The Legal Whiteboard

ReInventLaw Silicon Valley 2013 @ The Computer History Museum

Posted by Dan Katz, Assistant Professor of Law, Michigan State University and Co-Director, ReInvent Law Laboratory @ MSU Law.

On March 8, 2013 - The ReInventLaw Laboratory - Founded by Daniel Katz and Renee Knake from Michigan State will host ReInventLaw Silicon Valley 2013 @ The Computer History Museum in Mountain View, CA.

Topics to be covered include: 
LegalTechStartUp, Lawyer Regulation, Quantitative Legal Prediction, Legal Supply Chain, Project Management, Technology Aided Access to Justice, Design, 3D-Printing, Driverless Cars, Business of Law, Legal Education, Legal Information Engineering, New Business Models for Law, Lean Lawyering, Augmented Reality, Legal Process Outsourcing, Big Data, New Markets for Law, Virtual Law Practice, E-Discovery, Information Visualization, E-Discovery, Legal Entrepreneurship, Legal Automation … and much more.

What do I need to know?

1. At all price points, the legal services market is rapidly changing and this disruption represents peril & possibility.  This meeting is about the possibility ... about some of the game changers who are already building the future of this industry.
2. This is a 1 day event featuring 40 speakers in a high energy format with specific emphasis on technology, innovation and entrepreneurship.
3. It will highlight the new and growing portion of the legal services industry. It will not be boring.  
4. For more on our lab and related events please see: http://reinventlaw.com/ 

How Much Does it Cost?
This event is generously sponsored in part by the Ewing M. Kauffman Foundation, Michigan State University College of Law and the ReInvent Law Laboratory. 
Thus, tickets are FREE but limited.

There will only be 400 tickets for this free event.  Many of them are already taken and when they are gone, they are gone. Thus, if you or your friends/colleagues/students would be interested in attending -please sign up today. 
http://guestlistapp.com/events/129990

Final Thoughts …
As I mentioned to Bill Henderson the other day … the old internet adage applies with equal vigor in the legal services industry "the future is here … it is just not evenly distributed."  

Come join the future already in progress at #ReInventLaw Silicon Valley March 8th, 2013  (and at our other free public events in London and New York later in 2013). 

Do the Best Lawyers have Excellent "Slow" Brains?

We were born with a fast brain, but we need a slow one to advance civilization, among other things. I am talking about insights of behavioral economics being applied to lawyer decisonmaking and judgment, and I think the answer to my question is "yes".  Indeed, I think the insights of behavior econonomics put a whole new and important gloss on the tired adage, "Thinking like a lawyer."   

We cover the basics of this topic in my 1L Legal Professions class.   Apparently, it resonated with one of my many attentive students, as he/she  sent me this amazing science video.  It boils down all of Dan Kahneman's brilliant Thinking, Fast and Slow treatise into four very engaging minutes.  This is a vegetable that tastes like chocolate.  (H/T to a wise anonymous 1L at Indiana Law.)

[posted by Bill Henderson]

Washington & Lee is Biggest Legal Education Story of 2013

Here it is in a nutshell. There is empirical evidence that Washington & Lee’s experiential 3L curriculum is delivering a significantly better education to 3L students—significantly better than prior graduating classes at W&L, and significantly better than W&L’s primary competitors. Moreover, at a time when total law school applicants are on the decline, W&L’s getting more than its historical share of applicants and getting a much higher yield. When many schools are worried about revenues to survive next year and the year after, W&L is worried about creating the bandwidth needed to educate the surplus of students who enrolled in the fall of 2012, and the backlog of applicants that the school deferred to the fall of 2013.

[This is a long essay.  If you want it in PDF format, click here.]

Alas, now we know:  There is a market for high quality legal education. It consists of college graduates who don’t want to cast their lot with law schools who cannot guarantee students entree to meaningful practical training.  Some might argue that W&L is not objectively better-- that the 3L curriculum is a marketing ploy where the reality falls well short of promotional materials and that, regardless, prospective students can't judge quality. 

Well, in fact there is substantial evidence that the W&L 3L program delivers comparative value.   The evidence is based on several years' worth of data from the Law School Survey of Student Engagement (LSSSE). I received permission from Professor James Moliterno, someone who took a leadership role in building W&L’s third year program, to share some of the key results (each school controls access to its LSSSE data.) They are below.

But before getting into empirical evidence, I want to put squarely on the table the most sobering finding that likely applies to virtually all of legal education. It is this: On several key LSSSE metrics, W&L has made impressive gains vis-à-vis its own historical benchmarks and its primary rival schools. But even for this leader, there remains enormous room for improvement. More on that below.

Here is the bottom line:  Traditional legal education, when it is measured, does not fare very well. Yet, as W&L shows, substantial improvement is clearly possible. We law professors can respond to this information in one of two ways:

1. Don’t measure, as it may disconfirm our belief that we are delivering a great education.
2. Measure—even when it hurts—and improve. 

I am in the second camp. Indeed, I don’t know if improvement is possible without measurement.  Are we judging art work or the acquisition of key professional skills needed for the benefit of clients and the advancement of the public good? 

Moving the Market

I doubt I will ever forget Jim Moliterno’s September 2012 presentation at the Educating Tomorrow’s Lawyers (ETL) conference at the University of Denver. He presented a single graph (chart below) showing W&L actual applicant volumes since 2008 versus what would have happened at W&L if its applicant volume had followed national trends.

While law school applicants crested a few years ago, W&L enjoyed a large run-up in volume of applicants, presumably due to the launching of their new 3L program.  This larger applicant pool effectively served as a buffer when applicant declines began in 2011 and 2012.  Since 2008, overall law school applicants are down -19%, yet W&L is up overall +33%.   

But much more significantly, after their experiential 3L year was up and running and the overall legal job market continued to stagnate, W&L yields spiked. Ordinarily they would enroll 135 students. But for the fall of 2012, they received enrollment commitments from well over 260 students. Indeed, at the ETL conference Jim Moliterno said the school had to offer financially attractive deferments to get the class to approximately 185 incoming students -- a 50 student bulge.

When Jim Moliterno showed the above graph and explained the corresponding changes in yield, my good friend Gillian Hadfield, a skeptical, toughminded, evidence-demanding economist who teaches at USC Law, leaned over and said to me, “that is the single most important takeaway from this entire conference.” I agreed.  The market for a legal education with practical training is, apparently, much more inelastic than the market for traditional JD programs.

Yet, what is perhaps most remarkable is that a large proportion of incoming students at W&L were enrolling based on little more than faith.  Nobody knew for sure if W&L  had the ability to pull off their ambitious 3L curriculum. The program relies on a large cadre of adjunct professors, after all, and W&L is located in remote Lexington, Virginia.  Many law faculty outside of W&L, and perhaps some inside, thought (or perhaps think) that the program could not live up to the hype.  Well, as shown below, the program appears to have produced meaningful gains.

