both the People’s Lawyer and the People’s Law School are initiatives of the Center for Consumer Law at Houston’s Law Center.
In today’s challenging economy, programs like the People’s Law School or People’s Lawyer may seem like unnecessary luxuries at a law school. But I think just the opposite is true: more law schools should consider establishing “people’s” law programs for two reasons.
First, if there is an untapped market for legal services, it lies in people’s law. Legal jobs serving corporations are contracting due to improvements in technology, management, and outsourcing. Law graduates will continue to counsel corporate clients, but that sector will not absorb nearly all of the students that law schools graduate. If there is hope for supporting those lawyers, it lies in tapping the market for middle-income clients.
It is not clear how deep that middle-income market is, but innovators like Rocketlawyer and Legalzoom are finding out. If law schools want to keep up with those companies, and to place their graduates in jobs serving middle-income clients, they need to understand more about people’s law. It’s not enough to tell students, “go draft wills for middle-class clients,” we need to understand how that market works and whether it’s feasible for lawyers to support themselves through that work.
Second, we need to explore the role that lawyers actually play in people’s law. How much legal work can consumers do on their own, with just basic instruction? How much can they do with well prepared forms or computer software? Can third-year students or new lawyers provide cost-effective service to these clients, with just the right amount of supervision from higher priced lawyers?
Answering these questions is key to probing the future of law practice for our graduates. The answers may be sobering: it may turn out that online services, staffed by a limited number of lawyers, address most of the legal needs of ordinary people. It may be that very few of our graduates can make a living in people’s law. On the other hand, law schools may be able to help map new, profitable, and satisfying practice routes in these areas. We won’t know until we try, and we owe it to our students to find out.
Alderman has just become Interim Dean at Houston, so he will have plenty of balls to juggle in addition to People’s Law. I’m curious, however, how this initiative might fit with the future of the University of Houston Law Center–as well as with other law schools around the country.
Patton Boggs and BigLaw
March 2nd, 2013 / By Deborah J. Merritt
The BigLaw firm Patton Boggs announced yesterday that it was laying off 30 attorneys and 35 other staff members. The laid off lawyers were all associates or staff attorneys, but about eighteen partners have been notified that they should improve performance or find other work. With 485 lawyers on board, the lay-offs amounted to 6.2% of the firm’s legal talent. If the eighteen partners also depart, that would be a cutback of 9.9%.
According to the firm’s managing partner, Edward Newberry, the staff gave him a standing ovation after he announced the cuts. Those staff agreed that the firm was taking the right steps to make it “a great competitor in a very difficult legal market place.” Indeed, even as it cuts some attorneys and staff, the firm will move forward in other ways. It is opening an office in Dubai, moving support functions to a less expensive office in Northern Virginia, refurbishing the DC office, and looking to open an office in Houston.
The Patton Boggs announcement seems to mirror predictions published in a January report from Georgetown’s Center for the Study of the Legal Profession. The report was written by James W. Jones, a Senior Fellow at Georgetown who previously served as managing partner at Arnold & Porter, Vice President and General Counsel of APCO Worldwide, and Managing Director of Hildebrandt International. Georgetown’s Mitt Regan, the McDevitt Professor of Jurisprudence and well known expert on the legal profession, contributed. Jones, Regan, and the rest of their team know a lot about the legal profession–and they built this report on real data collected from firms.
The sobering conclusion of this report, presented in the opening lines, is: “At this point, it is becoming increasingly apparent that the market for legal services in the United States and throughout the world has changed in fundamental ways and that, even as we work our way out of the economic doldrums, the practice of law going forward is likely to be starkly different than in the pre-2008 era.” The authors are so confident of these differences that they urge law firms to “burn the ships,” to force themselves to adopt new, more profitable ways of doing business. (p. 1)
Does “burning the ships” mean laying off lawyers and staff, as Patton Boggs did? Indeed it does. The Georgetown report warns that, despite “several rounds of lay-offs” since 2008, many firms still suffer from “overcapacity in terms of the number of lawyers available to perform the work at hand.” Indeed, “the overcapacity problem has become even more serious” over the last four years. (p. 16) The solution, for firms that want to maintain high levels of profitability, is to continue cutting both associates and partners.
