The Legal Whiteboard

What is the Significance of Major Combinations between Canadian and U.S. Law Firms?

Law firm consolidations are in the air.  Over the last couple of weeks, two major Canadian law firms have entered into combination agreements with U.S./UK counterparts. 

1. Norton Rose (a British firm with a major Canadian presence) is merging with Fulbright & Jaworski, creating a firm with 55 offices and 3,800 lawyers.  Details here.
2. Fraser Milner Casgrain is combining with SNR Denton (US-UK firm that swallowed up the legacy Sonnenschein law firm in 2010) and Salans, which is a European law firm original formed in France. The resulting firm will have 2500 lawyers in 79 offices and 52 countries worldwide.   Details here. 

In the video interview below, Jordan Furlong, a Canadian lawyer, journalist and consultant (Law21), views these developments as the beginning of a major sea change.

To my mind, the consolidations we are witnessing have a lot to do with flat worldwide revenues. Law firms become uncomfortable places when they are not growing. Yet, really big law firms seldom fail because failure requires that a large number of partners vote their feet. A 30-partner defection can be a lethal blow to a 500-lawyer firm, but not so much for a 2,500-lawyer firm. The larger number of lawyers provides managers with more time and latitude to figure out a longer term strategy. Big feels safer.  Further, once the consolidation is complete, the firm managers can thin the ranks of weaker partners, producing a stronger overall firm.  (That is the theory, anyway.)

[Posted by Bill Henderson]

Replacing the "E" in Entrepreneur with "I"

There has been a lot of press over the past few years about entrepreneurism and the law and indeed  ventures like LawWithoutWalls and clinics in law and entrepreneurship have been created by many law schools in order to hone entrepreneurship (along with other skills) in future lawyers.

Some people believe that we shouldn’t be training our future lawyers to be entrepreneurs or that it isn’t necessary or perhaps even desirable.  These people see lawyers and entrepreneurs as “strange bedfellows”.  These people smirk at Richard Susskind’s book, the End of Lawyers?.  They smirk  – not because they don’t see the question mark – but instead, because the question itself is a non sequitur – “The End of Lawyers (That’ll Be The The Day)”.  They know that it is not the end of lawyers nor will there ever be an end of lawyers.  They know that the legal rebels and law disruptors and the big-bad-non-lawyers are NOT going to take over the law market. They know that law firms and law partners and law schools and law deans and law professors will survive. 

And they are likely right.

But what they may not foresee is that the ones left standing (the lawyers, and the law firms and the lawschools and the law deans and law professors that will be left standing) will be those that no longer use the capital “I” that resides in “me, myself, and I” that has so long plagued our profession and that is based on  Individual lawyers and Individual clients and Individual law school education that inhibits collaboration with nonlawyers. and that is at the heart of how most law firms and law faculties have organized themselves  (see SlideShow making these points).

Instead, those left standing will be those that move the capital “I” from a place that has historically kept the legal profession in a closed environment, to a place where there is “Interaction” with non-lawyers, “Interdisciplinary” collaboration “Inter-department” education, and, above all, “Innovation.”  Those left standing may not all be legal entrepreneurs but they most certainly will be Intrapreneurs.  

“Smart organizations will seek out individuals who like to invent, innovate and want to be on the front lines of change. These individuals can work independently but even more important can work seamlessly as part of an integrated team structure and also effectively embrace and embody the culture of the intrapreneur’s host organization.”

So although it is true that these new entreprenurial focused law ventures are made up of many legal rebels and law disrupters and legal entrepreneurs, and that they attempt to instill an entrepreneurial spirit in all that participate.  More than that, they represent a community of lawyers that believe in the Intrapreneur in us all, the ability to exapt ideas from other places in order to affect change (see Article on the need for exaptation in the law market).  They believe in those that use the capital "I" to replace the E in Entrepreneur. They believe that it is not just the Entrepreneurs but also the Intrepreneurs in law that will be left standing. 

Those that continue to use the capital "I" as in "me myself and I" (and refuse to change) will be those that, like the cheese, stand alone.

 

[Michele DeStefano]

An Open Letter to India's Graduating Classes

From far away, knowledge workers in India appear to be a formidable and growing threat to American college graduates.  But according to Mohit Chandra's essay, "An Open Letter to India's Graduating Classes," which appeared in the India Ink section of the NY Time/International Herald Tribune, the current generation of Indian university and professional school graduates is hindered by a serious skills and values gap.   Indeed, the author, a partner at KPMG in Delhi, chastises the newly minted 2012 graduates for being spoiled and behaving unprofessionally. 

There are two crosscurrents at work here that are quite difficult to untangle: (1) the process of globalization, which is linking together the economies--and thus the cultures--of India and the U.S.; and (2) workplace generational frictions, which apparently are just as vexing in India as they are in the U.S.  As a mid-career Indian professional with an MBA from Ohio State and a work history that includes KPMG, Capital One, McKinsey & Company, and Ernst & Young, Chandra sits on top of both of these faultlines. 

