THE ULTIMATE LATERAL HIRE

Among 2011′s “Lateral Partner All-Stars,” Tony Angel’s symbolic importance seems unrivaled. As I write, I don’t know who will make The American Lawyer‘s annual February list. But when Angel became DLA Piper’s leader, his new firm became the definitive poster child for big law’s transformation. Celebrate at your peril.

Whither goest thou?

DLA Piper resulted from the combination of several large firms comprised of once-independent enterprises: DLA’s three U.K. components were Dibb Lupton Broomhead, Alsop Stevens, and Wilkinson Kimbers; Piper Rudnick’s predecessors included Baltimore-based Piper & Marbury, Chicago-based Rudnick & Wolfe, and San Diego-based Gray, Cary, Ware & Freidenrich.

According to its website, DLA Piper grew from 2700 lawyers in January 2005 to 4200 today. The attorneys it added during that period would comprise one of the 20 largest firms in the world — eclipsing Kirkland & Ellis, Weil Gotshal & Manges, and Gibson, Dunn & Crutcher.

But is it really a law firm? K&L Gates chairman Peter Kalis makes the telling point that, as a verein, it may be more like a confederation of different firms that share a common name, but not profit pools. Still, adding 1500 attorneys in six years makes any observer wonder about DLA Piper’s global partner conferences. The 2010 meeting took place in Orlando, Florida, home of Disney World. There’s a metaphor in there someplace.

Ascertaining shared values and visions

According to Am Law Daily, the whirlwind courtship between Angel and DLA Piper began with a May 2011 breakfast meeting that included Frank Burch and others on the leadership team. The idea of naming him global co-chair gained momentum as Angel lined up partner support from the firm’s 76 offices. On November 7, he got the top spot. How?

“He’s got great values and he believes in what we’re trying to do and he shares our view of what’s going on in the world,” said Burch, who now shares DLA Piper’s global chair with Tony Angel. “So, we didn’t hesitate for a second and worry about the fact that the guy was not in the firm.”

Didn’t hesitate for a second? Didn’t worry about the fact that the guy was not in the firm? Why not? When Burch said that Angel has “great values,” “believes in what we’re trying to do,” and “shares our view,” what did he mean?

DLA Piper’s press release offered a hint:

“Tony will work with the senior leadership on the refinement and execution of DLA Piper’s global strategy with a principal focus on improving financial performance and developing capability in key markets.”

Translation: Get bigger and make surviving equity partners richer.

Consultant Peter Zeughauser said that Angel is a hot property: “It’s hard to get a guy that talented. There just aren’t that many people out there who have done what he has done.”

Zeughauser was referring to Angel’s management of Linklaters from 1998 to 2007. When he left, it had a global presence and average partner profits of $2.4 million. Although DLA Piper’s 2010 average partner profits exceeded $1 million in 2010, Angel’s job is to take them even higher.

Ignored in the financial shorthand are questions no one asks:

– Most big firms prospered wildly during big law’s go-go years. Does the person at the top deserve all the credit? The partners who bring in clients, orchestrate deals, and win trials don’t think so.

– Conversely, according to Am Law‘s Global 100, by 2010 Linklater’s 2010 average profits per partner slipped to $1.8 million. Does anyone think that happened because Angel left three years earlier? Not likely.

– What gets sacrificed in the myopic quest for growth and short-term profits? That’s becoming clearer: things that aren’t easily quantified, including a sense of community and a culture that mentors home-grown talent from which a firm’s future leaders can emerge.

Rather than consider the heresy implicit in such questions, the spin zone focuses on what legal headhunter Jack Zaremski called a “brave move” that “might very well pay off.”

Pay off, indeed. In the latest Am Law Mid-level Associates Survey, DLA Piper ranked 99th out of 126 firms. In reviewing their shared values and vision, did Angel and his new DLA Piper partners discuss the rewards that might come with addressing the firm’s attorney morale problems?

Probably not. After all, Linklaters ranked 108th.

THE LAW SCHOOL QUANDARY

Law school deans are getting conflicting advice. Let’s sort it out.

“Provide more practical training” has become the latest mantra. At the recent annual meeting of the Association of American Law Schools, Susan Hackett, a legal consultant and former general counsel of the Association of Corporate Counsel, argued for a year of executive-style classes covering business topics and skills. Here’s a better suggestion: students seeking a business school education should attend business school.

Meanwhile, according to the National Law Journal, Peter Kalis, chairman of K&L Gates, said that some current law school criticism is misplaced: “I believe law schools should concentrate on the education of law students from the perspective of acculturating them in the rule of law. Law students should spend that time being immersed in and becoming familiar with common law subjects.” More fee simple, anyone?