The only data-driven critique anyone can muster is that the gains remain significantly short of perfection. But that critique bites harder on the rest of us.  To use a simple metaphor, W&L is tooling around in a Model-T while the rest of us rely on horse and buggy. What ought to be plain to all of us, however, is that, just like automobile industry circa 1910, we are entering a period of staggering transformation that will last decades. And transformation will be roughly equal parts creation and destruction. See Schumpeter.

W&L Data, Internal Historical Benchmark

LSSSE is a phenomenally rich dataset – nearly 100 questions per year on a wide variety of topics related to student classroom experience, faculty interaction, type and quantity of assessments, time allocation, and perceived gains on a variety of dimensions related to personal and professional development. The survey instrument is online here.  

Aside from a host of questions related to demographics, career goals, and debt, major sections in the LSSSE include:

• Section 1, Intellectual Experience (20 questions)
• Section 2, Examinations (1 question)
• Section 3, Mental Activities (5 questions)
• Section 4, Writing (3 questions)
• Section 5, Enriching Educational Experiences (9 questions)
• Section 6, Student Satisfaction (7 questions)
• Section 7, Time Usage (11 questions)
• Section 8, Law School Environment (10 questions)
• Section 9, Quality of Relationships (3 questions)
• Section 10, Educational and Personal Growth (16 questions)

W&L deserves to be a detailed case study. But frankly, legal education can’t wait. So I will do the best I can to cover the landscape in a blog post. I hope every law faculty member who reads this post makes a strong plea to their dean to enroll in LSSSE. Why? So your school can benchmark itself against the detailed LSSSE case studies that are bound to flow out of W&L and other innovative law schools.  Though they don’t get much press, there are, in fact, other innovative law schools.

The dataset I have for W&L covers 2004, 2008, and 2012.  This is the same data that Jim Moliterno briefly shared at the ETL conference.  I have put them into bar charts so that readers can see the scores on several questions at once.  Two important interpretative notes:

1. LSSSE is especially useful when an entire class (1L, 2L, or 3L cohort) experiences a curricular change.  This happened with Indiana Law's 1L Legal Professions class.  It is also happening here, as all W&L 3L students had the benefit of the experiential 3L curriculum.  Assuming nothing else signficant has changed (a safe assumption when it comes to legal education), the classwide change enables a simple "event study" analysis.
2. W&L LSSSE scores for 2004 and 2008 are much more alike than they are different. The big differences appear between 2008 and 2012. So that is what I discuss below.

Section 1 differences are displayed below (3L students only).  Click on the chart to enlarge.

 
The big takeaway here is that W&L gained in 17 out of 20 categories.  Because Section 1 is put on a 4 point scale, just like a traditional academic grading system, we can analyze the data using something akin to a LSSSE Section GPA .  W&L's Section 1 GPA for 2008 was 2.52, which is essentially on the C+/B- cut point.  Only one factor -- communicated with faculty via email--was meaningfully above a 3.0. 

We can contrast that with a 2.85 GPA for 2012, which is in the B-/B territory.  W&L's overall average increased by .33 points, and six measure are above 3.0.  It experienced the biggest gains on the following:

• +.77, Put together ideas or concepts from different courses when completing assignments or during class discussions.
• +.75, Participated in a clinical or pro bono project as part of a course or for academic credit.
• +.53, Put together ideas or concepts from different courses when completing assignments or during class discussions.
• +.51, Worked with classmates outside of class to prepare class assignments.
• +.49, Prepared two or more drafts of a paper or assignment before turning it in.
• +.47, Discussed assignments with a faculty member.
• +.44, Used email to communicate with a faculty member (now a 3.65).
•  +.43, Talked about career plans or job search activities with a faculty member or advisor
• +.41, Worked with other students on project during class

There is still enormous room for improvement, but W&L's 3L experiential program appears to have really moved the needle on factors related to the Section 1 Intellectual Experiences factors.

 W&L fares even better on Section 3, which covers the mental activities that ostensibly comprise "thinking like a lawyer." [Click on chart to enlarge]

As shown above, W&L 3Ls drop in only one category -- rote memorization for repeating on an exam.  Surely, that pleases the W&L faculty.  These are 3Ls after all.   The overall Section 3 GPA, which excludes 3a, moves from 3.07 (B) to 3.41 (B+).  Question 3c to 3e are true higher order lawyering skills. W&L ought to wheel out these data the next time some bar association claims that legal education is not accomplishing anything.  At some places, maybe.  But good things appear to be happening at W&L.

Washington & Lee shows similar gains in the other key LSSSE sections.  If you are curious, you'll have to wait for the detailed W&L case study, which I hope will get written someday by someone at W&L.  What is no doubt of greater interest to the broader legal education community, however, is how well W&L is doing against other law schools--i.e., like us.

W&L Data, External Peer Benchmarks

 LSSSE data are the property of law school who pay for the survey.  The survey is designed to improve the education programming rather than create an industrywide ranking.  Roughly 50% of law schools participate each year.  Since its inception in 2003, 179 law schools have participate for at least one year.

Although the data are reported at the individual school-level, comparative benchmarks are a key part of the LSSSE value proposition.  Comparative benchmarks include size, public/private, the total LSSSE sample, and a peer group specified by the school.  For example, at Indiana, we might want to look at other Big 10 public law schools.  We don't get to see our rivals' scores, individually, but we can get a group average for five or more schools we select that are also participating in that specific year.

I am told that schools typically pick their peer groups based on similar rank, geography, and applicant pool, etc. I thought W&L's peer comparison would be the most relevant to show here.

Below are the 11 (out of 20) factors in LSSSE Section 1 in which W&L is higher than its peer benchmark at statistically significant levels.  Again, only 3Ls in the sample I am using here. [Click on to enlarge]

On these 11 benchmarks, W&L posts a "GPA" of 3.02 (B) versus 2.45 for the peers (C+).  Again, W&L has plenty of room to grow, but relatively speaking, it is dramatically outperforming its competition.

What about those critical Section 3 Mental Activities that comprise "thinking like a lawyer"?  Again, W&L is outdistancing the competition.  [Click to enlarge]

The Section 3 GPA, excluding 3a memorization, is 3.41 for W&L (B+) versus 3.12 for its peers (B).

Section 4 pertains to writing.  Ask any professional development coordinator in a law firm about the biggest weakenesses of incoming associates, and you'll get a near unanimous reply: "writing."  Well, the best way to become a better legal writer is to write.  How did to W&L 3Ls do on that front?  3L students at W&L write a ton. [See chart below, click on to enlarge.]
W&L 3Ls write roughly the same number of 20-page papers as those at peer schools, but in the 1-4 and 5-19 page category, W&L 3Ls surge ahead of the competition at statistically signficant levels. In the above chart, the 3.27 score for papers in the 5-19 page range corresponds to 6-7 medium length papers during the 3L year.  Peers, in contrast, are roughly at 3 medium length papers. The 3.68 score in the 1-4 page category also equals roughly 7 short papers during the 3L year; peers write roughly half that number, roughly 3-4 short numbers.

Section 7 covers time usage.  Not surprisingly, W&L 3Ls spend more time prepping for classes beyond just reading assigned text -- roughly 7 hours more per week. [See chart below, click on to enlarge.]