I think Americans might be surprised by both the content and tone of Chandra's letter, which cannot be judged by western standards.  The letter reveals as much about the U.S., and humanity, as it does about India.  Quite a read.

Dear Graduates and Post-Graduates,

This is your new employer. We are an Indian company, a bank, a consulting firm, a multinational corporation, a public sector utility and everything in between. We are the givers of your paycheck, of the brand name you covet, of the references you will rely on for years to come and of the training that will shape your professional path.

Millions of you have recently graduated or will graduate over the next few weeks. Many of you are probably feeling quite proud – you’ve landed your first job, discussions around salaries and job titles are over, and you’re ready to contribute.

Life is good – except that it’s not. Not for us, your employers, at least. Most of your contributions will be substandard and lack ambition, frustrating and of limited productivity. We are gearing ourselves up for broken promises and unmet expectations. Sorry to be the messenger of bad news.

Today, we regret to inform you that you are spoiled. You are spoiled by the “India growth story”; by an illusion that the Indian education system is capable of producing the talent that we, your companies, most crave; by the imbalance of demand and supply for real talent; by the deceleration of economic growth in the mature West; and by the law of large numbers in India, which creates pockets of highly skilled people who are justly feted but ultimately make up less than 10 percent of all of you.

So why this letter, and why should you read on? Well, because based on collective experience of hiring and developing young people like you over the years, some truths have become apparent. ...

There are five key attributes employers typically seek and, in fact, will value more and more in the future. Unfortunately, these are often lacking in you and your colleagues.

1.You speak and write English fluently: We know this is rarely the case. Even graduates from better-known institutions can be hard to understand.

Exhibit No. 1: Below is an actual excerpt from a résumé we received from a “highly qualified and educated” person. This is the applicant’s “objective statement:”

“To be a part of an organization wherein I could cherish my erudite dexterity to learn the nitigrities of consulting”

Huh? Anyone know what that means? We certainly don’t.

Continue reading "An Open Letter to India's Graduating Classes"

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?

Continue reading "How to Increase Your Law School's Academic Reputation"

Lubet on John Brown's Spy

Steve Lubet (Northwestern) has released a new book,  John Brown’s Spy: The Adventurous Life and Tragic Confession of John E. Cook.  It is the story of one of Brown’s chief lieutenants, who spent a year in Harper’s Ferry preparing for the raid, but who later betrayed the conspiracy by providing a “full confession” to the Virginia authorities.  Steve advises, for the benefit of lawyers, law professors, and legal historians, that over half the book is devoted to the trials following the raid, including the previously unknown role of Daniel Voorhees, an Indiana lawyer who later became one of Lincoln’s chief adversaries in Congress.

Here's the description from the Yale University Press website:

John Brown's Spy tells the nearly unknown story of John E. Cook, the person John Brown trusted most with the details of his plans to capture the Harper's Ferry armory in 1859. Cook was a poet, a marksman, a boaster, a dandy, a fighter, and a womanizer—as well as a spy. In a life of only thirty years, he studied law in Connecticut, fought border ruffians in Kansas, served as an abolitionist mole in Virginia, took white hostages during the Harper's Ferry raid, and almost escaped to freedom. For ten days after the infamous raid, he was the most hunted man in America with a staggering $1,000 bounty on his head.

Tracking down the unexplored circumstances of John Cook's life and disastrous end, Steven Lubet is the first to uncover the full extent of Cook's contributions to Brown's scheme. Without Cook's participation, the author contends, Brown might never have been able to launch the insurrection that sparked the Civil War. Had Cook remained true to the cause, history would have remembered him as a hero. Instead, when Cook was captured and brought to trial, he betrayed John Brown and named  fellow abolitionists in a full confession that earned him a place in history's tragic pantheon of disgraced turncoats.

[Jeff Lipshaw]

"2012 was the First Moneyball Election"

So concludes John Sides (GW Political Science) at The Monkey Cage.  John writes:

Barack Obama’s victory tonight is also a victory for the Moneyball approach to politics.  It shows us that we can use systematic data—economic data, polling data—to separate momentum from no-mentum, to dispense with the gaseous emanations of pundits’ “guts,” and ultimately to forecast the winner.  The means and methods of political science, social science, and statistics, including polls, are not perfect, and Nate Silver is not our “algorithmic overlord” (a point I don’t think he would disagree with).

But 2012 has showed how useful and necessary these tools are for understanding how politics and elections work. ...

And a fitting comic courtesy of xkcd:

[posted by Bill Henderson]

What Would Happen If Nonlawyers Invested in Law Firms? Soon We Will Have Data

As U.S. lawyers successfully derail the most modest changes to the Rule 5.4 prohibition on nonlawyer investment in law firms, see e.g., this Wisconsin Bar commentary, the Brits are going in an entirely different direction.  The Legal Services Act of 2007 lifted the fee-splitting prohibition in the U.K., but it has taken five years to set up the necessary regulatory infrastructure to facilitate the opening of the legal market to nonlawyer investors. 

