For the 2013 academic year, law school admissions were headed for a 30-year low, a decline driven by student worries about rising tuition, debt load and unemployment after graduation. Potential law students increasingly understand that today it is a fool’s gamble to spend many thousands of dollars in the hope of getting a well-paying job at the end of three years, and as they pursue other careers the legal profession will shrink.
Demographics present another way to reduce the supply of lawyers. There are more than 1.2 million lawyers in the United States, at least half of them sole practitioners and some 400,000 poised to retire by the year 2020. To suggest that this latter group should be treated differently from any other group in the organized bar would create allegations of ageism and prohibited discrimination. However, a metric that is applicable to all lawyers, such as “competence in professional skills,” is safer ground. Of course, if this metric also achieves the basic goal of reducing the number of lawyers, by implying that older lawyers are less competent to serve clients, so much the better.
The problem with this metric is that it is never applied uniformly. If we look at new lawyers, those who have been admitted to practice for three years or less, there will undoubtedly be many who are not “competent,” despite the fact that they have passed the bar exam. What is the competence metric for “older” lawyers? Do they have to pass another bar exam? If yes why should age be the factor that determines whether they have to take a new examination? If not, what might it be? There is no examination at anywhere in the time spectrum of a lawyer’s career that requires such an examination.
It is the rare lawyer who has not thought at some point, “My opponent is not very good.” Often this is another way of saying, “My opponent doesn’t seem very competent.” This is impressionistic only, but to be valid it must be applied throughout the entire career life cycle.
It is not accurate to automatically assume that older lawyers are more careless, have too many distractions and make too many errors leading to discipline. Young lawyers are closer to the teaching of the rules of professional conduct than are the older lawyers. But, that does not assure that all younger lawyers are competent to offer the advice they're asked for ... and, with MCLE, older lawyers generally keep their skills up. Regardless of lawyers’ ages, the majority of the complaints against the profession relate to careless dealings with clients... Age is not a determining factor in such a scenario.
Most people will agree that there are too many lawyers, an oversupply. (Parenthetically, I disagree; it seems to me that there is a dislocation between the supply and the demand for legal services, a situation that the organized bar has never been able to reconcile with successfully.) But I digress.
Assuming, for the moment, that there is an oversupply of lawyers, why should we care? Would that not mean the fees for legal services would come down? Would it not be best to let the marketplace handle supply and demand?
But, If the Bar wants to reign in the supply, how could they? Of course, get rid of some of the lawyers. (Making admission to the organized bar is another way, longer term. Economics seem to be handling this quite nicely, thank you. Law school admissions are down by 10 to 15%. Applications hit a 30 year low. Potential law students understand that spending many thousands of dollars to take the gamble that they will not be able to get a well-paying job at the end of three years is a fool’s gamble.)
Economics, once again, helps us answer the question of how to reduce the supply. There are more than 1 million lawyers in the United States. Of this group, it has been estimated that at least one half of this group are sole practitioners. Another statistic suggests that at least 400,000 lawyers will retire by the year 2020.
If we look at this latter group, and suggest that we treat it any differently than any other group in the organized bar, we would be accused of ageism, and prohibited discrimination. However, if we come up with a metric that is applicable to all lawyers, such as “competence,” then we are safe. Of course, if this metric also achieves our basic goal of reducing the number of lawyers available to serve clients, so much the better.
But, this metric is never applied uniformly. If we look at new lawyers, those who have been admitted to practice for three years or less, I am sure we will find many who are not “competent,” despite the fact that they have passed the bar exam. How many times have "mature" lawyers said, mostly to themselves, that they were happy that they were not the client "back then," that they didn't know enough to be really competent to handle the matter they did .... that they learned "on the job."
What is the metric for “older” lawyers? Do they have to pass another bar exam? If yes why should age be the factor that determines whether they have to take a new examination? If not, what might it be? Nowhere in the time spectrum of a lawyer’s career is there a requirement for such an examination.
How many times have you, as an adversary, said to yourself my opponent is not very good? In fact, how many times have you said my opponent is not “competent?” Until the appropriate metric can be accepted and applied throughout the entire career life cycle, it seems to this writer that the real focus should be on meeting the needs of our clients who are not served or who are under-served, making sure that all lawyers, young and old alike, are “competent” and move away from even the appearance of ageism.
Nicole Black is an attorney in Rochester, New York, is the Director of Business Development at MyCase, a web-based law practice management platform, and is the ABA-published author of “Cloud Computing for Lawyers” and the co-author of “Social Media for Lawyers.”