Imagine if you did anything seven hours more per week for two full semesters -- you'd get better at it.  Time on task really matters to professional development.

Section 9 focuses on the quality of relationships within the school.  In terms of 3L student relationships with faculty and administration, they are quite high -- indeed, higher at statistically significant levels than W&Ls peer schools. [See chart below, click on to enlarge.]

Finally, Section 10 asks a series of questions related to how well the law school experience has contributed to the student's knowledge, skill and personal development.  [See chart below, click on to enlarge.]

On 10 of 15 questions, W&L is posting higher scores than its competition -- all at statistically significant level.  But as I noted above, there remains room for improvement.  W&L Section 10 "GPA" is 2.99 (B).  Its competitor's GPA is 2.7 (B-).

Conclusion

There are three takeaways from this blog posts:

1. A sizeable number of prospective students really do care about practical skills training and are voting with their feet.  W&L has therefore become a big winner in the race for applicants. 
2. W&L's 3L experiential curriculum is substantial improvement over the curriculum W&L offered in 2004 and 2008; moreover, there is room for even more improvement.
3. There is substantial evidence that W&L, with some modest focused energy on the curriculum, is now offering a better educational experience than its peer schools -- albeit, the current grade is a "B" at best for W&L and likely lower for the rest of us.  We all, therefore, have a lot of work to do.

The example of the Washington & Lee 3L experiential year ought to be a watershed for legal education. We can no longer afford to ignore data.  Through LSSSE, high quality comparative data are cheap and comprehensive.  And that information, as we have seen, can significantly improve the value of a legal education.

[Posted by Bill Henderson]

How to Increase Your Law School's Academic Reputation

Law schools care deeply about their academic reputation.  If this were not true, my Indiana Law mailbox would not be stuffed full with glossy brochures sharing the news of faculty publications, impressive new hires, areas of concentration, and sundry distinguished speaker series, etc. 

Because of the timing of these mailings – I got nearly 100 in Sept and October—I am guessing that the senders hoped to influence the annual U.S. News & World Report Academic Reputation survey.  Cf. Michael Sauder & Wendy Espeland, Fear of Falling: The Effects of U.S. News & World Report Rankings on U.S. Law Schools 1 (Oct 2007) (reporting "increases in marketing expenditures aimed toward raising reputation scores in the USN survey"). But does it work?  A recent study by Larry Cunningham (St. Johns Law) suggests that the effect is, at best, decimal dust.  

Glossy brochures may not reliably affect Academic Reputation, but I have uncovered four factors that are associated with statistically significant increases and decreases of USN Academic Reputation.  To illustrate, consider the scatterplot below, which plots the 1993 ordinal rank of USN Academic Reputation against the 2012 ordinal rank [click on to enlarge].

Four sets of dot (Red, Blue, Orange, and Green), each representing distinctive shared features of law schools, tend to be above or below the regression line.  These patterns suggest that changes in USN Academic Reputation over time are probably not the result of random chance. But we will get to the significance of the Red, Blue, Orange, and Green dots soon enough.  

The primary takeaway from the above scatterplot is that 2012 USN Academic Reputation is overwhelmingly a function of 1993 USN Academic Reputation.   Over 88% of the variation is explained by a school's starting point 20 years earlier.  Part of this lock-in effect may be lateral mobility.  That is, there are perks at higher ranked schools: they tend to pay more; the teaching loads are lighter; and the prestige is greater, etc. So school-level reputations rarely change, just the work addresses of the most productive scholars.  This is, perhaps, the most charitable way to explain the enormous stickiness of USN Academic Reputation.

That said, the scatterplot does not show a perfect correlation; slightly less than 12% of the variation is still in play to be explained by influences other than starting position.  A small handful of schools have made progress over these 20 years (these are the schools above the regression line), and a handful have fallen backwards (those below the line).

The Red circles, Blue rectangles, Orange diamonds, and Green circles represent four law school-level attributes.  The Reds have been big gainers in reputation, and so have the Blues. In contrast, the Oranges have all experienced big declines; and as as a group, so have the Greens.  When the attributes of the Red, Blue, Orange, and Green Schools are factored into the regression, all four are statistically signficant (Red, p =.000; Blue, p = .001; Orange, p = .012; Green, p = .000) and the explained variation increases 4% to 92.3%.  As far as linear models goes, this is quite an impressive result. 

Before you look below the fold for answers, any guesses on what is driving the Red and Blue successes and Orange and Green setbacks?

Changed the Law School Name (average gain: +39.0)

Red circles are the five law schools that, over the last 20 years, have changed university affiliations and thereby changed their names.  These include:

• Michigan State University.  In 2004, the Detroit College of Law became Michigan State University College of Law.  DCL was ranked 155 in Academic Reputation in 1993;  in 2012, MSU Law was ranked 96, reflecting a 59 point jump, which is the largest in the dataset.

• Quinnipiac Law.  In the mid-1990s, the University of Bridgeport Law School became Quinnipiac University School of Law.  This switch in university affiliations came about as the result of law faculty and students wanting to distance themselves from the financial support given to Bridgeport from the Reverend Sun Myung Moon.  Since 1993, Quinnipiac's academic reputation has climbed from 166 to 123 (+43 spots).

• Seattle University.  In 1994, the University of Puget Sound transferred the sponsorship of its law school to Seattle University, leading to the renaming and relocation of the law school.  The reincarnated law school has fared well in USN Academic Reputation, increasing from 113 to 71 (+42).

• University of New Hampshire.  In the spring of 2010, Franklin Pierce Law Center signed an affiliation agreement with the University of New Hampshire, the state's flagship public university, and in turn changed its name.  UNH Law has fared well in the USN Academic Reputation survey, climbing from 151 to 123 (+28).

• Penn State Law.  In 2000, the independent Dickinson School of Law, one of the oldest law schools in the nation, merged with Big 10 powerhouse Penn State University.  The merger has been good for USN Academic Reputation, which has increased from 107 in 1993 to 84 in 2012 (+23).

So, USN Academic Reputation is likely influenced by the halo of a stronger university brand.  But this strategy is only open to a handful of independent law schools and those affiliated with a weak, financially struggling central universities.  So it is not generalizable as a strategy for increasing Academic Reputation.  Sorry to get your hopes up.

Well, what about the Blue retangles?

Conservatives Welcome (average gain: +28.3)

This one is a little counterintuitive.  I identifed three research-oriented law schools where, compared to the rest of the legal academy, conservatives have fared well during faculty hiring: George Mason, San Diego, and Pepperdine. Why these three? (If there are other law schools that have tried to build a strong conservative faculty brand, they have escaped my attention.)

1. George Mason's Law & Economics emphasis.
2. San Diego Law is a conservative Catholic law school that hosts The Right Coast blog.
3. Pepperdine Law is a Christian-centered law school that hired Kenneth Starr to serve as dean as dean after he rapped up this tenure as Independent Counsel of the Clinton Whitewater investigation.