The UK experience is bound to have a big influence on the U.S. debate because so much of the rhetoric on both sides is based on the alleged impact of the nonlawyers.  Proponents argue that it will drive down costs, accelerate innovation, and improve access to justice.  The critics, who so far have the upper hand, assert that investor profit motives will compromise lawyer independence, leading to the ruination of the profession. 

Thanks to developments in the UK, we are moving from abstract arguments to concrete experience.  Coverage in the British legal press suggests that a new legal order is indeed beginning to take shape.

One novel development, reported by the Law Society Gazette, is an equity stake in the Knights Solicitors law firm by Hamilton Bradshaw, a British private equity fund run by entrepreneur and investor James Caan.  Knights is a 23-solicitor Midlands regional firm founded in 1759 (yes, 1759) whose business profile at the time Caan invested was being a competent, responsive law firm at a price point considerably below the London-based firms.  See, e.g, this Legalweek article describing Knights' collaborations with US/UK powerhouse Hogans Lovells.  

The plot here is pretty thick.  In both the UK and Austrailia, which also liberalized its legal market a few years ago, the early investors have been on the personal injury side.  In contrast, Knights is full-service commercial law firm.  With the aid of outside capital, the firm's ambition is to catapult itself into the top 100 UK law firm within three to five years. Further, Caan is not just any investor.  He is famous in England because he served as as judge on the popular Dragon's Den television program.  The show's concept is simple:  entrepenuers pitch their ideas to some colorful, high roller celebrity investors.  Contestants potentially get funding plus a priceless primetime branding opportunity.  Dragon's Den was the basis for ABC's Shark Tank, where serial entreprenuer and Dallas Mavericks owner Mark Cuban serves as a judge.

Well, Caan got the regulatory okay a few months ago and is settling in with his new investment.  His early rhetoric suggests that he has little interest in fitting into the dominant culture of the British legal profession.  According to a story titled "Profit a 'Dirty Word' in Law," Caan regaled the NetLaw Strategic Leadership Forum in London with his experience of interviewing 20 firms in his bid to enter the legal market.  What he observed was "a profession dogged by the partner structure, failing to build a lasting relationship with clients and with too little focus on making money." 

Although he and others would be keen on investing in more law firms, the culture within firms, including excessive deliberations in making basic management decisions, is a major hinderance.  Caan remarked:

A lot of people said this is not how this industry works: we’re about service, and profitability was a dirty word.  ... The minute a business forgets the reality of why it is there it will never grow. Every day you walk into the office you’re looking to make a profit. Being ashamed or embarrassed is not how you grow – every business I invest in, I’m not ashamed that is the strategy.

For a U.S. audience, this quote is likely to stoke the fire of both critics and proponents of fee-splitting.  On the one hand, here is a nonlawyer wanting to clean house in pursue of profits -- that seems to go the heart of lawyer independence.  On the other hand, wringing out more profit could well be possible if lawyers had a laser-like focus on the needs of their clients.  Caan only makes money if the clients (including sophisticated commercial clients) are drawn to his model, essentially rejecting the bundle of services offered by traditional law firms.

The late Larry Ribstein was a sincere believer in the latter view.  According to Larry, the pervasiveness of lateral movement -- which, under state legal ethics rules, cannot be curtailed by noncompete agreements -- had caused law firms to become hopelessly focused on the short-term.  This includes the most prestigious firms, which were (and, in my estimation, are) burning down decades of accumulated reputational capital.

Yet, the short-termism of coporate law firms is curable with money plus a coherent business strategy.  With an injection of patient capital, some extremely talented lawyers could be persuaded to stick around and focus on innovative legal products and services.  The idea is that patient capital could guarantee a partner's income for a period of years (essentially a partner's opportunity cost on the lateral market) in exchange for splitting the upside on innovations with the nonlawyer capitalists. 

In a few years, Larry's ideas will be fully roadtested in the U.K.  If he was a right (and I think he was), this could eventually become a consumer rights issue that captures the attention of state legislatures. And who will be advocating for those consumers?  Lawyers who want to take outside investments so they can replicate the financial success enjoyed by their UK counterparts.  Time will tell.

[posted by Bill Henderson]

The Rise of Legal Analytics, or the First Signs of Big Data in Big Law

Have your heard of "Big Data"?  Basically, it is the mining of large existing datasets to make better business decisions.  There is a lot of discussion on this topic in the business world.  See, e.g., Big Data: The Management Revolution, Harvard Business Review (Oct 2012); The Age of Big Data, New York Times (Feb 11, 2012).  

The first signs of Big Data in the law firm world are the companies that provide electronic billing platforms for large corporations.  These companies have all the data needed to discern the relative efficiency of various service  providers -- name of firm, title of lawyer, practice area, billing rate, office, and a large portofolio of matters uniformly coded by subject matter and discrete technical tasks.  Clients, of course, know the outcomes of matters, which provides the last piece of missing information to not only calcuate cost and efficiency, but also value delivered to the client.

In the video below, reporters from the Boston Business Journal explain the services provided by these new data analytic companies (TyMetrix and Sky Analytics are briefly featured). 

