Monthly Archives: June 2010

VACATION? WHAT’S THAT?

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While dining out recently, my wife and I noticed a young couple at a nearby table. Their respective BlackBerrys mesmerized them; they rarely looked up or at each other. Even the arrival of entrees barely interrupted technological trances. During the hour-and-a-half we were there, they spoke only a handful of sentences.

According to a recent front page NY Times article, there’s a scientific explanation for such unsociable behavior. Unfortunately, the report filled two interior pages of the paper, which meant that it wasn’t likely to sustain the attention of those most needing its insights. Yes, I’m looking at you, my fellow lawyers, but you’re not the only culprits.

Young adults face a special challenge. If BlackBerrys and text-messaging feel familiar to you millennials, could it be related to the fact that you had Gameboys as kids?

Here’s a summary of “Hooked on Gadgets, and Paying a Mental Price”:

1. Technology has reduced the need for direct human interaction. That produces important efficiencies, but it also inflicts collateral damage. For example, what was once considered family time has become parallel play on handheld devices. That’s what was happening with the couple seated near us at the restaurant. At another nearby table, a teenager and his younger sibling likewise lost themselves in their gadgets while preoccupied parents did likewise.

2. Multi-tasking is a myth for all but 3% of the population. The vast majority of us can do only one thing at a time reasonably well. Don’t blame me; that’s how the human mind operates.

3. When you try to multi-task, you become less efficient at juggling problems.

4. Multi-taskers are more sensitive to incoming information and, therefore, more easily distracted. But brains attempt to adapt. That can create problems, especially when the urge to remain plugged in assumes the attributes of an addiction. “The scary part,” notes Stanford professor of communications Clifford Nass, “is they can’t shut off their multi-tasking tendencies when they’re not multi-tasking.” Once the mind becomes attention deficit disordered (ADD), it gets bored more easily.

5. According to a recent poll, 30 percent of those under age 45 thought that cellphones, smart phones, and personal computers made it harder for them to focus.

All of this adds up to more stress — especially for lawyers and other professionals. So why do it? When economic historians revisit the stunning productivity gains of the 1990s and early 2000s, one big chunk will turn out to have been illusory. Specifically, technology facilitated the conversion of leisure time into working hours.

The legal profession epitomizes the phenomenon. In biglaw, productivity has become synonymous with billable hours, period. Don’t take my word for it. Here’s what legal consultant Hildebrandt Baker Robbins said in its 2010 Client Advisory to our profession:

“The high point of law firm productivity was in the late 1990’s, when average annual billable hours for associates in many firms were hitting 2,300 to 2,500.”

In other words, the billable hours imperative destroyed the wall separating work from everything else. Especially in large firms charging ever-increasing rates, clients understandably expected their attorneys to be on-call — 24/7.  As client-billed time became a key metric for evaluating talent, senior partners demanded bigger  sacrifices all the way down the food chain. (“Keep your hours up,” they urged — and still do.)

Laptops, cellphones, and BlackBerrys have been aiders and abettors. After all, who can credibly claim to have been unavailable for any longer than it takes to visit the bathroom?

So the next time you tell yourself that you’re taking time off, spend a moment contemplating what that really means. Meanwhile, if you’re seeking my insights over the upcoming long holiday weekend, perhaps you’ll consider one of my books.

They’ll have to suffice because this blog will be idle until July 9. I’m taking an old-fashioned vacation: no computer; no BlackBerry; no cellphone. (Well, okay, I’ll take my cellphone so other family members can reach me in case of emergency; no one else has the number.) Sounds just like your vacations, right?

WHO’S LAZY?

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My new novel, The Partnership, has led to some interesting conversations with other lawyers, especially biglaw partners.(http://www.amazon.com/Partnership-Novel-Steven-J-Harper/dp/0984369104/ref=sr_1_1?ie=UTF8&s=books&qid=1273000077&sr=1-1) 

“Here’s the problem with young associates today: they’re lazy,” barked a middle-aged man at a recent dinner party that I attended. Soon thereafter, he  revealed his occupation: partner in an Am Law 100 firm.

“They feel entitled. They want to make the big bucks, but they don’t want to put in the hours,” he continued indignantly.

Biglaw partners say that a lot. Many regard themselves as special in ways that few young people today ever can be. It’s a form of magical thinking that rationalizes hubris, bad behavior, and arbitrary decisions.