As show in the scatterplot above, all three law schools have fared very well in Academic Reputation:  GMU (#76 to #51, +25), San Diego (#69 to #51, +18), and Pepperdine (#107 to #65, +42). 

But wait, fellow academics vote in the USN Academic Reputation survey, and supposedly we are an overwhelmingly liberal.  So why did these three conservative school fare so well?  This could be combination of three factors:

• Discounts on productive scholars.  Because GMU and San Diego are not put off by conservative credentials, they have gotten highly productive scholars at a discount.  Among law schools on SSRN, GMU Law ranks #18 in all-time downloads and San Diego ranks #21 -- both are significantly higher than these schools' USN Academic Reputation and overall USN rank. But this does not explain Pepperdine, which ranks #117.

• USN "echo chamber" effect.  My colleague, Jeff Stake, has documented that a school's USN Academic Reputation is influenced by changes in its overall USN ranking.  So, if a school manages to increase its overall rank, USN Academic Reputation then rises.  See Stake, The Interplay between Law School Rankings, Reputations, and Resource Allocation, 81 Ind. L. J. 229 (2006).  A strong conservative brand probably helps a law school attract more than its share of highly credentialed conservative students.  Until 2001, GMU Law was perennially a T2 law school; but in 2012, it was ranked #39.  Likewise, until 2004, Pepperdine was perennially a T3/T4 (note their used to be five USN tiers); but in 2012, it was ranked #49.  In contrast, USD Law (ranked #69 in the USN Overall in 2012) has increased its Academic Reputation significantly but moved sideways in the rankings (query: did USD understand the optimal tradeoffs between LSAT and UGPA?)

• USN Voters.  The Survey voters are supposedly deans, associates deans, and newly tenured faculty.  It is at least conceivable that administrators are, as a group, less liberal than their faculty.  After all, they have to balance the law school budget each year.  Similarly, law school administrators, who are accountable to central universities, and younger faculty, who just cleared the tenure gauntlet, are probably quite in tune with law schools comprised of highly productive scholars.  And San Diego and GMU Law excel on that metric.  This might be a non-factor.  It is hard to tell.

If moving on USN Academic Reputation is really important to a faculty, the lesson here is, "make a hard, high-profile right turn, and wait a decade."  That said, there are probably not enough spoils to go around for more than a handful of conservative law schools to use this strategy.

Name changes and conversativism are the factors associated with an increases in USN Academic Reputation.  What are negative factors?

Scandals and negative NY Times coverage (average drop: -24.3)

The three orange triangles are three schools that gained unprecedented notoriety based on either a rankings scandal or extensive negative treatment in the New York Times.

• Scandals.  Illinois and Villanova both voluntarily disclosed that they submitted false admissions credentials to both the ABA and U.S. News.  And both have taken a huge hit:  within the incredibly stickly Tier 1, Illinois's Academic Reputation rank was #22 in 1993, #22 in 2011, and then #39 in 2012 (-17); similarly, Villanova's went from #69 in 1993, to #62 in 2011, to #106 in 2012 (-37).  Quite a severe pummeling by USN voters!

• New York Times coverage.  In his year long focus on law schools, David Segal of the New York Times signaled out New York Law School as a particularly egregious example of the excesses of law school.  See Segal, Law School Economics: Ka-Ching!, N.Y. Times, July 16, 2011.  If you were teaching in legal education in 2011, you read that article.  New York Law School's Academic Reputation went from #95 in 1993, to #94 in 2011, to #114 in 2012 (-19).  Ironically, New York Law School was embarking on real innovation in the years prior to the story, but negative press in the NY Times, regardless of accuracy or fairness, is a bell that can't be unrung.

The last factor is perhaps the most troubling. 

Schools in the Rust Belt (average drop: -13.0)

There are 31 schools in the so-called Rust Belt, which I define as western PA and NY, Ohio, Michigan, Indiana, Illinois and Wisconsin. These 31 law schools experienced an average USN Academic Reputation decline of 13 spots.  And note, this includes the MSU Law +59 miracle jump and several elite law schools such as Northwestern (-2), Chicago (-3), and Michigan (-3) that are in the highly sticky T14 range.  So, to get a -13 average, we need some really big negative numbers from many law schools.  

Here, I will not name names.  Instead, let me share the ten biggest drops by Rust Belt schools: -17, -20, -27, -30, -34, -34, -42, -43, -46, -49.  Eight of the ten biggest 20-year drops were Rust Belt schools (and one of the remaining two was Villanova, which earned its spot through scandal).

Why is this happening?  Well, the economic center of gravity of the US economy has been moving to the south and west for several decades now.  Although this affects the Northeast just like it does the Midwest, the Northeast has become an agglomeration of "advanced producer services", which includes bankers, consultants, accountants, and lawyers.  See Henderson & Alderson, The Changing Economic Geography of Law U.S. Law Firms (2008) (documenting a large increase in corporate law lawyers in the Northeastern Mid-Atlantic region and the relative hollowing out of corporate lawyers in the Rust Belt, with the exception of Chicago). 

The implication is that regional law schools in the Rust Belt are more likely to be serving a stagnant regional economy.  This is not particularly attractive to prospective law students.  See Henderson & Morriss, Student Quality as Measures by LSAT Scores: Migration Patterns in the U.S. News Rankings Era, 81 Ind. L. J. 163 (2006) (documenting that students will trade down in USN ranking to attend a school in large and growing corporate legal market).  So this is likely the "echo chamber" effect playing itself out in conformity with larger systemic trends affecting the legal market.  See Stake, supra.

Some might argue that the declines are the result of academic snobbery against the flyover states.  If so, this prejudice must have arisen with avengence during the last 20 years.  Or, less plausibly, some might argue that these schools have had a harder time recruiting or retaining sufficiently talented, productive faculty.  Remember, this is the same survey that boosted Detroit College of Law a record +59 jump when it made the 90-mile move to East Lansing ... which is very much in the Rust Belt.  That +59 point jump probably had a lot more to do with a Big Ten brand than the production of high quality faculty scholarship.  

After we consider starting position, the Jeff Stake "echo chamber" effect, scandals, name changes, conservative branding, and basic measure error inherent in any survey work, how much unexplained variation can we really assign to the true changes in the academic quality of law schools?  To my mind, virtually nothing.   

Below is a scatterplot that places Predicted 2012 Academic Reputation (based on starting position, name changes, conservativism, scandals, and Rust Belt status) against Actual 2012 Academic Reputation. [click on to enlarge.]  

The top three outperformers in the new model are Alabama, Georgia State and Stetson.  Was their secret sauce a better faculty, or the echo chamber aided by sunny weather, a growing southern economy, and/or cheap in-state tuition in an era of rising costs?  Regardless, congrats!

Conclusion

Here is a very big puzzle.  Law faculty are comprised of very smart people, yet we organize virtually all of our hiring, strategic plans, and marketing efforts in an effort to make gains in a reputational game that cannot be won.  Why?  That is a very big topic and, alas, the basis for a future post.

[posted by Bill Henderson]

The Eds and Meds Sector

There is a fascinating story at newgeography which looks at trends in the education ("Eds") and medical ("Meds") sectors. 