What I love about this video is that the reporters are outsiders to the law world.  They note that the "transparency" and "information" these companies provide  are wonderful developments for clients -- and, of course, they are 100% right.  Nobody wants to overpay, so tools to eliminate this problem are going to be widely embraced.

The obviousness of this point is why the legal services industry is at the beginning, rather than the middle or end, of a massive structural shift that will be wonderful for legal consumers but profoundly disruptive to law firms and law schools.  In the years to come, we will have fewer lawyers and generally flat or declining incomes within the profession. 

The real money will be made at the intersection of law and technology, which has the potential to scale legal work so it can be better, cheaper and faster.  This is the road to commodification of law.  It is good for society, but bad for those of us wedded to a traditional model where lawyers enjoyed more market power.  Those days are fading into the horizon.

[posted by Bill Henderson]

Straight Talk on the Woes of BigLaw, by Bruce MacEwen

By Bruce MacEwen, of Adam Smith, Esq., a well known blog on law firm economics.  What Bruce is talking about is going to have major fallout for legal education.

[posted by Bill Henderson]

A Thought Experiment: Barber College Research and the Burgeoning CWC ("Certified Wisdom Counseling") Industry

Posted by Jeff Lipshaw

Two posts over at PrawfsBlawg, one by Jason Solomon and one by Paul Horwitz, both on the subject of defending legal scholarship, caught my attention.  

The question is whether the writing that emerges from law professors has value, whatever that means.   If it does have value, does it need to be instrumental value?   I think "instrumental" means that it's apparent very quickly whether there's value (say because it actually generates a rule of law - Areeda and Turner's mid-197o's article on predatory pricing is a classic example).  

I'm willing to concede that the Hart-Dworkin debates on positive and natural law contribute to ultimate flourishing of humankind, but I'm also pretty sure that whatever "instrumental" means, those articles are less so than Areeda & Turner on predatory pricing.  (I'm reminded of the old "BC" cartoon that posed the philosophical question "why are we here?"  The answer from one of the characters was "The sustenance of Hart.")

Steve Lubet (Northwestern, right), it seems to me, correctly identified the issue, and it got batted  around in the comments:  is there too much scholarship relative to the subject? Nevertheless, the metaphor also getting batted around in the comments, to the effect that law professors are to lawyers as ornithologists are to birds (i.e. birds don't care about the scientists who study them), doesn't work because ornithologists aren't trying to teach the birds how to be birds.

Humor me with the following thought experiment.  

Barber colleges decide next week that faculty, themselves a tiny fraction of the total number of barber college graduates, not only should be teaching students how to cut hair and serving the institution, but writing at least one fifty page article a year.  

The article could be about barbering, but maybe not.  The article could be practical or theoretical.  It could be disciplinary or inter-disciplinary.  There would be no peer review, and the articles would be edited by barber college students.   Finally, the articles might have immediate practical and instrumental value, or they might simply contribute to the sum of the world's knowledge and the ultimate flourishing of humankind.

At the same time, the perfect storm of the Information Age, rising incomes, and access to higher education has resulted in an entirely new profession, now regulated and subject to licensing as "Certified Wisdom Counselors."  Thousands of previously unemployable philosophy and humanities undergraduate majors now are employable as CWCs, the educational requirement of which is a degree in philosophy.  

Unable to keep up with the demand for teachers, philosophy departments hire some CWCs to teach in philosophy departments, understanding that only a small fraction of the CWCs will go on to be CWC teachers.  Most CWCs will in fact go on to be practicing CWCs.  But as a result, the number of people teaching in philosophy departments explodes.  And it's a requirement of being a teaching CWC that you publish at least one fifty page article a year.  

The article could be about wisdom, but maybe not.  The article could be practical or theoretical.  It could be disciplinary or inter-disciplinary.  There would be no peer review, and the articles would be edited by CWC students.   Finally, the articles might have immediate practical and instrumental value, or they might simply contribute to the sum of the world's knowledge and the ultimate flourishing of humankind.

In each case, isn't it clear that we are likely to have too much scholarship wholly as a result of the structure of the institutions and the incentives for advancement within them?

The closest educational analogs to law, I think, are medicine and business.  Medical educators may often have the same degree as practitioners, but schools use armies of clinical professors to teach clinical skills.  Those clinical professors, I'm pretty sure, aren't required to create scholarship.

Business schools, like law schools, turn out armies of graduates.  But (and I've done all of about thirty seconds of research on this - looking at the As and Bs in the faculty list of the Ross School of Business at the University of Michigan), full-time tenured and tenure-track faculty overwhelmingly get Ph.D.s, differentiating them from the students, who graduate with M.B.A.s.*

As Steve Lubet points out, it comes down to cost.  When the law industry was booming, nobody cared much about this.  Now it's an issue.

* UPDATE:  Except when they teach law or ethics in the business school, in which case a J.D. is a sufficient degree.