“It’s more complicated,” I suggested after confessing that I’d recently retired after 30 years in a big firm that he respected. “For the last three years, I’ve taught an undergraduate seminar that has given me a different perspective. Ultimately, my students inspired me to write my latest book.”

“How so?” he asked.

“As you know, law school has long been the last bastion of liberal arts majors who didn’t know what to do next. Once they got there, the pressure to get a high-paying job at a big firm began. But most students heading that way had no idea what their lives at such places would be like. When reality struck, many didn’t like it.”

He nodded.

“That’s one reason lawyers are among the most dissatisfied workers in our society. It’s also why, before the Great Recession, the five-year associate attrition rate from big firms exceeded 80%.”

“I didn’t realize it was that high,” he interjected.

“Contributing to all of this is the business model  that has overtaken most large firms over the past 20 years,” I continued. “It requires associate and non-equity partner attrition to increase leverage ratios and enhance equity partner profits. Being a good lawyer doesn’t mean the firm will have room for you as an equity partner. The resulting behaviors have dramatically changed the culture of most big firms.”

“You’re right,” he said as he inadvertently moved to his own unhappy plight. “People don’t understand what it means to go from 1,600 to 1,800 to 2,000 billable hours a year. Once you become a partner, it’s even harder. You can’t bill all of the time you spend on client development, but those hours are just another form of work.”

“We agree,” I suggested. “The job turns out to be much different from what most undergraduates expect, insofar as they have any expectations at all. In fact, even as an equity partner, your firm’s increased billable hour requirements have changed your job while you held it, right?”

“True,” he admitted.

“So you’re a victim of the MBA mentality of misguided metrics, too. When reality clashes with young attorneys’ idealized expectations, you have a prescription for psychological disaster. Factor in a business model that myopically focuses on a few metrics — billings, billable hours, and leverage — and look at the result.”

The biglaw partner then revealed his secret: “My son is thinking about going to law school. I told him to stay away from big firms.”

“You’re not alone,” I assured him. “The most recent ABA study shows that 60% of attorneys practicing 10 years or more advise young people against a legal career. As a group, biglaw attorneys are the most  dissatisfied; public sector lawyers are happier.”

The senior partner nodded. Long ago, he confessed, his career began in government.

“So we’re back where you started this conversation,” I suggested, “– associate motivation.”

“How so?”

“When an entering class of, say, 50 new associates figures out that only 10 of them will be around five years later and maybe two or three will eventually become equity partners some unknown number of years after that, how does it affect their behavior? How would it affect yours?”

“Partners would say I was lazy,” he laughed. “I think I’m going to enjoy your new book. I’ll get a copy for my son, too.”

OTHERWISE OCCUPIED FOR A TIME

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My next post won’t appear for several days because I’m busy preparing for two events.

On Saturday, June 19 at 11:30 am, I’ll be delivering the Convocation Address to the Northwestern University Weinberg College of Arts & Sciences graduating class of 2010. Anyone interested can join the other 10,000 people in attendance at Welsh-Ryan Arena in Evanston, IL. No ticket required.

But you don’t have to be there to see it. The event will also be streaming online at http://www.wcas.northwestern.edu/convocation/. The topic of my ten-minute speech is “Gems from the Diamond.” After I finish, 1,000 graduates will receive their diplomas individually; you probably won’t mind missing that part.

Then, on Monday, June 21 at 7:00 pm, I’ll discuss and sign my new novel, The Partnership, at The Book Stall in Winnetka, IL (811 Elm Street). (http://www.amazon.com/Partnership-Novel-Steven-J-Harper/dp/0984369104/ref=sr_1_1?ie=UTF8&s=books&qid=1273000077&sr=1-1)

So perhaps you’ll see me before you read whatever I have to say next.

FOR BIGLAW SUMMER ASSOCIATES ONLY…

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You’re thrilled, and understandably so.

In an impossible job market, you came up a winner. The summer associate offer rate for all firms dropped to its lowest level since NALP started gathering such statistics 17 years ago. But you worked hard, got good grades, and listened to tips from hiring partners describing what they wanted in a new lawyer.

