Monday, October 29, 2012

To better prepare students, law schools need to offer specialty training

From the New York Times DealBook commenting on NYU's recent decision to revamp the third year curriculum.

The Shift Toward Law School Specialization

The twilight of the generalist law degree is here.

As Peter Lattman reported last week, New York University School of Law is retrofitting its third-year curriculum to allow for increased specialization. Options include advanced study in areas like tax or corporate law, working in Washington at a federal agency or foreign study in Buenos Aires, Paris or Shanghai.

While the study-abroad aspect of the program has received much of the attention, the heart of the proposal is an important shift toward specialization.

In the traditional model of legal education, schools offer a general professional degree in law. No majors or concentrations. Schools provide a strong foundation of legal analysis and grounding in the common law, on the assumption that law firms will teach new associates the specifics of what they need to practice law, whether that means drafting deal documents or taking a deposition.

In the emerging model, law students must add on a degree, certificate or other indication of readiness to engage in a particular practice area or industry. N.Y.U.’s strategy committee described this goal as providing “professional pathways that prepare students to operate in a world that demands increasing specialization.” (Full disclosure: I was a visiting professor of law at N.Y.U. in 2010.)

Law schools, like most established enterprises, change only when they have to. In this case, the ripples of change arising from the segmentation of the market for legal services have been felt by corporate clients, law firms and law schools.

Corporate clients are more savvy, sophisticated and cost-aware. Routine legal work is increasingly outsourced offshore, outsourced to contract attorneys or performed by professionals who do not have a Juris Doctor degree.

Law school graduates who fail to land one of the shrinking number jobs at big law firms find themselves moving down-market to small law firms for low pay, or competing with college graduates and M.B.A.’s for jobs in compliance, risk management or business development.

Law firms are struggling with the new normal of a segmented industry. The new economics of the profession are marked by increased lateral mobility among partners, increasing numbers of nonequity partners, increased client scrutiny of fees and a decrease in the routine legal work that used to support the pyramid model. As a result, it is harder for law firms to devote nonbillable time to training entry-level associates. Law graduates are expected to arrive knowing more than just how to “think like a lawyer.” The tricky part for law schools is trying to figure out what, exactly, they need to know.

In my view, law schools should play matchmaker, guiding students toward specialties that are likely to endure. Big firm attorneys in some practice areas will continue to have a comparative advantage over low-cost attorneys, in-house lawyers and other professionals. One area is bet-the-company litigation, where high stakes justify high fees. Another is mergers and acquisitions and securities work, where, in addition to negotiating and drafting documents, lawyers usually quarterback the deal to closing. A third area is any practice that demands highly specialized legal and regulatory knowledge, like bankruptcy, tax and financial regulation. The knowledge required is intrinsically legal and cannot be easily moved offshore or outsourced to nonlawyers or contract attorneys.

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