Hilarious Video on the Billable Hour

From our UK colleagues, specifically the lawyers at Riverview Law, which is a new-breed British law firm that does things exclusively on the flat fee model.  Check it out:

Riverview's advantage may be more than its ability to produce funny videos that ricochet into the inboxes of inhouse lawyers. (I was alerted to this video via Twitter from Patrick Lamb, one of the ABA New Normal guys and a principal at Valorem Law, a Chicago-based flat-fee shop.  Pat recieved his link from a client.)

Lawyers from Riverview Law were at the Legal Tech Camp that I have discussed in prior posts (here and here).  To my mind, Riverview's greatest advantage is focus -- they want to do the same work as other corporate law firms at the same quality level or higher, but also at a signficantly lower, fixed fee price.  The firm appears to work backwards from the price to make process-design and sourcing decisions.  The result, plain and simple, is innovation. Long term, that is the only way they can make money. 

Here is how they explain just one of their services, called Legal Advisory Outsourcing -- again, in a well produced video.

If you think Riverview Law is no big deal, this may get your attention.  The flat-fee shop is partially owned by the mega law firm DLA Piper.   Earlier this year, they opend an office in New York City.

[posted by Bill Henderson]

Drop in the Big Law Median Salary is only Half the Story

NALP just announced that the median salary for first year associates in Big Law has dropped from $160K to $145K.  I think that is very significant.  We are now back to to the entry level price point of 2007.

But to my mind, there is much bigger story here.  In 2011, firms of 500+ attorneys hired 2,856 entry level lawyers.  In 2007, that figure was 4,745.  So, after five years, Big Law is paying the same wage but hiring 40% fewer lawyers.  Compare 2007 NALP Nat'l Summary with 2011 NALP Nat'l Summary. 

Here is another important piece of NALP data, generated from the print versions of the July 2012 NALP Bulletin.  It shows the percentage of entry level law jobs that are private practice.

Two takeaways here: (1) there is a longterm trendline showing a declining number of private practice jobs--and that is the economic engine that enables law schools to exist at current tuition levels, and (2) the cliff-like dropoff in 2010 and 2011 is likely Big Law, and that hurts.

[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]

Why Are We Afraid of the Future of Law?

Below is my most recent column in the National Jurist [PDF version].  Although 100% targeted at law students, I think lawyers and law professors might find this topic interesting. [Bill Henderson]

Richard Susskind is a famous British lawyer and technology consultant who travels the world giving speeches on how the legal industry is on the brink of a fundamental transformation.  Because his topic is change, Susskind’s ideas are quite controversial among lawyers.  But as a futurist, he has a pretty good track record. 

Back in 1996, in his book The Future of Law, Susskind predicted that e-mail would someday become the dominant method for lawyers and clients communicate with each other.  Because the Web was still a novelty limited to universities and computer aficionados, Susskind’s comments were viewed as reckless and unprofessional—lawyers would never rely on such an insecure method to communicate with clients.  Yet, 16 years later, lawyers are daily lives are comprised of an endless stream of emails coming over their desktops, laptops and smart phones. 

Continue reading "Why Are We Afraid of the Future of Law?"

Location, Location, Location – Geography Matters in Law School Employment 2010-2011

NALP notes that for the Class of 2010 -- and the Class of 2011 -- two-thirds of all employed graduates were employed in the state in which their law school was located. This suggests location matters.

Is location important to employment results at a large number of schools? Are some law schools more national than others? Are some states more “local” in hiring than other states? The answers are yes and yes and yes.

ANALYZING SCHOOL SPECIFIC DATA -- This analysis is based on the Class of 2010 and Class of 2011 employment outcome data reported on the ABA Section of Legal Education website, excluding the law schools in Puerto Rico. This means there are 195 law schools in this analysis (if the two Widener campuses are combined).

The law schools were asked to report the three states with the most employed graduates and the number of employed graduates in each of those three states. Taking those totals as a percentage of employed graduates, and paying attention to the states identified, one can get some idea of which schools are “regional” and which schools might actually have a more “national” footprint. The simple result of the analysis is that the vast majority of schools are “regional” rather than “national.”

1. For both the Download Class of 2010 and the Download Class of 2011, there were 117 law schools for which more than 67 percent of their employed graduates are employed in the state in which the law school is located.
2. For the Classes of 2010 and 2011, there were 144 and 145 law schools, respectively, for which more than 67 percent of their employed graduates are located in the state in which the law school is located or an adjacent state, and 104 law schools for which more than 80 percent of their employed graduates are located in the state in which the law school is located or an adjacent state.
3. There were only 46 law schools for which less than 67 percent of their employed graduates were employed in the state in which the law school is located or an adjacent state for both the Classes of 2010 and 2011.

Notably, 28 of these 46 law schools are in the USNews top-50, for which it is easily imaginable that the employment geography is much more national than regional. For many of these 46 law schools, two of the three states with the most employed graduates generally are not adjacent to the state in which the law school is located, suggesting some national reach. The three non-adjacent jurisdictions reflected most frequently should not be surprising – California, the District of Columbia and New York. Of the 18 other law schools, nine law schools are ranked in the alphabetical list of schools -- schools one generally would consider regional – while nine are ranked between 51 and 145 in USNews.