You scored big. In compensation, it’s a summer job like none you’ve ever had. Your most pressing concern is whether there will be a repeat of last year’s dip in the full-time job offer rate for summer associates — 69% compared to 90% in 2008. So now you’re heeding advice that ranges from proper attitude to correct attire. At least there is some encouraging summer associate etiquette news. According to one biglaw hiring partner, “indiscretion happens with alcohol, but people understand that. You usually have to knock a partner out cold for it to be a career-ending event.”  Whew! That’s a relief.

Anticipating a favorable next step, you hope that your full-time job offer at the end of the summer is real. You don’t want to wind up like the more than 60% who planned to start their careers at large law firms immediately upon graduation this year, only to be deferred into 2011 and 2012. You can’t bear to think about some of your predecessors who received offers of full-time employment after their successful 2008 and 2009 summers, only to see them revoked outright a few months later.

You’re focused on making sure the firm likes you. There’s no time to consider other things — including whether you like the firm.

Here’s a suggestion: think about those other things now, even if only briefly.

At a recent Cubs game, I was talking with a fellow biglaw refugee. He’d practiced in a large law firm — not mine — for more than 25 years before retiring two years ago.

“What questions should today’s biglaw summer associates ask?” I began.

“It depends on what they want,” he suggested. “They probably fall into one of two categories. The first group consists of those wanting good training, needing a decent salary to pay off their student loans, and planning to do something else when that debt is gone. A second group wants to make a career at a big firm; they think they’re in for the long haul.”

“OK, so what should someone in the first group investigate?”

“That’s easy,” my friend responded. “Mentoring. How is the training? Will they have opportunities to develop skills that make them better lawyers?”

“How about the second group — the ones who think they want a large law firm career?”

“For them, it boils down to a simple question: who among the equity partners has a life that they’d want? If they can’t identify such a person, that’s a big problem. If they can, then they have to dig deeper.”

“Such as,” I pressed.

“Such as, how did the senior attorney do it? Is he or she an oddity? Did the partner succeed under a biglaw model that no longer exists? Most large firms don’t resemble what you and I joined 30 years ago. Your new book says it all.”

“And to get at that issue,” I added, “they should search for answers to these questions:

1. Excluding laterals, how many new equity partners did the firm make this year?

2. How many years did it take them to get there?

3. What was the size of their original associate class?

4. What happened to everyone else?

If the chances of capturing the brass ring are about the same as winning the lottery, at least they know the ground rules. The answers will reveal the culture and working environment of the place.”

“Yep,” he said. “And whether it’s conducive to a happy life. Your new book covers that one, too.”

But some aspects of life seem destined to remain unsatisfying; an hour later, the Cubs lost — again.

BABY BOOMERS STRIKE AGAIN

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Getting old is tough. But not nearly as tough as being young these days.

Recently, the National Law Journal reported that an Am Law  top 20 firm adopted a new policy allowing partners two addtional years before they must “begin giving business to younger colleagues.” Instead of 65, they’ll now have to start that process at 67. (http://www.law.com/jsp/article.jsp?id=1202458271311)

Meanwhile, a prominent 63-year-old white-collar defense attorney left his big firm of 16 years to avoid its mandatory retirement age (65). He declined his old firm’s offer of a two-year exemption that would have given him until 67. (http://legaltimes.typepad.com/blt/2010/05/mark-tuohey-leaves-vinson-elkins-for-brown-rudnick-cites-retirement-policy.html)

And the June ABA Journal includes the following admonition from the organization’s president:

“In August 2007, the ABA adopted a policy rejecting mandatory age-based retirement policies. The recommendation urging this advance is worth considering and adoption by all legal employers.”

Yes, she’s a 60-something baby boomer in a big firm, too.

What’s going on? Forget lip-service paid to the old age-discrimination argument against forced departure of equity partners. That sword of Damocles has floated over the profession forever, yet somehow current big firm leaders replaced their predecessors.

So why the big outcry now? The current chorus reflects an unintended consequence of a flawed biglaw business model: resistance to intergenerational transition. But extending check-out time is a bad move for the firm that does it, the younger attorneys working there, and aging baby boomers unwilling to contemplate life after the law.

Aging rainmakers have books of business that make them indispensable to many large  firms. Why? Throughout biglaw, simplistic metrics (billings, billable hours, and leverage) have determined individual partners’ annual compensation with an eye toward maximizing short-term average profits-per-partner that appear in Am Law‘s annual rankings.