There’s no doubt about it--21st century lawyers are on the move and are embracing mobile devices more than ever. In fact, according to the ABA’s 2013 Legal Technology Survey Report, the vast majority of lawyers have now gone mobile, in one form or another.
Not surprisingly, smart phones lead the way, with 91 percent of lawyers reporting that they used smartphones in their law practices, up from 89 percent 2012. Tablet use also increased at an impressive rate, with nearly half of all lawyers surveyed reporting that they used tablets in their law practices. According to the survey results, 48 percent of lawyers now use tablets, up from 33 percent in 2012.
The reason lawyers are going mobile? Because it offers them flexibility and the ability to practice law and manage their law firms no matter where they happen to be. So, whether it’s using a tablet to pull up a case in court or accessing client files using their smart phone while on vacation, mobile computing is making it easier than ever for lawyers to practice law on the go, 24/7.
But is this necessarily a good thing? Especially with the recent release of Google Glass and the expected release of smart watches, which offer the prospect of virtually erasing the barriers created by devices and making people the new interface, as described in this recent GigaOM blog post: “Today many of these automatic interactions are dependent on a user’s mobile device, but we will be able to remove even that degree of separation between the individual and their home in the future. Through a combination of machine learning and a growing ecosystem of sensors placed within every day objects, we envision an interface that truly feels natural and intuitive to users no matter their level of technology literacy.”
It’s an interesting concept, but is it a healthy one--especially for lawyers, a group that has one of the highest rates of depression, substance abuse and suicide in the United States? Does 24/7 connectivity make sense for the mental health of most lawyers?
Clearly, for lawyers, the next stage of mobile technologies may present difficulties not previously experienced. And for many lawyers, it will be a delicate balance of meeting client expectations of constant availability while maintaining their sanity. In order to maintain this balance, lawyers will need to carefully choose new technologies for use in their practices with the end goal of reducing, not increasing, the non-stop barrage of information.
For example, one of the best ways to do this is to empower your clients by expanding their access to information, making it easy for them to obtain the information that they need about their case, no matter when they need it. In other words, by using tools such as online client portals that are accessible using any Internet-enabled device, you can ensure that your clients can get the information that they are seeking without having to contact you.
Like it or not, the world is changing and lawyers--and their clients--are more mobile than ever. And while this newfound mobility offers an array of benefits, it also creates new problems. Fortunately, selective use of emerging and mobile technologies can help to curb the influx of data and reduce the noise, making it easier than ever for lawyers to reap the benefits of a mobile law practice while simultaneously maintaining their sanity.
Visiting ALM LegalTech conference today was eye popping in both its simplicity and complexity.
First, the simple: D. Casey Flaherty, corporate counsel at Kia Motors America, suggests that law firms don't need more software. They need to use their existing software more efficiently and effectively. What a concept. Reminds me of the scientists' suggesting that humans use only 10% or less of our mental capacity.
The difference between the two concepts is that inefficient use of existing technology increases the legal spend for clients. And only Corporate America can do what Mr. Flaherty did: subject his outside counsel to economic consequences when they are guilty. He recently reduced a law firm’s billing to Kia Motors by 40 hours because he detected they didn’t know how to use Word to print to a .pdf file and eliminate the scanning process which would have reduced associates time on his matters by the 40 hours. Multiply this scenario many times and you are talking about hundreds of thousands of dollars in lawyer billing. More on that in a later post.
Next, the complex: Owen Byrd of Lex Machina discussed the concept of Moneyball for Lawyers. He says that “Moneyball” applies data (any collection of facts) to analytics in order to understand trends and patterns that emerge from that data. This supplements legal research and reasoning with predictive analytics. This approach can help predict a party's behavior, likely outcome of a lawsuit and the results from a specific legal strategy or argument. The concept, emanating from Stanford studies, can be viewed merely as a new research tool. If so, it's rather expensive. It can also be viewed as a marketing tool by helping you refine your pitches for new legal work to prospective clients. In this case, the cost is insignificant when you attain one or more new clients. This is the future of the legal profession. Currently, Lex Machina and its approach can be utilized only by the larger organizations with big money at stake. But, the handwriting is on the wall.
Most important, these two divergent approaches to technology demonstrate the need to be proficient with current technology in order to satisfy rule 1.1 (definition of competence) and to run scared about the future if you fail to pay attention to the changes coming in the future. The bottom line is to serve clients well. Your awareness and proficiency with technology addresses that goal…and may provide a competitive advantage to some.