Perhaps most significantly, due to the incomplete nature of some of the data sets, this summary probably understates the number of law schools for which the employment outcome data suggests the law school is more regional than national. Several of these 46 law schools come in with 60% or more of their employed graduates employed in the state of the law school or an adjacent state for both years -- Boston College, Minnesota, NYU, Ohio State and Penn State – and if the data were to include graduates employed in all adjacent states, the total for these schools well might exceed 67 percent.

In sum, then, more than 76% of all law schools and more than 87% of law schools outside the USNews top-50 had more than 67% of their employed graduates in the state in which the law school is located or an adjacent state for either the Class of 2010 or the Class of 2011.

LOOKING AT STATE SPECIFIC DATA -- NALP also notes that for the Class of 2010, there are 30 states in which two-thirds or more of the jobs were taken by graduates from law schools in those states. (Jobs & JDs, Class of 2010, p. 69)  Taking NALP’s state-specific data for the Class of 2010 in conjunction with the ABA’s data for the Class of 2010, there actually are 35 states in which two thirds or more of the jobs were taken by graduates of law schools in those states or an adjacent state and 30 states in which three-quarters or more of the jobs within the state were taken by graduates of the law schools in the state or in an adjacent state.

Again, this data likely understates the results. For example, in Arizona, Colorado, Connecticut, Maryland, Tennessee, and Virginia, roughly 65-75 percent of jobs within the state were taken by graduates from law schools within the state or an adjacent state. But with several schools in adjacent states not counted in the tallies because these states were not one of the top three states for employed graduates from those schools, one could infer that were graduates from all schools from adjacent states included the percentage might exceed 75 percent. (Notably, 13 of the 15 states with less than 67 percent of jobs taken by graduates of the law school in the state or law schools in adjacent states are states with modest populations and only one law school (or no law school) – Alaska, Delaware, Hawai’i, Idaho, Maine, Montana, Nevada, New Hampshire, New Mexico, Rhode Island, South Dakota, Vermont, and West Virginia.  The other two states are Utah and Virginia. The District of Columbia also falls into this category.)

LOCATION MATTERS -- In sum then, location matters. For the vast majority of law students at the vast majority of law schools, the vast majority of reasonable employment prospects associated with going to a given law school are going to be in the state in which the law school is located or an adjacent state. In the absence of a unique or specific aspect of a law school's program that might make a particular law school very appealing, this suggests that location should matter when considering a law school, perhaps more than ranking.

For example, if a prospective student has a choice between going to a higher ranked regional law school in a state in which the student does not anticipate practicing or living (and perhaps paying more in tuition), or a lower ranked regional law school in the location in which he or she hopes to live and work professionally (and perhaps paying less in tuition), the prospective law student should give serious consideration to attending the lower-ranked regional law school in the location in which he or she hopes to live and work professionally. This will make it easier to begin networking while in law school and to facilitate employment opportunities in the region in which the student is interested in practicing law and living. (And it may help the prospective student save money if the lower-ranked regional school happens to cost less (if it is a public school, for example), or if the prospective student has a more competitive LSAT/GPA profile at the lower-ranked regional school such that the student may be eligible for a scholarship.) 

[Posted by Jerry Organ]

"There is a Shortage of Skilled Workers"

That is the message delivered by Patricia Milligan, president of Mercer's human capital business.   Who are the workers she is talking out?  Managers, technicians and executives working inside the world's biggest companies.

I realize that many lawyers and law professors are likely to be skeptical of the pronouncements of human capital consultants.

But for a moment, let's take Milligan at face value.  So, what are the skills in short supply?  Milligan does not answer that question in the above video.  But in the video on this webpage she suggests that such skills are  a combination of communication, colloboration, and data analytic skills. 

Note that Milligan thinks the talent shortage problem is too big for employers to solve on their own.  This is leading to collaborations with academic institutions.  Are law schools ready for such a step?

[posted by Bill Henderson]

Call for Papers - Diversity in Legal Education and the Law

Our friend Jeremy Telman (Valparaiso, right) sends us this call for papers:

Future Role of Diversity in Legal Education and the Law:

Symposium Honoring Indiana Supreme Court Chief Justice Randall T. Shepard

Valparaiso University Law School

Valparaiso, Indiana

In creating the Indiana Conference for Legal Education Opportunity (“ICLEO”) program, Chief Justice Randall Shepard took a significant step in ensuring that all citizens are truly equal in the eyes of the law.  Indiana became the first state in the nation to have its own CLEO program to assist minority, low-income or educationally disadvantaged college graduates pursuing law degrees.  The ICLEO model has now been adopted by other states.

The Valparaiso University Law Review is currently accepting submissions for the forthcoming Shepard Symposium and Special Issue.  The Shepard Symposium will provide a forum for a comprehensive inquiry into the role of diversity in legal education and the legal profession. The Symposium will explore diversity issues in legal education and the legal profession while also recognizing Chief Justice Shepard’s role in fostering diversity.

To submit a paper for presentation at the Symposium, please provide an abstract of you work by email submission no later than Monday, December 3, 2012. 