Newgeography focuses on trends in urban affairs and economic geography.  Eds and Meds are of interest to this group because these two sectors have been such a critical part of maintaining or restoring many regions' economic vitality.  Why?  Universities and hospitals generally pay high wages, don't lay people off, and are perceived as long term drivers of growth because more degrees and longer life spans are two trends that will probably continue. 

But the author, Aaron Renn, presents compelling trend data suggesting that America can no longer to afford extra large helpings of Eds and Meds.  As shown in the chart below, these sectors have been growing faster than virtually all other sectors for a long, long time.

Renn points out the healthcare is on its way to consuming 20% of our GDP by the year 2021.  And the growth in the higher education sector has been substantially fueled by student loans.  Unfortunately, even college grads are subject to the pressures of outsourcing and competition with very able professionals from around the globe.  So the ability to repay all that debt can't be taken for granted.  What can't go on forever, won't.

Here is another chart presented by Renn, this one presenting the rates of inflation occuring in Eds and Meds sectors as compared to the overall CPI:

There is an opportunity here.  I would be extremely bullish on innovations that produce productivity gains in the Eds and Meds sectors.  I recently listened to this HBR Ideocast discussion with Robert Kaplan, the Harvard Business School professor best know for developing the Balanced Scorecard.  Kaplan is now turning his considerable intellect toward the problem of cost-containment in healthcare. 

What the key insight?  Measuring how much patient treatment actually costs--to date, there has been almost no sophisticated cost accounting in healthcare.  Most of the brainpower has gone to dealing with (and maximizing) third party reimbursements.  Under Kaplan's system, fortunately, we can actually identify the points in the system that cost way too much and thus begin the reengineering process.

The same thing may soon be happening in higher ed.  Another Harvard Business School professor, Clayton Christiansen, who authored the renowed business book, The Innovator's Dilemma, recently co-authored a letter that called for colleges and universities to quit chasing prestige and start focusing on innovations that improve educational quality without increasing price.  Remarkably, the letter was included in a mass mailing by the American Council of Trustees and Alumni -- going to 13,000 trustees!  See Inside Higher Ed, Distruption's Strange Bedfellow, July 12, 2102.  Another Insider Higher Ed story suggests that this may be the true faultline driving the University of Virginia controversy.  See Disruptive Innovation: Rhetoric or Reality?, June 26, 2012.

The world appears to be changing, even in Eds and Meds sector.

[posted by Bill Henderson]

Encouraging Data on Law Firm Diversity

Here is some welcomed good news for the legal industry--we now have data showing diverse lawyers, within certain large and important legal markets, ascending to law firm partnership in significant numbers.  Let me be clear.  I am reporting progress here, not perfection.  But the progress provides key insights on how to further reduce the partnership diversity gap.

The research, which I just published in the NALP Bulletin (see "Diversity by the Numbers," July 2012), is based on the 2005-06 edition of the NALP Directory of Legal Employers. The NALP Directory is a city-by-city guide for several hundred law firms that  participate in the on-campus interview (OCI) process.  This information includes a breakdown of lawyers by firm, branch office, title, and race/gender/GLBT status.  (See full article for overview data.)

The aggregate-level statistics are not every encouraging--less than 5% of partners at these corporate firms are minority.  These are the type of bleak statistics that frame the diversity discussion.  Yet, when the data are disaggregated, we see racial subgroup making substantial partnership inroads in specific geographic markets.  For African-Americans, it is Atlanta and Washington, DC; for Asians, it is L.A., San Francisco, and Pacific Northwest/Rocky Mountain region; for Hispanics, it is Houston, Dallas, Miami and L.A.  Further, these partnerships disproportionately in AmLaw 200 firms.

The map and table below expresses these geographic variations using a location quotient methodology.

(Note: CSA means "Consolidated Statistical Area", a geographic area defined by the U.S. Census Bureau.  Among other things, CSAs are very large metropolitan area labor markets.)

In the map above, the emphasis on large metropolitan areas is deliberate.  Among the 600+ law firm in the 2005-06 Directory, 64.2% of their attorneys worked in the top 10 metropolitan markets; these same markets also accounted for 74.8% of hiring at the NALP firms.

A Location Quotient (LQ) is a tool for identifying relative surpluses or shortages of an economic activity within specific locations.  If, for example, the percentage of female partners in New York City is the same as the entire US market, the location quotient for female partners would be 1.00.  In fact, the LQ for female partners in New York City is .87.  This means that are 13% fewer female parters in New York City relative to the total base of New York City partners.  Likewise, the LQ for African American partners in Atlanta is 2.67.  This means that there are 167% more African American partners in Atlanta relative to the total Atlanta partnership base. Cells in Yellow are underrepresented by more than 10%; cells in blue are overrepresented by more than 10%.

The implication of this analysis is that significant diversity tends to exist in pockets that follow distinctive demographic patterns.  These significant pockets rebut the pessimistic view, held by some, that minority partners lack the skills and ability to be successful in large corporate law firms.  Quite the opposite is true -- minority lawyers' willingness to enter a market and persist at a firm is likely influenced by number of people from the same minority group who have ascended to the partner level.  If you are a African American lawyer, the wind is at your back in DC or Altanta, but in many branch offices in Dallas, Phoenix or Boston you will be breaking barriers.

This brings up the issue of pipeline, which is a precursor to any hoped for progress on partner diversity. 

To look at pipeline-to-partner issues, I created separate regression models to predict the % minority associates within a law office (not the firm as whole).  I ran the model separate for African American, Asians, Hispanics, GLBT and females. Each factor below makes an independent contribution to a larger pipeline of diverse associates.

• Geography matters.  Diverse associates are disproportionally going to the same market where their same subgroup has been successful becoming partner.  African Americans to Atlanta and DC; Asians to the west coast; Hispanics to the major markets in the Southeast and Southwest.
• Large Firms.  Large firms are more successful recruiting diverse associates. This could be salary, prestige, recruitng resources.
• Large Offices.  Bigger branch offices are more successful.  This could be recruiting resources or a more appealing variety of practice areas.
• % of Diverse Partners.  This is the critical factor -- for every category, % of partners is associates with higher % of associates.  This is independent of size and geography!  Further, there is zero crossover effect. 

Quoting from the full article, "The takeaway from the above analysis is both simple and frustrating.  We would have more African American (or Hispanic or Asian or Female or GLBT) associates if only we had more African-American (or Hispanic or Asian or Female or GLBT) partners.  But getting more diverse partners will be slow going until we become better at retaining, rather than just recruiting, diverse associates.  The first generation of diverse lawyers will, by definition, not have the benefit of diverse mentors.  And in many firms, or at least branch offices, the first generation has not yet arrived."

I am really grateful to NALP for giving me access to this unique dataset.  It caused me to think much more deeply on how lawyer development can be used to create greater diversity in the huge number of branch offices where there is no critical mass of diverse partners.  It short, it is all about creating a competency model and evaluation system--i.e., a roadmap--that makes the path to partnership more explicit.  Why am I bullish on our ability to make progress on partnership diversity?  Because these systems simultaneously advance profitability and diversity.  The article recounts one such example.