Finally, a Northwestern University law professor and a first-year Kirkland & Ellis associate offered a dramatic solution to the shortage of attorneys. You probably didn’t know there was one. Although the U.S. already leads the world in lawyers per capita, the authors concluded that allowing colleges to offer undergraduate law programs would: 1) reduce law school tuition to zero (for such students); 2) produce more lawyers; 3) cause some attorneys to charge lower fees; and 4) assure broader access to legal services for lower- and middle-income Americans. While not prohibiting law schools from offering today’s $150,000 J.D. degree programs, the plan would put most law schools out of business.

Where to begin? One reason the United States has too many lawyers is that law school has long been a default solution for college students. But when youthful expectations clash with the harsh reality that most attorneys endure, career dissatisfaction results. Allowing poorly informed undergraduates to pursue a law degree right out of high school would be exponentially worse — for them and the profession. (Commenters to the on-line version of the article destroyed the authors’ cavalier comparison of their scheme to the UK system. If you’re wondering why The Wall Street Journal editorial board published such a flawed piece, you’re not alone.)

What do students think?

At the same time, today’s law students like the education they’re getting. According to the recently released 2011 Law School Survey of Student Engagement of 33,000 current students at 95 law schools in the U.S. and Canada, 83 percent of respondents said that their experience in law school was “good” or “excellent.” Eighty percent said they definitely or probably would attend the same law school if they could start over again. Maybe most of these students will join the ranks of unhappy scambloggers when they can’t get jobs to repay their loans, but for the moment they’re satisfied.

But the same study revealed that 40 percent of students felt that their legal education had so far contributed only some or very little to their acquisition of job- or work-related knowledge and skills. In other words, some like their law school experience, even if it’s not equipping them in a practical way for positions they hope to obtain.

A final point may resolve this apparent contradiction. When students seek their first law jobs, curriculum makes little difference. Candid big firm interviewers admit that, except insofar as a particular course might give a recruit something interesting to discuss in an interview, subject matter is irrelevant. In fact, dramatic curriculum innovation is underway at many schools and, however worthwhile it otherwise may be, affected students haven’t become more desirable to prospective employers:

“There’s no employer out there right now — not law firms, not the Department of Justice, not the ACLU — that are seeking out these graduates,” Indiana University Maurer School of Law Professor William Henderson observed at the AALS meeting. “These programs haven’t affected hiring patterns. It’s still all sorted out with credentials. It’s based on the brand of the law school.”

If the vast majority of students are happy with the law school experience and changing it won’t improve their job prospects, perhaps the legal academy and its critics should consider focusing attention elsewhere. Here’s an idea: Provide prospective law students better information about the real life that most lawyers lead. For too many of them, it comes as an unpleasant surprise. Forewarned is forearmed.

UNFORTUNATE COMMENT AWARD

Today’s “Unfortunate Comment Award” winner is ABA President William (“Bill”) Robinson III, who thinks he has found those responsible for the glut of unemployed, debt-ridden young lawyers: the lawyers themselves.

“It’s inconceivable to me that someone with a college education, or a graduate-level education, would not know before deciding to go to law school that the economy has declined over the last several years and that the job market out there is not as opportune as it might have been five, six, seven, eight years ago,” he told Reuters during a January 4 interview.

Which year we talkin’ ’bout, Willis?

Recent graduates made the decision to attend law school in the mid-2000s, when the economy was booming. Even most students now in their third year decided to apply by spring 2008 — before the crash — when they registered for the LSAT. Some of those current 3-Ls were undergraduates in the first-ever offering of a course on the legal profession that I still teach at Northwestern. What were they thinking? I’ll tell you.

I’ve written that colleges and law schools still make little effort to bridge a pervasive expectations-reality gap. Anyone investigating law schools in early 2008 saw slick promotional materials that reinforced the pervasive media image of a glamorous legal career.

Jobs? No problem. Prospective students read that for all recent graduates of all law schools, the overall average employment rate was 93 percent. They had no reason to assume that schools self-reported misleading statistics to the ABA, NALP, and the all-powerful U.S. News ranking machine.

But unlike most of their law school-bound peers, my students scrutinized the flawed U.S. News approach. Among other things, they discovered that employment rates based on the ABA’s annual law school questionnaire were cruel jokes. That questionnaire allowed deans to report graduates as employed, even if they were flipping burgers or working for faculty members as temporary research assistants.

Law school websites followed that lead because the U.S. News rankings methodology penalized greater transparency and candor. In his Reuters interview, Robinson suggested that problematic employment statistics afflicted “no more than four” out of 200 accredited institutions, but he’s just plain wrong. Like their prospective students, most deans still obsess over U.S. News rankings as essential elements of their business models.

The beat goes on

With the ABA’s assistance, such law school deception continues today. Only last month — December 2011 — did the Section on Legal Education and Admission to the Bar finally approve changes in collecting and publishing law graduate placement data: Full- or part-time jobs? Bar passage required? Law school-funded? Some might consider that information relevant to a prospective law student trying to make an informed decision. Until this year, the ABA didn’t. The U.S. News rankings guru, Robert Morse, deferred to the ABA.