Abstract submissions should be made via email to the VULR Symposium Editor at matthew.brandabur@valpo.edu

Abstract submissions should include a cover letter and a copy of the author’s curriculum vitae

Submissions must be in MS Word format

All participants are expected to produce a manuscript suitable for publication in the Valparaiso University Law Review.

[Jeff Lipshaw]

"Application, Discipline, Focus, Repetition"

For the Labor Day weekend, I thought I would post this video of Henry Rollins, an American singer and artist who has continually reinvented himself since he left his job as a manager of a Hagen-Daaz ice cream store in 1981 to become the lead singer in Black Flag.

The point of posting this video is not to glorify Henry Rollins, but to consider, on its own terms, the life narrative of one interesting person. Rollin's formula of "application, discipline, focus, repetition" sounds a lot like deliberate practice.  Based on my own research, I have broken this process into two steps:

1. Identifying the core elements needed to be become an expert or master in a specific domain -- Jeff Lipshaw was alluding to this in his post on Donald Schon and reflective practice;
2. Practicing, through thousands of hours of effort, on elements that one lacks in order to move along the continuum to mastery.  Number 2 works best when the person has the benefit of feedback and coaching.  Of course, they also have to be willing to do the work.

For an individual, it may not be necessary to formally break down the core elements into specific pieces.  Instead, these pieces can be obtained iteratively through trial and error and reflection.  I think this is what Rollins has done. It is a formula that works for one highly determined person.  But can it be scaled?

As an educator, I am interested in making the components of practice mastery more explicit and transparent--this is step #1 above.  To  accomplish step #1, we still need to do foundational research that  deconstructs the careers of outstanding lawyers into sets of specific skills, abilities, and competencies--i.e., the things to be practiced.   (Notice I said "sets" -- outstanding lawyers often master different domains.)  At present, the Shultz-Zedeck Effective Lawyering study is the only solid published research that is even adjacent to this topic.

Once these components of effective lawyers are identified--i.e., a law school identifies the skills, abilities and competencies it wants to develop over the course of three years--we move to step #2.  This step raises complex questions of order (which competencies first, which come second, etc.) and pedagogy (best and most cost-effective methods) and measurement (how do we know we have made progress?).   I think the answers would have to come iteratively, through trial and error. 

Any educational institution pursuing this strategy would have to commit itself to studying and continuously improving the educational process.  For law schools, this would be new.  At the vast majority of law schools, we mostly teach legal knowledge, we don't articulate our intended educational outcomes, we let students pick their courses ala carte with minimal guidance, and we don't engage in serious measurement. But we could.  I think this is the next great frontier--an enormous opportunity for any law school willing to think for itself, to experiment and to change.  The data needed would come from one's own alumni, ideally supplemented with data sharing within a law school consortium.

[posted by Bill Henderson]

In the Name of Ethics: The Good, the Bad, and the Ugly

Last month, I was at the International Legal Ethics Conference in Banff (ILEC V).  During my third presentation/panel of the conference - the third of which was not actually concentrated on legal ethics -  it occurred to me that calling the conference the “International Legal ETHICS Conference,” and calling the attending scholars and legal professionals “legal ethicists” was, on the one hand, completely accurate and a good thing (“the good”), but on the other hand, was perhaps an undersell and maybe a bad thing (‘the bad”).

The Good
Calling this area of study “legal ethics,” is and has been a good thing.  Likely, it was the right set of words originally.  “Legal ethics”  immediately resonates with insiders and outsiders, lawyers and nonlawyers -- especially in today’s market of lawyers gone bad.   Moreover, it immediately communicates.  If you tell someone you study the legal profession, you get a quizzical look.  If you say you study “legal ethics,” you get a head-nod.

Further, calling what we do “legal ethics” can be credited with uniting a group of academics and legal professionals from around the world that consider themselves experts and thought leaders in legal ethics.  These professors and professionals commonly teach a course on professional responsibility and write about the ethics of different types of practice and professionalism.  

The ILEC V is proof of the power of a common agenda to cross cultural and geographical distances.  The ILEC V is proof of the power of a common agenda to affect change and unite change-agents.  In addition to teaching and writing about legal ethics, the group that gathered at the ILEC V in Banff is known for challenging the status quo and innovating the way we think about, approach, and teach legal ethics.  

However, it was clear as I participated in panel after panel, that this group of legal ethicists aren’t only ethicists.  The teaching and scholarly agenda of most of the academics and legal professionals attending the conference is much broader than the words “legal ethics” encapsulate.  In keeping with that, many of the panels concentrated on topics outside or in addition to legal ethics like regulation, empirical study, innovation in education, and so on.  

The ILEC V was proof that lots of good - more than good - is coming in the name of legal ethics.  

So how can that be bad?

The Bad
Calling what we do “legal ethics,” however, isn’t perhaps all good.

Although the words “legal ethics” immediately conjure up something understandable in the minds of others, they paint an incomplete picture.  Many (if not most) legal ethics scholars would be more aptly described as analyzing and writing about the legal profession which includes the study of legal ethics but also the study of minority, diversity, and gender issues, the role of general counsels, prosecutors, and, professional services, the changing landscape of regulation, law firm practice, and corporate structure, and all areas of legal education.  