It’s become bad long-term news for the firm. In such a culture, partners have every incentive to retain client responsibilities and none to mentor proteges or promote intergenerational transition. As they age, the old-timers hoard their marbles and threaten to take them elsewhere. Does that sound like a prescription for long-term institutional stability?

What about younger lawyers hoping to inherit clients? Many will find themselves in the position of the wealthy parents’ child awaiting a large bequest. By the time it comes, the kid will be in his 50s. Meanwhile, blockage wreaks havoc all the way down the food chain.

How about the aging attorneys themselves? Encouraging them to deny their own mortality isn’t helpful. Sorry, but once you’re over 65, you may be young at heart, but to the rest of the world, your colorists and/or your combovers aren’t persuasive.

Here’s the painful truth: we baby boomers are not that special. Think you’re indispensable? Put your hand in a pail of water, pull it out, and look at the size of the hole you leave. That’s how indispensable you are. Do you remember any of your own mentors fondly? Well, someday that’s what you’ll be to others — if you truly succeed in the ways that matter most.

Those who have followed this blog from the beginning know that its first series of posts, “PUZZLE PIECES — Parts 1 through 12” (now archived in “CONNECTING THE DOTS”), dramatizes the problem of aging partners who hang on too long.  (https://thebellyofthebeast.wordpress.com/category/connecting-the-dots/) Special ciriticism goes to those who have also inculcated their firms with a business school mentality of misguided metrics. Such baby boomers are now positioning themselves to extract one  final pound of flesh on the way to dotage.

Are these aging leaders who retain literal death grips on their billings positive role models for successors? If the firms themselves don’t survive them, it won’t matter, will it?

WEIRD TILTS AT THE RANKINGS WINDMILL

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[UPDATE: On January 1, 2011, Northwestern’s former dean, David Van Zandt, became president of The New School in New York.]

Virtually all law school deans — with the notable exception of Northwestern’s David Van Zandt — have urged prospective law students to ignore U.S. News rankings because they’re methodologically flawed, susceptible to manipulation, and counterproductive to sound student decision-making. None of that seems to bother students, most of whom regard them as authoritative.

I introduced Van Zandt’s outlier position in an earlier post. (https://thebellyofthebeast.wordpress.com/2010/04/16/the-us-news-rankings-are-out/). More can be said about how his business school mentality hurts the school and its students, but not today. Right now, I’m more interested in two recent articles on U.S. News rankings.

First, Mercer University recently named its new dean. That’s not a particularly newsworthy item, especially for an undistinguished school. But the National Law Journal thought otherwise. Presumably, its May 27 headline explained why:

“‘U.S. News’ antagonist lands deanship at Mercer University.” http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202458884379&US_News_antagonist_lands_deanship_at_Mercer_University&hbxlogin=1

So that’s what made Gary Simson’s new job noteworthy? He was a U.S. News antagonist? But that describes every law school dean in the country — except Van Zandt.

Simson had been dean of the Case Western Reserve Law School for  18 months when, in summer 2008, he urged law schools to boycott the U.S. News rankings because deans pandered to them. (http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202423187148)

Dean Van Zandt quickly proved the point. A few months after Simson’s call to arms, the ABA Journal exposed Northwestern’s aggressive recruitment of prospective second-year students whom that school had rejected a year earlier. (http://www.abajournal.com/magazine/article/transfers_bolster_elite_schools/)  As transfers, their LSATs wouldn’t count in the U.S. News rankings, but their tuition dollars would go directly to the school’s bottom line.

Nobody asked students in the original 238-person class what they thought of that win-win solution for the business school mentality of misguided metrics. Their class grew by almost 20% in 2006-2007. Ironically, Northwestern’s U.S. News ranking has fallen for each of the last three years — from 9th to 11th.

Unfortunately, Dean Simson was already a wounded warrior when he took up the rankings crusade. He’d generated criticism from faculty, alumni, and donors for a variety of reasons, including Case’s low state bar passage rates (75% for Case first-time takers in February 2008 compared to 95% for Cleveland State’s). In October 2008 — just before another round of bar passage results was released — the university’s president announced that Simson  “had agreed to resign.”  (http://blog.cleveland.com/metro/2008/10/case_western_reserve_law_schoo.html) So much for the boycott messenger and his message.

Yet now, two years later, Simson’s antagonism toward U.S. News rankings has become his claim to fame. Could skepticism about the rankings be attracting new followers and redeeming old ones?