Are contract lawyers an expense or a fee item? This issue has been litigated before and, according to my reading, has been resolved in favor of the law firm. The law firm is entitled to engage contract or temporary lawyers for one price and charge the client a higher price. One rationale for this is that the firm can engage lawyers on a short term basis, without a long term commitment, to provide the work for the client that is necessary. When that job or assignment is completed, the law firm can sever the tie with the contract lawyer and retain a lower overhead. Everyone benefits: the lawyer who otherwise would not have been employed; the law firm that can take on additional work and its resulting benefits; and the client whose goals can be met more efficiently and timely.
The issue usually arises from a complaint by an insurance carrier who is responsible for payment of legal fees under a policy of insurance or a creditors’ committee that wants a larger share of available funds and finds the law firm(s) an easy target. Currently, the Citigroup class action legal fees are being challenged by a group called the Center for Class Action Fairness.
The allegations in this case go beyond the assertion that a law firm cannot charge more than it pays for legal talent. If this were the only issue, the challengers would have no standing; this issue has been resolved and it would be a major reversal of thought for the court to rule otherwise. But, the real issues are whether the engagement agreement mentioned anything about contract lawyers and, if so, what were the terms; what risk did the law firm accept when its fee was based on a contingency (was this a novel area of law or one in which plaintiffs had not been successful before); what was the expertise needed in the matter for which contract lawyers were engaged, and what was the expertise actually engaged; and were the fees charged “reasonable” under all the circumstances.
In this case, the total fees amount to less than 17% of the class action settlement. The court will have to decide whether this was a reasonable fee overall and/or whether each component of the fee requested reasonable. The added risk for any law firm taking on this type of case is that its fee is always reviewed on Monday morning ... the Monday morning quarterback always has a better perspective than does the game-day quarterback. While the large company client can protect itself by hiring the contract lawyers directly, though they could then hardly expect the law firm to oversee that portion of the work product. The client can further protect itself by objecting to paying the legal fee and litigating the fee. But, how does a law firm protect itself against the client (usually someone else speaking in the shoes of the client) so as to avoid an after-the-fact conflict?
In today’s Wall Street Journal, the writer suggests that high priced lawyers are for sale, that is, that clients are pushing back and demanding lower fees irrespective of the stated hourly rates of their lawyers. The reporter’s perspective is skewed only to the larger law firms, “Big Law.” Small firm and sole practitioners have always walked this tight rope between client acceptance and lawyers’ fees, but this doesn’t make news.
The battle between lawyer as vendor and client as purchaser has always existed. The “battle” or adversarial conflict just never received so much publicity as it does now ... And yes, some clients have become bolder as a result of the recent Depression (aka Great Recession).
Also, however, some lawyers will raise their purported rates knowing the financial officer of the corporate client will demand a discount. This way, the law firm receives the engagement, the General Counsel gets served and can protect the rights of the company, and the finance officer can assert he/she saved money for the company. A nice game.
A lawyer who was interviewed for the article suggests the real issue for all concerned: The client must believe he/she/it is receiving value for the fee paid. In other words, it’s the total cost of the legal service, not the rate per hour, that is significant. With more clients and attorneys beginning to speak this language, the real issue is coming into focus.
Life After Law, What Will You Do For the Next 6000 Days? My soon- to-be-released book is a guide to why aging baby boomer lawyers should be planning for their next career. The ABA has concluded that 400,000 lawyers will retire in the next 10 years. That is equivalent to the entire membership of the ABA, the largest volunteer organization in the world!
According to a different report, without reference to law, 10,000 people retire daily!
Look for a dramatic change in our culture as we seek to learn how to live longer, productive lives in different careers. Of course, the economy will also change as older folks become the dominant consumers in this country.
I have been getting more calls from lawyers wanting to retire, wanting to sell their law practices. As a result, I started writing a new book. I just finished Life After Law: What Will You Do With the Rest of Your Life? It is being edited now and will be available for sale in October.
As a result, I've been giving a lot of thought to the definition of Goodwill, the primary asset a lawyer has to sell. And though it is not consistent with the accounting profession's definition, I have come upon a new definition that I believe is more meaningful to the average lawyer, whether buying or selling:
Goodwill can be defined as legacy ... it’s your legacy that you’re passing along to others ... It’s your reputation, your phone number, your system and way of doing business, all the intangible elements that made you successful and provides you, the selling lawyer, with what to sell ... The better is your reputation, the more value your law practice will have.
Judge Lippman, Chief Judge of the New York Appeals Court, announced a pro bono requirement to gain admission to the New York Bar. Every new lawyer will have to prove their performance of 50 hours of pro bono practice before being admitted to the New York state bar. Mandatory pro bono is now a reality in New York.
He said, "If pro bono is a core value of our profession, and it is—and if we aspire for all practicing attorneys to devote a meaningful portion of their time to public service, and they should—these ideals ought to be instilled from the start, when one first aspires to be a member of the profession."
His first error of judgement, in my opinion, is to conclude that pro bono is a "core value" of the legal profession. While many lawyers "give" many hours freely of their time and expertise, it is not the essence or "core value" of the legal profession. This has been substantiated many times over when bar associations call on their members to provide free services for low and moderate income people. Many do step up to the plate. But, not all. Thus, it's obviously not a core value of the profession.
He then said that "We think that if you want that privilege, that honor of practicing law in the state of New York...then you are going to have to demonstrate that you believe in our values." He is really saying that if you want to practice law in NY, you better meet my values. Interesting that he says that practicing law is a privilege, not a right. Seems as though we're taking a test to get our driving license. Driving a car is a privilege and in order to get you on the streets, you need certain requirements. I guess Judge Lippman equates getting a law license with a driver's license.
Why does this new requirement apply only to new lawyers? Why doesn't this requirement apply to all lawyers in NY, even those who have been practicing for a few years? Judge Lippman's excuse for this discriminatory practice is that existing lawyers' practices are very diverse and some lawyers already are having difficulty earning enough money to put food on the table. Thus, they should be excused from this requirement. The real reason is that the Judge would have a rebellion on his hands if he tried to spread the requirement to all present lawyers in the state.
I've talked about internships for lawyers. We've discussed articling in Canada. And now I find out that the State of Georgia has a mandatory mentoring program for brand new lawyers. Perhaps we're not so far away from the internship process. On the other hand, since Georgia has been working this path for quite a few years and others have yet to follow, perhaps it's still a pipe dream that even the current recession won't make happen at either the law school or Bar level. It may still take the combination of law firms and client demands to create an effective post-law school education program for learning how to become a lawyer.
I had the pleasure of keynoting a recent conference sponsored by LexisNexis. During a panel discussion among practitioners, technology consultant and myself, the topic of the cost of new technology was discussed. One of the suggestions I made was that the successful law firm of the future will use technology to create and enhance its effort at knowledge management. The firm that is able to retrieve its pre-existing knowledge and use it again will be more efficient, reduce its costs and therefore provide excellent results for clients at a lower price.
Then, the question arises: Who owns the knowledge, who owns the forms, the precedent knowledge? Does the client who paid for it own it? Does the law firm own it? Or does the lawyer who created it own it? This becomes more important in an age of greater lateral movement.
Some clients have as a condition of engagement that they (the client) own the intellectual property ... and that the law firm must share it with other law firms who handle the client's affairs (e.g., product liability litigation) in other parts of the country.
Do you have a firm policy on this? What do you do concerning your intellectual property when a lawyer leaves your firm? Is your policy different when the lawyer is a partner as contrasted to when the lawyer is an associate?
For the second day in a row, the WSJ ragged on lawyers. It's front page headline says "How to Surgically Remove Lawyers From Hospitals" .... Without reading more than the front page headline, one would think that lawyers are a problem for hospitals and need to be removed ... and here's how to do it.
But, when you turn to the Personal Journal section of the paper, the article talks about hospitals' negligence and the fact that many deaths and serious injuries/illnesses are caused by the hospitals and their staffs after the patients enter for other maladies than that which resulted in death.
The writer states that some hospitals are admitting their negligence and approaching the patients and their families with apologies and financial offerings that make sense. Under such circumstances, of course, the patients don't need to work with lawyers ... and that's one way of keeping lawyers out of the discussion. (There are other issues here from the perspective of the patient's protection; that's a subject for another time.)
The real reason for the lawyer is that the institution denies culpability and seeks to stonewall the injured party. What a novel idea -- actually talk to the injured party, admit responsibility and seek to negotiate/mediate a solution acceptable to all parties.
That, however, is not the tone of the headline, nor the attitude of the newspaper. Too bad. Truth should be the standard, not paper sales. I should admit that the headline is not false, just conveys the wrong impression of the article's content.