[posted by Bill Henderson]

Which law schools lose the most when applicants decline?

This is a simple question of great practical importance to many law schools, yet very few law school administrators understand how to answer it.  Who would have thought that clarity would be supplied free-of-charge by an underemployed recent law school graduate? 

But that is what is happening now, in "Tough Choices Ahead for Some High-Ranked Law Schools," an Am Law Daily essay written by Matt Leichter, one of the silver linings of the declining legal job market -- and there aren't too many.  Matt is a J.D.-M.A. in law and international affairs from Marquette University who passed the New York bar in 2008, finished his masters work in 2009, and then moved to the Big Apple as the bottom was falling out of the entry level market.  Unable to find conventional legal employment, Matt started doing freelance writing on law-related topics. 

With plenty of time on his hands, Matt turned his graduate-level quantitative skills to the task of analyzing a law school education market that seemed unsustainable.  Matt first put his analyses on display at the Law School Tuition Bubble.  His writings eventually attracted the attention of The American Lawyer, which has now published several of his data-driven essays.

Here is what sets Matt apart. 

• He digs very deep for facts and, in turn, uses one of his biggest asset --time -- to build datasets that answer important and relevant questions
• He is non-ideological.  Just facts and factual analysis.
• He writes about complex technical stuff in an accessible, credible way

Matt has all the core skills of a truly great lawyer.  Finding no takers, the entire legal education establishment benefits by Matt channeling his time, energy, and considerable intellect into relevant topics crying out for dispassionate analysis.

His "Tough Choices" essay is a real gem.  Here is the bottomline:  This year's applicant cycle likely will deliver its greatest blow to US News Tier 1 schools who generally admit students who were angling to get into even higher ranked schools.  This inference can be teased out of the ratio of applicants to offers (selectivity), and offers to matriculants (yield).  

To conduct this analysis, Matt had to cull data, school-by-school, from several years of the ABA-LSAC Official Guide to Law Schools (aka "the Phonebook"). But it enables him to produce the chart below:

What this chart says is that admissions officers have to read more applications and make more offers to fill their entering classes.  Based on the data in Matt's chart, in 2004, for all ABA-accredited law schools, there was a 24% acceptance rate, and a 31% yield from those offers.  In 2010, the acceptance rate went up to 31% (schools were being less selective) and the yield went down to 25% (fewer showed up to enroll). 

Applicant volume may be declining, but the trends above suggest that there is a lot more "competitive shopping" going on. Why? Because information costs are going down and prospective students are adapting.  And this year is bound to be the most aggressive year ever.  According to this NLJ story, It's a Buyers' Market for Law School, virtually every student is now negotiating for scholarship money.

Declining applicant volume, shifting yields, and highly informed consumers make it very difficult for law school administrators to lock in their LSAT and UGPA numbers, which schools generally fixate on because of U.S. News ranking.  This produces pain in one of three ways:

1. The school shrinks the entering class (announced by at least 10 schools), which severely tightens the budget
2. The school buys its class through financial aid, which blows a hole in the budget (happening here)
3. The school significantly relaxes the LSAT and UGPA and braces for a drop in the rankings because its peers are pursuing strategies #1 or #2.

#1 and #2 may seem like the prudent course, but a central university won't (more likely can't) provide a financial backstop for more than a year or two, if that.  If the admissions environment does not change dramatically, which seems unlikely, some combination of layoffs, rankings drop, or closures will have to be put on the table.

Matt's ingenuity is on full display when he demonstrates, with data, the profile of the most vulnerable schools -- and its a far cry from the bottom portion of the U.S. News rankings. 

• Low accept/high yield (think Yale and Stanford) are safe. 
• High accept/high yield are also fine.  They are nonprestigious but have strong regional niches or missions. Tier 3 or 4 designation means nothing.
• Low accept/low yield crowd -- a bunch of Tier 1 schools -- are vulnerable to significant rankings volatility.  If they drop, next year's applicant volume will be affected, making it very difficult to rebound.
• High accept/low yield are the most likely to close.

Until August and September, when the wait lists finally clear, nobody really know the depth of market shift.  Only then can the budget holes be finalized.  Deans will then have candid conversations with their central administrations to answer the question, "Is this downward trend permanent?"

[posted by Bill Henderson]

Is a Great Lawyer Born or Made?

[By Bill Henderson, originally published in The National Jurist, January 2012 (PDF)]

Many law students spend their 1L year fearing that they might be the admissions mistake.  I was one of them.  The only feedback is what can be gleaned from the professor-student dialogue.  In turn, everyone uses this information (if you can call it that) to handicap their likelihood of making law review or otherwise getting the grades needed to get the most coveted jobs.  The whole process seems very binary:  Am I smart enough to be a successful lawyer, yes or no?

When I became a law professor, my research on law firms and legal education eventually brought me to the topic of lawyer success.  I started collecting examples of lawyers with sterling credentials who failed to develop a significant practice; and those with less impressive pedigree who ended up becoming go-to experts and indispensible lynchpins of their organizations.  What explained these divergent outcomes?

The research of Carolyn Dweck, a cognitive psychologist at Stanford University, provides some important insights to this question.  Before delving into these insights, however, ask yourself whether the following statement is true:  “A lawyer’s skill set is determined primarily by innate ability—you either have enough or you don’t.”

Dweck’s research focuses on self theories.  If you agreed with the above statement, your self-theory reflects a fixed mindset.  You tend to believe your destiny (and others) has been substantially fixed by your genetic endowment.  In contrast, if you disagreed with the statement, your self-theory reflects a growth mindset.  You believe you can substantially change your abilities and intelligence through focused effort and learning.  See Carol S. Dweck, Mindset: The New Psychology of Success (2006).

Self theories are important because they affect our choices and behavior.  According to Dweck’s research, people with a fixed mindset tend to prefer activities that validate their own abilities.  Similarly, they shy away from tasks that may provide the world with evidence that they lack innate talent.  In contrast, people with a growth mindset believe they can acquire important skills, knowledge and abilities through effort.  So floundering at a task is not failure—its learning.  As a result, the two mindsets evaluate opportunities very differently and thus tend to accumulate different life experiences.

Dweck has conducted several fascinating experiments regarding the differences between fixed and growth mindset people.  For example, in psychology, it is long been known that people tend to overestimate their own abilities.  In a sample of college students, Dweck and her colleagues collected self assessments of ability and compared them with objective measures of performance.  Remarkably, growth mindset people had a near perfect correlation between self-perceptions of ability and their own performance.  In contrast, fix mindset people accounted for virtually all of the exaggerated self perception.

Dweck explains, “when you think about it, this makes sense.  If, like those with the growth mindset, you believe you can develop yourself, then you’re open to accurate information about your current abilities, even if it’s unflattering.  What’s more, if you’re oriented toward learning … you need accurate information about your abilities in order to learn effectively.  However, if everything is either good news or bad news about your previous traits—as it is with fixed-mindset people---distortion always inevitably enters the picture.”