That leads to the second article, also in the NLJ.  The Society of American Law Teachers (SALT) has urged law schools to stop providing U.S. News with incoming students’ LSAT scores. SALT asserts that the pressure on admissions deans to get students with top scores compromises efforts to achieve campus diversity. (http://www.law.com/jsp/article.jsp?id=1202458731270)

It’s a noble gesture, but little more. Starving U.S. News of LSAT scores means only that the magazine will have to get such information from the ABA and the Law School Admission Council, both of which report LSATs at individual schools.

Still, recent noise about the dangers of using flawed rankings criteria as decisive metrics is encouraging. The volume should increase in October when U.S. News releases its newest compilation: rankings of the best law firms.

On that one, U.S.  News may have awakened a slumbering giant. In February, the ABA House of Delegates adopted a resolution to investigate the proposed law firm rankings and, while they’re at it, take a close look at law school ranking methods, too.

Perhaps someday wise leaders of our profession will grasp the destructive impact of the rankings game — from law schools to big firms (based on their average-equity-profits-per-partner metric) — and it will all end. But I doubt it.

After all, metrics make life’s decisions so much easier, don’t they? Indeed, they eliminate the need to think at all!

A BETTER ALTERNATIVE OR A LEAP FROM THE FRYING PAN?

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Thirty years ago, New York was a scary place for me — mostly because I’d never been there. Midwestern curiousity led me to interview with Cravath, Swaine & Moore’s on-campus representative.

I’d heard that its road to success was the toughest. Rumors circulated that it hired twenty new attorneys for every one or two it might promote to equity partner eight or more years later. Not surprisingly, most of my fellow Harvard students regarded Cravath as the quintessential competitive sweatshop — a characteristic that many of my peers actually found attractive.

Not me. I went elsewhere because, in those good old days, there was an elsewhere to go. Cravath is probably not much different from what it was back then. It’s just that most of the biglaw world has followed its example. As other top-50 firms tightened equity partner admission requirements, Cravath just kept doing what it had always done.

Why did firms emulate Cravath? Law student lore made it the best by some undisclosed criteria. In retrospect, I think money had a role. Even back in 1980, it was one of a very few firms where advancement to equity partner meant wealth that was immense, at least for a lawyer.

According to the first ever listing of the Am Law 50 in 1985, Cravath ranked 2nd in profits per partner with $635,000. For those behind it, the descent was steep: the #10 firm was under $400,000; #30 was $255,000; #50 was $170,000.

Cravath blazed a trail to riches that now accompany those who reach biglaw’s summit: average equity partner profits for the entire Am Law 100 exceeded $1.26 million last year.

But Cravath remains different. Most of biglaw moved to two-tier partnerships and eat-what-you-kill systems where a few key metrics — billings, billable hours, and leverage ratios — now determine individual equity partner compensation.  Cravath’s single-tier model has reportedly remained lock-step: admission to its partnership means fixed financial rewards over an entire career without regard to individual books of business.

I don’t know if Cravath’s lawyers as a group are any happier than attorneys in other big firms. But the firm is now courting its Generation X’ers. According to the Wall Street Journal, partners in their late-30s and early-40s have “taken a more pro-active approach, building new relationships and handling much of the work that historically would have been taken on by partners in their 50s.” (WSJ, May 28, 2010, C3)

Referring to Cravath’s deferential culture in which young partners traditionally forwarded big deals to older colleagues, the article notes that senior partners have nurtured the new environment that gives younger lawyers earlier name recognition.

Why has it worked so far?

“The older attorneys didn’t mind, partly because the pay they received didn’t get cut as a result,” the Journal observes.

In other words, lock-step allows elders to step out of the spotlight without hits to their pocketbooks.

In the current biglaw world, Cravath’s experiment is risky. Will young partners remain loyal or use their newly gained client power to pursue financial self-interest elsewhere? Will Cravath be forced to modify or abandon lock-step so that it can retain young partners controlling clients and billings?

I don’t know. Equally significant, I suspect those most directly affected by what the article characterizes as a “sea change at one of the best-known and most conservative of white-shoe law firms” don’t know, either.

And what does it mean for new associates trying to understand how this affects the firm’s culture and their own career prospects?

Ah, the things I didn’t think to consider when I was a second-year law student looking for a job about which I knew almost nothing.

Fortunately, students are wiser now, right?