Somehow, it seems that the analysis of the Model Rules of Professional Conduct have become a proxy for the field of legal ethics.  But this may not be the most principled way to think about the field of legal ethics.  An article analyzing the pros and cons of outsiders investing in law firms and the impact and roadblocks created by Model Rule 5. 4, although it touches on ethical issues, is not really an article about legal ethics.  An article analyzing legal innovation outside of the U.S. and critiquing the Model Rules of Professional conduct that impede such innovation within the U.S. is not really an article about legal ethics.  Not to mention that labeling these works as such, may water down the importance of scholarship that really is focused on legal ethics.

So why do we continue to call these other things“legal ethics”?

The Ugly
Perhaps we call these other things legal ethics because we think deep down that it legitimates our “other” scholarship in the eyes of our academic peers.  When our work is labeled “legal ethics” scholarship, it is easily accepted if not revered by other scholars and outsiders.  But when what we do is labeled as “the study of the legal profession” or “legal profession scholarship,” when what we present or write about has a real and practical component to it (even though it has a normative component) it can be critiqued for being too descriptive.  It can be criticized because its recommendations for how the world should be rely on how the world is, that is, the normative argument is contingent on how things really could be.  

Or perhaps we call it “legal ethics” because (at least for untenured academics) it buys us credibility for the other things we choose to spend our time doing like co-chairing and being the keynote speaker at the Corporate Counsel Summit (something that some faculty believe should not be counted as an academic activity in a tenure review)  OR creating a new part-virtual global collaboratory designed to innovate the way we practice and teach law (which some faculty believe is not worthy of law school credit).   

True, there is a lot of good in analyzing, teaching, and writing about “legal ethics” and we should not stop doing so.  

True, the world is coming around.  The world is beginning to see the value in research and scholarship that dissects what is happening in the global legal marketplace - in practice and in education.  

And true, it is easier, in the meantime, until that world view changes, to use the lore of “legal ethics” to buy the freedom to do our other work -- our qualitative interviews of lawyers, our empirical studies on legal education, our experiments in legal innovation.  In the meantime, it is a lot easier to call it “legal ethics” than to figure out exactly what to call it and risk calling it something that isn’t seen as academic enough or that impedes our ability to have a practical and important impact on our profession.  

But as the Givers latest song lyrics make clear, the “ugly” truth is that there is no such thing as a “meantime”  -- and this is especially true in today’s law market.  Tomorrow, one of our law schools might close.  Tomorrow, one of our law firms might be bought.  Tomorrow, one of our law students (or all of them) might not get hired.  Tomorrow, a nonlaywer might be practicing law without reproach.  

The ugly truth is that if, in the meantime, we continue to label all that we do as “legal ethics,” we may get stuck in the meantime and never get around to calling what we do what it is.  And in so doing, we may get stuck in the meantime and never turn what we do, turn us, into what it and we can become . . . .

Our collective agenda is something that includes the study of legal ethics but is more than that . . . it is the study of the legal profession, the law market, what it was, what it is, and what it should be.  And more than that it is a passionate dedication to understanding how the law market works and how law is taught in order to affect change -- not just in how we think about these various stratums but in what we as lawyers and educators “do” and how we do it.  

The time is now to call what we do what it is and call it out loud.  The time is now to challenge those that think that the study of “legal ethics” or constitutional law or legal theory is more important, more normative, or more academic than studying what the law market is, predicting what it might be, and arguing for what it should become.  

[Michele DeStefano] 

Position Announcement - Professor in the Practice - Transactional Skills

 From my co-director and co-chair Joe Franco (Suffolk, right) and me:

SUFFOLK UNIVERSITY LAW SCHOOL invites applications for an appointment as Professor in the Practice of Law to instruct in and direct its Transactional Skills Program starting in the 2013-14 academic year. We seek a candidate who has the interpersonal skills, vision and ambition necessary to establish an innovative transactional lawyering skills program, and who will function as the program’s architect, principal faculty resource, and, as necessary, supervisor in mentoring adjunct faculty members. We welcome applications from persons with a demonstrated background in transactional practice or pedagogy and a commitment to teaching, and particularly encourage applications from women, persons of color, sexual orientation minorities, and others whose backgrounds will contribute to the diversity of the faculty. The faculty position will either be tenure-track or be covered by a long-term renewable contract. Interested candidates should contact Professors Jeffrey Lipshaw or Joseph Franco, Co-Chairs, Business Law and Transactional Skills Committee, at jlipshaw@suffolk.edu or jfranco@suffolk.edu, with a copy to jlafauci@suffolk.edu, or mail their materials to the Co-Chairs of the Business Law and Transactional Skills Committee, c/o Ms. Janine LaFauci, at Suffolk University Law School, 120 Tremont St., Boston, Massachusetts 02108-4977. Suffolk University is an equal opportunity employer.

[Jeff Lipshaw]