In another experiment, people with both mindsets visited the brain waves laboratory at Columbia University.  They were then asked a series of hard questions and given feedback on their answers.  According to the subjects’ brain wave activity, people with a fixed mindset tended to pay close attention only to the portion of the feedback that told them whether they got the answer right or not.  When presented with information that could help them learn, there was no sign of interest.  In contrast, “people with a growth mindset paid close attention to information that could stretch their knowledge. Only for them was learning a priority.”

Imagine this attitude playing itself out over a period of decades.  How in the world can we accomplish anything important when we shut our minds to new information?

There is a persistent narrative in American culture that attributes great success to innate ability.  Yet, on close examination, it does not align very well with the underlying facts.  As Dweck note, the contributions of the world’s most iconic geniuses -- Edison, Darwin, Mozart, etc – were not flashes of brilliance.  Rather, they were the product of years of focused labor and learning, often in relative obscurity.  These are the habits of the growth mindset.

When I first read Dweck’s research, my mind went back to that first year of law school and my persistent worry about whether I had enough innate ability to be successful.  Legal education makes a great case study for Dweck’s ideas because the student population is filled with people who have done very well on standardized tests and other academic pursuits.  Because of the years of praise and reinforcement for being smart, gifted, advanced, etc., we are the most at risk to believe that we won the genetic lottery.  So rather than provide our classmates with disconfirming evidence of our abilities—at least relative to them—we keep our heads down, take notes, and hope we don’t get called on.  We hope that the end of semester grades will validate our ability.  But what about learning?

Since law school, I have always been amazed by the propensity of lawyers and law professors to over-generalize from academic performance.  There are so many facets to effective lawyering that are never touched on during law school—interpersonal skills, teamwork, client communications, resilience, leadership, followership, etc.—and so many years of focused effort ahead just to obtain the requisite technical skills and knowledge to become a true expert.  Academic performance only accounts for a tiny proportion of one’s ability to run a lifelong marathon.  So the important question is, “what else matters?”

In various research projects over the years, I have reviewed personality and achievement motivation data on hundreds of lawyers.  To date, the single best predictor of high performance is “fearlessness”, which is the willingness to take on difficult tasks and not be worried about failure or being judged by others.  Something tells me these lawyers have managed to shed the fixed mindset. 

My single favorite example of a lawyer with the growth mindset is Fred Bartlit, a renowned trial lawyer and name partner in the Chicago litigation boutique, Bartlit Beck.  Over his 50-year legal career, Bartlit has tried several hundred civil jury trials to a verdict, winning a disproportionately high percentage.  Several years ago, I sat next to Fred at a dinner and asked him if he ever impaneled mock juries to help prepare for a trial.  Without missing a beat, he replied, “My last jury trial [where several hundred million dollars were at stake], I hired and ran eight mock juries.”

Now think about that.  Bartlit is in his mid-70s.  He is extraordinarily wealthy.  He has more trial experience than anyone else in the country.  Clients and fellow lawyers are convinced he was born with a natural talent.  And Bartlit has the humility, patience, and objectivity to wade through feedback from eight mock simulations, locate all his errors, missteps, and weaknesses, until he is satisfied with his level of preparation.  So I asked, “What happened?” Fred replied, “We won.”

Bartlit’s story suggests that excellence is, at least in part, a choice.  And when we attribute someone else’s success to innate talent, we may be subtly trying to explain our situation and choices.  How hard are we willing to work to become an excellent lawyer?  Are we ready to identify and embrace our errors and weaknesses?  When we adopt the growth mindset, we trade in our excuses.  It is not for the fainthearted.

The Dangers of Being Smart

I just read a short essay at the Big Think, "The Dangers of Being Smart," that reminded me of nearly every faculty workshop I have ever attended.  In a nutshell, brilliant people -- and law faculty are filled with them -- can wax eloquent on cognitive bias, yet the deft ability to describe and comprehend does little to enable brilliant people to rein in the bias.  In fact, being smart can be disadvantageous because we fall in love with the beauty and nuance of our own rationalizations and justifications.  

This really hit home for me because I have witnessed hundreds of examples in which data are never sought out or consulted because the brilliant lawyers were so persuaded by their own reasoning. (And I stipulate that I am sure I have done this many times myself.)   Or worse, good but not perfect data are dismissed because a lawyer or law professor could theorize a plausible flaw in the sample or methodology.  The glee in finding the flaw then shortcircuits the right response, which is a simple discussion of probability -- that is, what is more or less likely based on all available evidence.

The Big Think essay reminded me of Dan Kahneman's Thinking, Fast and Slow, especially the section titled "Overconfidence."  Kahneman, a psychologist, won the Nobel Prize in economics because he, along with co-author Amos Tversky, identified several predictable, recurring cognitive biases in human decisionmaking. 

Kahneman later revealed that the basis for their breakthrough research was errors they detected in their own judgments.  “People thought we were studying stupidity,” said Kahneman. “But we were not. We were studying ourselves.”   For a wonderful primer on Kahneman's unusual worldview, see this Michael Lewis essay.

[posted by Bill Henderson]

Lots of Jobs for Law Graduates -- just not Grads in the U.S.

This story is fresh off the newswire: "Law firms are no more the preferred destination for fresh law graduates looking for jobs.  With outsourcing catching up even in this industry, legal process outsourcing (LPO) companies are now bagging a large number of graduates."  A law professor opines, “There is a rising trend of students opting for LPOs. The nature of work is changing and these places offer good packages and work culture. ... [P]romotions also come faster in LPOs.”

Wonderful news.  But the story was written for the Hindu Business Line.  The law graduates went to school in India.  Why are the LPOs become more attractive jobs for Indian law grads?  Probably because (a) LPOs are increasingly focusing on process and technology, engineering out the drudgery work, and (b) process and technology are creating a sustainable competitive advantage within a global industry -- and that can support higher salaries.

In the same story, Rohan Dalal, the Managing Director of Mindcrest, a U.S.-based LPO with headquarters in Chicago, pegged the annual growth at 30% per year [remember that number]. 

Dalal explains his hiring philosophy: "There are very few lawyers available in India who are experts in the laws of the US or the UK, which constitute a bulk of our clients. In general, therefore, we prefer to hire younger legal talent, whether fresh or a few years out of Indian law schools." (Historical note: Paul Cravath explicitly focused on new law school graduates in building his firm.  Why?  He did not want to undo the bad habits and fixed ideas of other (inferior) employers -- he too had a process.)

The president of Mindcrest is a former partner at McGuireWoods, an AmLaw 200 law firm.  According to its website, Mindcrest now has 600 employees.  How many are in the U.S.?  We have no idea -- but we can triangulate data from other sources in order grasp the magnitude of changes occurring as a result of companies like Mindcrest..

So consider the following, which I believe signals a true structural shift.

