EDUCATION BLOG

This article from the Daily Business Review (unfortunately, you need a password to read it online) contains some of the more vocal ciriticism appearing in the press recently, from the lips of corporate in-house counsel who are fed up with emergent trends in the Big Law firms they hire.  The gist is straightforward and should be familiar to anyone who has worked for or with large law firms in the past few years.  Basically, the salaries of associate attorneys in the major markets are skyrocketing (to give an idea, they are now at $160,000 for first-year lawyers straight out of law school, as compared to $125,000 when I started practice a few years ago in Los Angeles).  In-house counsel find this alarming as they fear the inflated salaries will be passed on to clients -- not only in form of higher billing rates, but through higher incentives for associates to "puff up" their hours given that they will be expected to bill more and more to justify the higher salaries paid to them.  And there is a growing outrage that first-year lawyers -- who know little to nothing about the practice of law -- are even staffed on cases to begin with, leading in-house counsel to demand that the teams of lawyers assigned to their cases not include the greenest associates.  The bottom line: as associate salaries shoot through the roof, companies are becoming even more sick and tired of bankrolling the education of those rookie lawyers who work on their cases. 

Is this surprising in any way? In what other servce industry could companies expect their clients to fund the training and development of their newest hires in such an in-your-face manner and not risk total and immediate self-annihilation? While I find the strongly worded criticisms encouraging to the extent that firms like mine (a litigation boutique with low overhead and zero fat-salaried associates) are best positioned to capture business from cost-conscious in-house counsel, I am also alarmed when I think that future law firm hires are going to be shut out of opportunites to learn and grow as lawyers owing to the rapidly changing economics of the legal profession.  How did we get here and what can be done? Here are some quick thoughts:

1.   Take a hard look at re-designing legal education.  It has been no secret for a long time that law schools -- from the lowest to highest ranking -- teach absolutely nothing about the practice of law.  Instead, the elite law schools serve as breeding grounds for law professors by offering largely theoretical courses, while the lower ranked schools mainly prepare their students to pass the bar exam.  Neither approach is efficient for clients who need young lawyers to understand the mechanics of law practice, although the legal education system was certainly adequate in the bygone era when the big firms competed little with one another and lawyers comprised a big old boys' network.  One way to induce change in legal education would be for the corporate clients to intervene directly by endowing chairs and funding practice-based curricula, thereby counteracting the de facto and entrenched subsidization of legal education by large law firms, which is done through the salaries paid to "summer associates" (who are typically first-and second year law students) that are then funneled back to law schools as tuition.  Indeed, why on earth shouldn't legal education parallel medical education, with the latter's central practical component?

2.    Maybe Big Law Firms should fish or cut bait when it comes to associate development.  On the other hand, if the large firms wish to continue in their role as the primary training camps for young lawyers, then perhaps they should do so in a way that doesn't shove that role down the throats of their clients.  One option would be to make the first six months or so of an associate's life billable-hour free, and then plug the associate into a series of development opportunities -- e.g., attending depositions and hearings, closings, client presentations , etc.-- without cost to clients.  Of course, the law firms would be faced with an even higher cost-of-investment-per-associate on the front end (as the already high cost of development couldn't be recouped by billing out their new associates), but isn't that still preferable to the great risk of alienating clients on the back end by incentivizing those same associates to puff up their hours? And don't overlook the additional benefit that associate satisfaction and retention rates (which are presently miserably low across firms) would surely increase measurably if they didn't feel the pressure to bill in their first six months on the job.

 3.   It's all about management and innovation, so teach lawyers to be better business people!  Ultimately, the recent outrage from in-house lawyers is a function of larger issues endemic to the legal profession, and which have been so for a long time.  The legal profession is notoriously resistant to innovation in the area of its own business practices, and this is especially true when you look at the large firms which have historically dominated the market.  In my experience, creative and bold managerial types -- i.e., those people who could drive a revolution in law practice management -- simply are repulsed by the idea of becoming lawyers in the first place, given the legal industry's  clubby, crusty, and conservative reputation.  What needs to happen for law firms to become more innovative -- and to keep up with their clients' needs -- is for the lawyers who work there to think of themselves as business people.  And one thought for churning out better bsuiness-minded lawyers is to design integrated JD/MBA programs offered by law schools and business schools which don't just slap two different degrees together (as JD/MBA programs currently do), but actively synthesize them by teaching the business of law, and management courses tailored toward lawyers in this day and age.  Another idea: mid-career, one-year  executive MBA programs for attorneys to teach them the latest and cutting edge in management trends and techniques.