In addition to trimming lawyers, law firms are learning to hire new lawyers in lower-paid and more contingent positions. As the Georgetown report recognizes: “Firms have . . . begun to move toward more flexible staffing models, expanding their use of non-partner track associates, staff attorneys, and contract lawyers. Going forward, it is likely that firms will remain conservative in their hiring policies, even as demand begins to grow. As a result, firms probably will be relatively smaller in terms of the number of partners and traditional partner-track associates and relatively larger in terms of the number of other lawyers and non-lawyer professionals.” (p. 16)
Firms have been able to pursue this course because the legal market is flooded with law school graduates eager to work on almost any terms. The Georgetown report is quite candid on this point: “While excess capacity in the [legal] market is certainly not good news for young lawyers or, for that matter, law schools, it provides an environment in which law firms should have the flexibility to redesign their staffing models to respond to client demands. By embracing alternative approaches to staffing–including increased use of staff attorneys and non-partner track associates, contract lawyers, and part-time attorneys–firms can create more efficient and cost effective ways to deliver legal services.” (p. 17)
The Patton Boggs layoffs, in other words, are likely to be the first of many further contractions in BigLaw. Other firms may not lay off lawyers; they may reduce further the number of associates they hire, or quietly shift toward hiring staff attorneys and contract lawyers rather than partner-track associates. One way or another, however, firms will remedy the “overcapacity” identified in the Georgetown report.
For those who have been waiting for the golden days of BigLaw to return, the wait is over. There will still be golden times for some lawyers in BigLaw, but the opportunities are narrowing. Four years after the recession hit the legal market, structural changes continue to reduce BigLaw prospects for lawyers of all ages.
Sequester
March 1st, 2013 / By Deborah J. Merritt
What does the sequester mean for law school graduates? Those who work for the federal government may have already received notice of upcoming furloughs. The Department of Justice, for example, has notified Assistant U.S. Attorneys that they will be furloughed for up to fourteen days. That doesn’t sound like much, but there are only 260 weekdays in a year. Fourteen days of furlough add up to a 5.4% pay cut.
Add to that the special nature of professional work. Furloughed prosecutors cannot offer to work free on their furlough days, and they must stay away from the workplace on those days. But their cases won’t go away. US Attorney’s offices, like all other offices affected by the sequester, will face an unpalatable choice: Do the attorneys maintain their current workload, working harder on the days they’re at work–for less pay? Or do they cut back on prosecutions?
The same cuts will affect our graduates who work as FBI agents, policy analysts, IRS employees, and any other type of federal government worker. As the cuts affect state budgets, particularly in states that rely upon defense spending, JDs who work for state and local governments will suffer as well.
That’s just the first chapter. With current employees furloughed and the budget future so uncertain, government agencies are likely to cut back hiring–even more than they have done already. We also have to worry about indirect effects on lawyering jobs, as furloughs and other cutbacks ripple through the economy. Fewer FBI agents, US attorneys, and government regulators means fewer investigations and prosecutions. That’s less work for the lawyers who defend the accused (from small-time drug dealers to big-time corporate fraudsters) or who advise companies on complying with government regulation.
We can hope that Congress will come to its senses quickly, once the effects of sequestration sink in. But even then, there will be sobering news for our graduates. The sequester reflects a period of profound political and cultural malaise over government spending. Opposition to that spending occurs on top of the economic forces that already threaten information-heavy professional jobs like lawyering.
Don’t get me wrong: The harshest effects of anti-government attitudes fall upon the poor. We should care passionately about how our economy and government are leaving so many people behind. But, since this blog focuses on legal education, we also need to ask what all of this means for our graduates–and for what we do as law schools. At one time, government jobs were a first choice for some law graduates and a satisfying fallback for others. Those jobs are more in doubt now than they have been for more than fifty years. How does that affect our work as law schools?
Merger
February 28th, 2013 / By Deborah J. Merritt
Rutgers University has announced a plan to merge its two law schools (Rutgers and Camden). Details remain to be worked out, but the university hopes that next year’s applicants (those applying to enroll in fall 2014) will apply to a unified school, with a choice of campuses.
The announcement raises interesting questions about how law schools can work together to meet current challenges. Few schools may be in a position to merge; those arrangements are particularly difficult when the schools reside in different universities. But are there other ways for schools to collaborate to reduce costs, improve job prospects for graduates, develop new clinical programs, or achieve other goals? Some schools are already starting to share courses by internet; what other collaborations are possible?
I welcome here comments on law school collaborations of all kinds–up to and including mergers.
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