Chart 1 below is generated from County Business Patterns data.  It summarizes U.S. Law Firm employment according to the North America Industry Classification System (NAICS), which is how the U.S. Census Bureau groups and categorizes economic activity.  The NAICS went into effect in 1998, replacing the Standard Industrial Classification (SIC) system, which reflected an industrial economy rather than one driven by information and services.  The advantage of County Business Patterns (CBP) is that it is not a sample -- it is "universe" data.  CBP covers everyone working in the U.S. who received a W-2.  Law firms, as shown below, comprise a 1.1 million employee sector.  [click on to enlarge]

The key takeway?  Law office jobs peaked in 2004 -- four years before the collapse of Lehman Brothers.  Total employment in law offices (NAICS 54111) totaled 1,123,000 jobs, which was 92.2% of the larger legal services sector (NAICS 5411).  Since the high water mark in 2004, the sector shrank by 26,100 jobs (at least through 2009).

County Business Patterns, however, has another catch-all category called "all other legal services" (NAICS 541199).  Mindcrest's employment (just the domestic) is almost certainly included in this catch-all.  Chart 2 below compares change in total employment from base year 1998 for "Law offices" and  "All other legal services." [click on to enlarge]

The takeaway from Chart 2 is that "All other legal services" is growing very quickly, albeit from a much smaller base.  When Law offices were shedding 26,100 jobs after the 2004 high water mark, the "All other legal services" category added 5,800 new employees.  It is worth noting that the average 2009 salary in All other legal services are 40% lower than in law firms ($46,800 versus $78,500).  [more after fold]

Between 1998 and 2009, the "All other legal services" category grew from 1.0% of the Legal Services Sector in 1998 to 1.9% in 2009, essentially doubling in importance and more than doubling in absolute employment. The CBP data are collected in March of each year.  So the data in the public domain is now over three years old. (The 2010 CBP data will be released next month.)  If the 30% growth rate is correct, the "All other legal services" sectors could be 3-4% of the U.S. legal service market. As this category becomes bigger, the Census Bureau will examine all the companies in the catch-all category and create new classification bins.   LPOs are likely to be but one new category.

Based on the large number of legal services vendors that I have met over the last two to three years -- only a subset were LPOs like Mindcrest-- and the general growth and vitality of their businesses -- most financed by nonlawyer money -- I would be surprised if the black line in Chart 2 did not continue along at a 30% per annum clip.  Further, keep in mind that the black line is only the domestic component of a global supply chain.

If we play 30% growth over a 10-year period, the total employment increases by a factor of 13.8 (in other words, take whatever total employment is, and multiply it by 13.8).  So, applying that factor to the 21,600 employment in "All other legal services" in 2009 would equal 300,000 in 2019.  Granted, a large portion of these jobs would not show up because the employment opportunities will be increasingly in places like India.  Further, technology may curtail overall growth of even Indian legal jobs. But here is the bottomline -- under all scenarios, the number of traditional jobs for U.S. law school graduates will almost certainly stagnant or decline. 

For lawyers and law professors, our cheese is being moved.  Over the last three years, I have given several dozen structural change talks.  Many lawyers tend to view it with skepticism or a desire to just run out the clock.  The law professors tend to treat it as just another academic workshop.  Regrettably, we have conditioned ourselves to believe that all ideas and data we discuss are just that -- academic.  In contrast, just this week, two general counsel of growing and important technology organizations told me -- largely in passing, not to make a point -- that Indian lawyers living in India are a regular part of their global work teams.

The longer we ignore this, the more foolish we will look.  Legal service vendors, again financed by the nonlawyers, are now in the process of taking over larger portions of the global supply chain; and thanks to technology and process, the work is destined to be lucrative.  Within a decade, a nonlawyer will be heralded in The American Lawyer for inventing a legal process.  And many U.S. law schools will shrink in size and eventually close.  Why? Because what we teach is increasingly disconnected from how law is being bought and managed by clients.  This is what structural change is eventually going to look like. 

[posted by Bill Henderson]

Great Video on Importance of Intrinsic Motivation

One of the very best books I read in 2011 was Daniel Pink's Drive: The Surprising Truth About What Motivates Us.  In a nutshell, Pink (who was trained as a lawyer but never practiced law) marshals a huge amount of social science and brain science research to demonstrate that we human beings--actually primates as a group-- have a deep, abiding desire to perform work that has its own intrinsic value. 

Pink argues that this fact has special salience to a world that rapidly transitioning to a knowledge-based economy.  Pink cites to literature showing that economic incentives work well for low-complexity repetitive task (e.g., piece work in a factory, selling cars, waiting tables, etc.).  He then presents compelling evidence that performance and creativity in a variety of higher complexity domains--the domains rising in importance in our economy--can often be stifled by management practices that place undue weight on monetary rewards.  At several points in the book, Pink singles out lawyers as a profession that is making itself miserable and creatively brainblocked by clinging to the billable hour.

If you want to get the Cliff Notes version of Drive, just watch this wonderfully produced video, which cleverly summarizes the book's central argument along with supporting evidence.

[posted by Bill Henderson]

Background on the "Facebook as Job Predictor" study

An interesting study on Facebook as a job predictor is making the rounds on the internet.  It is a serious study published in the Journal of Applied Social Psychology.   Perhaps its most interesting feature is that it maps the content of participants' Facebook pages onto scales for the Big Five personality traits. 

The Big Five are the five very broad but stable personality traits that have emerged from over 50 years of psychological research on personality and job performance.  The Big Five are sometimes summarized by the acronym OCEAN:  Openness to Experience, Conscientiousness, Extroversion, Agreeableness, and Neuroticism (this last measure is often referred to as Emotional Stability, which has a less clinical ring).  Each of the Big Five traits is typically comprised of four or five subconstructs.  (Go to this link to take for free the same Big Five assessment used in the study.)

The Big Five are connected to research on lawyers through the landmark Shultz-Zedeck Predicting Lawyer Effectiveness study.  One of the personality assessments utilized by Shultz and Zedeck was the Hogan Personality Inventory (HPI), which is seven-scale instrument based on the Big Five.   Shultz and Zedeck identified 26 lawyer effectiveness factors and subsequently assembled a sample of peer and supervisor evaluations on over 1,100 graduates of UC Berkeley and UC Hastings.  The HPI scales were positively correlated at statistically significant levels with a combined 25 of 26 effectiveness factors.   In contrast, academic predictors (UGPA, LSAT and 1st year grades) were correlated with a combined total of 11 effectiveness factors, albeit two of the correlations were negative.

One of the limitations of most personality tests is the self-reported nature of the data.  The test-taker is often interested in managing impressions.  In contrast, the test adminstrators are trying to measure the respondents' actual attitudes and behaviors.  Well, on that count, Facebook reveals quite a bit.  In fact, raters with a mere two hours of training obtained Big Five measures of study participants' personalities that were (a) strongly correlated with the self-reported measures but (b) better predictors of subsequent job performance. 

The implication?  Someday a computer spider may be mining Facebook pages to create employability profiles on job candidates.  Such a product may be too cheap and too useful for employers to ignore -- potentially better and faster, and less discriminatory, than the current ubquitious Google search.

Below is video on the study by the staff of the WSJ: