Georgetown Center for the Study of the Legal Profession, Report on the State of the Legal Market:
Introduction – Time to Burn the Ships?
As we enter 2013, the legal market continues in the fifth year of an unprecedented
economic downturn that began in the third quarter of 2008.
At this point, it is becoming increasingly apparent that the market for legal
services in the United States and throughout the world has changed in
fundamental ways and that, even as we work our way out of the economic
doldrums, the practice of law going forward is likely to be starkly different
than in the pre-2008 period. The challenge for lawyers and law firms is to
understand the ways in which the legal market has shifted and to adjust
their own strategies, expectations, and ways of working to conform to the
new market realities. While there is certainly evidence that some firms
and lawyers have begun to make these adjustments, many others seem
to be in denial, believing (or perhaps hoping) that the world will go "back
to normal" as soon as demand for legal services begins to grow again.
Legend has it that in 1519, when he and his cohort of some 500 soldiers
and 100 sailors landed on the shores of the Yucatan intent on conquering
the large and powerful Aztec empire, Spanish conquistador Hernando
Cortez promptly ordered his men to "burn the ships." Cortez knew that,
unless more tempting alternatives were removed, it would be difficult to
motivate his men to take on an empire with a large army that had been in
power for more than six centuries. Hence, his bold and decisive order.
The legal market today is an increasingly difficult and challenging environment,
one that calls for clear thinking, strategic focus, and flexibility in
addressing rapidly changing realities. To an unfortunate extent, however,
many lawyers and law firms seem stuck in old models – traditional ways
of thinking about law firm economics and structure, legal work processes,
talent management, and client relationships – that are no longer well
suited to the market environment in which they compete. Perhaps it's
time for us, like Cortez, to burn the ships – to force ourselves to think
outside our traditional models and, however uncomfortable it might be, to
imagine new and creative ways to deliver legal services more efficiently
and build more sustainable models of law firm practice.
Deborah Jones Merrit (Ohio State), Inside Report:
Law firms do find one bright spot in today's legal market: it is the
oversupply of lawyers. The Georgetown report recognizes this quite
candidly: "While excess capacity in the market is certainly not good
news for young lawyers or, for that matter, law schools, it provides an
environment in which law firms should have the flexibility to redesign
their staffing models to respond to client demands. By embracing
alternative approaches to staffing--including increased use of staff
attorneys and non-partner track associates, contract lawyers, and
part-time attorneys--firms can create more efficient and cost effective
ways to deliver legal services." (p. 17)
It's hard to find a more brutal statement of market reality than that
one: the glut of lawyers created by law schools is allowing law firms to
hire those graduates on increasingly contingent and unattractive terms.
These new jobs are not designed to train new lawyers in skills
they can take to other job sites. Once you have worked two years as a
back-office document reviewer, what professional skills do you
have--other than reviewing documents? These jobs will serve the economic
interest of law firms.
And before any legal educators get all huffy about how law firms should
recognize their professional obligations rather than simply operating as
businesses: How many law faculty are voluntarily taking pay cuts to
reduce tuition? How many are contributing substantial amounts to
loan-repayment assistance plans? How many are voluntarily changing what
they teach, or the time they devote to research, in order to lower the
cost of legal education? How many devote 40 hours a year (one week) to
serving low-income clients directly? How many spend that time training
or supervising other lawyers in providing that service?
There are some professors who do these things, just as there are some
law firm partners who forego income to mentor new lawyers. But there
aren't very many. Law schools, just like law firms, have become
full-bore businesses. The controlling members of these businesses,
equity partners and tenured professors, serve their own interests and
maximize their take-home pay.
In a market system, there's nothing wrong with businesses maximizing
profit. The problem, with both law firms and law schools, is that we
clothe ourselves in the rhetoric and privileges of a profession while pursuing market goals. As clients have gained the information they need to assert their interests--and new businesses have emerged to serve those interests--it's our students and new lawyers who pay the price for our duplicity.