The ABA is accelerating the new reporting process so that “the placement data for the class of 2011 will be published during the summer of 2012, not the summer of 2013.” That’s right, even now, a pre-law student looking at ABA-sanctioned employment information won’t find the whole ugly truth. (Notable exceptions include the University of Chicago and Yale.) Consequently, any law school still looks like a decent investment of time and money, but as Professor William Henderson and Rachel Zahorsky note in the January 2012 issue of the ABA Journal, it often isn’t.

Students haven’t been blind to the economy. But bragging about 90+ percent employment rates didn’t (and doesn’t) deter prospective lawyers. Quite the contrary. Law school has long been the last bastion of the liberal arts major who can’t decide what’s next. The promise of a near-certain job in tough times makes that default solution more appealing.

Even the relatively few undergraduates (including the undergraduates in my class) paying close attention to big firm layoffs in 2009 were hopeful. They thought that by the time they came out of law school, the economy and the market for attorneys would improve. So did many smart, informed people. Youthful optimism isn’t a sin.

Which takes me to ABA President Robinson’s most telling comment in the Reuters interview: “We’re not talking about kids who are making these decisions.”

Perhaps we’re not talking about his 20-something offspring, but they’re somebody’s kids. The ABA and most law school deans owed them a better shake than they’ve received.

It’s ironic and unfortunate: one of the most visible spokesmen in a noble profession blames the victims.

TROUBLE IN TEXAS

Last month, University of Texas President Bill Powers asked his law school dean, Larry Sager, to resign early — months ahead of his originally planned departure at the end of the academic year. According to the Texas Tribune, Sager’s relationship with the faculty “had become so strained that he was no longer able to serve effectively.” One source of discord was faculty compensation.

The story became more interesting with news that the law school’s foundation – a private non-profit group run by alums and distinguished attorneys — had given Sager a $500,000 “forgivable loan” in 2009. It got juicier when Powers said, “I don’t remember ever being told about the loan to Dean Sager, and that’s the sort of thing I would remember.”

He said — he said

Sager counters with his “clear memory” that Powers knew about the loan, but then distances himself from the foundation’s action: “Whatever else is true about the loan, the decision was made by the president of the foundation, the executive committee of the foundation and the trustees of the foundation as a whole. I would not and could not have dictated this outcome.”

So who determines compensation at the University of Texas School of Law?

The Texas Tribune notes that one of the foundation’s top donor-trustees, Steve Susman (an outstanding attorney) explained the foundation’s laudable purpose:

“If the law school is going to remain just a state law school supported by state money, I think it’s going to drop to being a very mediocre law school. The reason this law school has always been a great law school is because it has always gone to its alumni and said, ‘We need you in it.’”

But that defense is irrelevant to the current controversy. Many colleges and universities have alumni organizations that raise money. Sometimes they solicit for particular causes or programs. No problem. But the UT foundation’s funds apparently became part of a dean’s compensation package and the university’s president claims not to know how or why.

Who’s in charge?

In a lengthy letter to the faculty (downloadable at the Texas Tribune article link), Sager explains that, after becoming dean in 2006, he tried to raise UT’s stature by luring talent from other schools while resisting raids on UT’s. Without naming the foundation, he says that “loan arrangements have come from monies that have been raised and expressly endowed for academic excellence.” He also notes that he “raised the bulk of these funds – which total more than $10 million — for exactly the purpose of recruiting and retaining faculty.”

From there, things get curioser and curioser. Sager’s letter describes university-wide austerity budgets that constrained law school salaries. Meanwhile, according to the school’s response to an Open Records Request, the $500,000 Sager received in May 2009 was by far the biggest of 22 loans made between May 15, 2006 and September 15, 2011. His letter doesn’t mention it.

President Powers says he didn’t know anything about Sager’s loan. Sager says that Powers knew and the loan was recognition for a job well-done, but his reward was a “foundation decision.”

It’s a Texas-sized mess. From the Texas Tribune:

“The day after Sager’s resignation, UT Chancellor Francisco Cigarroa issued a statement calling for a review of how funds flow to the Law School from the Foundation, how these decisions are made,’ in order to ‘enhance processes, procedures and controls for those transactions in the future.’ Cigarroa said the review’s findings would help establish ‘clear and transparent guidelines’ for all UT institutions and affiliated foundations.”

Before rejoicing at this hint of leadership from above, read on:

“A spokesman for the UT System said that while the chancellor has no direct authority over faculty compensation at the law school, he wants to make sure everything is being done in an appropriate fashion.” Atop the UT System sits a Board of Regents, which the governor appoints and the state senate confirms.

All of this leads to two questions: First, who decides whether things are “being done in an appropriate fashion” and, second, who’s responsible for changing things that aren’t?

After Penn State, university trustees and regents everywhere should be pondering those questions. The answers are important — and they’re in the mirror.