Monthly Archives: March 2013

THE LAWYER BUBBLE — Early Reviews and Upcoming Events

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The New York Times published my op-ed, “The Tyranny of the Billable Hour,” tackling the larger implications of the recent DLA Piper hourly billing controversy.

And there’s this from Bloomberg Business Week: “Big Law Firms Are in ‘Crisis.’ Retired Lawyer Says.”

In related news, with the release of my new book, The Lawyer Bubble – A Profession in Crisis, my weekly posts will give way (temporarily) to a growing calendar of events, including:

TUESDAY, APRIL 2, 2013, 10:00 am to 11:00 am (CDT)
Illinois Public Media
“Focus” with Jim Meadows
WILL-AM – 580 (listen online at http://will.illinois.edu/focus)

TUESDAY, APRIL 2, 2013, 1:00 pm to 2:00 pm (CDT)
“Think” with Krys Boyd
KERA – Public Media for North Texas – 90.1 FM (online at http://www.kera.org/think/)

THURSDAY, APRIL 4, 2013, 11:00 am to Noon (EDT)
Washington, DC
“The Diane Rehm Show”
WAMU (88.5 FM in DC area) and NPR

FRIDAY, APRIL 5, 2013, 10:45 am to 11:00 am (EDT)
New York City
“The Brian Lehrer Show”
WNYC/NPR (93.9 FM/820 AM in NYC area)
(http://www.wnyc.org/shows/bl/)

SATURDAY, APRIL 6, 2013, Noon (EDT)
New Hampshire Public Radio
“Word of Mouth” with Virginia Prescott
WEVO – 89.1 FM in Concord; available online at http://nhpr.org/post/lawyer-bubble)

WEDNESDAY, APRIL 10, 2013, 8:00 am to 9:00 am (CDT)
“The Joy Cardin Show”
Wisconsin Public Radio (available online at http://www.wpr.org/cardin/)

FRIDAY, APRIL 12, 2013
“The Shrinking Pyramid: Implications for Law Practice and the Legal Profession” — Panel discussion
Georgetown University Law Center
Center for the Study of the Legal Profession
600 New Jersey Avenue NW
Location: Gewirz – 12th floor
Washington, D.C.

TUESDAY, APRIL 23, 2013, 7:00 pm (CDT) (C-SPAN 2 is tentatively planning to cover this event)
The Book Stall at Chestnut Court
811 Elm Street
Winnetka, IL

Here are some early reviews:

“The Lawyer Bubble is an important book, carefully researched, cogently argued and compellingly written. It demonstrates how two honorable callings – legal education and the practice of law – have become, far too often, unscrupulous rackets.”
—Scott Turow, author of Presumed Innocent and other novel

“Harper is a seasoned insider unafraid to say what many other lawyers in his position might…written with keen insight and scathing accusations…. Harper brings his analytical and persuasive abilities to bear in a highly entertaining and riveting narrative…. The Lawyer Bubbleis recommended reading for anyone working in a law related field. And for law school students—especially prospective ones—it really should be required reading.”
—New York Journal of Books

“Anyone looking into a career in law would be well advised to read this thoroughly eye-opening warning.”
—Booklist, starred review

“[Harper] is perfectly positioned to reflect on alarming developments that have brought the legal profession to a most unfortunate place…. Essential reading for anyone contemplating a legal career.”
—Kirkus Reviews

“[Harper] burns his bridges in this scathing indictment of law schools and big law firms…. his insights and admonitions are consistently on point.”
—Publishers Weekly

“Imagine that the elite lawyers of BigLaw and the legal academy were put on trial for their alleged negligence and failed stewardship. Imagine further that the State had at its disposal one of the nation’s most tenacious trial lawyers to doggedly build a complete factual record and then argue the case. The result would be The Lawyer Bubble. If I were counsel to the elite lawyers of BigLaw and the legal academy, I would advise my clients to settle the case.”
—William D. Henderson, Director of the Center on the Global Legal Profession and Professor at the Indiana University Maurer School of Law

“With wit and insight,The Lawyer Bubble offers a compelling portrait of the growing crisis in legal education and the practice of law. This book is essential reading for anyone concerned about the profession or contemplating a legal career.”
—Deborah L. Rhode, Professor of Law and Director of the Center on the Legal Profession, Stanford University

“This is a fine and important book, thoughtful and beautifully written. It makes the case – in a responsible and sober tone – that we are producing far too many lawyers for far too small a segment of American society. It is a must-read for leaders of law firms, law schools, and the bar, as the legal profession continues its wrenching transition from a profession into just another business.”
—Daniel S. Bowling III, Senior Lecturing Fellow, Duke Law School

“In this superb book, Steven Harper documents, ties together and suggests remedies for the deceit that motivates expanding law school enrollment in the face of a shrinking job market, the gaming of law school rankings and the pernicious effect of greed on the leadership of many of our nation’s leading law firms. The lessons he draws are symptomatic, and go well beyond the documented particulars.”
—Robert Helman, Partner and former Chairman (1984-98), Mayer Brown LLP; Lecturer, University of Chicago Law School

“Every sentient lawyer realizes that the legal profession is in crisis, but nobody explains the extent of the problem as well as Steven Harper. Fortunately, he also proposes some solutions – so there is still room for hope. This is an essential book.”
—Steven Lubet, author of Fugitive Justice and Lawyers’ Poker

“Steven Harper’s The Lawyer Bubble is an expression of tough love for the law, law firms and the people who work in them. The clear message is take control of your destiny and your firm to avoid the serious jeopardy that confronts far too many firms today. Whether you are a partner, associate, or law student, you should read this compassionate and forceful work.”
—Edwin B. Reeser, Former managing partner, author, and consultant on law practice management

“Harper chronicles the disruption of his once-genteel profession with considerable sadness, and places the blame squarely at the wing-tipped feet of two breeds of scoundrel: law school deans, and executive committees that have run big law firms …” –“Bar Examined” – Book Review in The Washington Monthly (March/April 2013)

PARDON MY CYNICISM

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A friend sent me a letter that he received recently from Wake Forest University, where his son is a sophomore. Actually, it came from the Law School, which was “excited to announce” a “Pre-Law Program for Undergraduates.” Last summer, the school offered a single course, “Legal Theory, Practice, and Communication.” It was such a hit that the school has now added a second summer prelaw class, “Advocacy, Debate, and the Law.”

Noble motives

The letter outlines a laudable premise: “The primary purpose of this Program is to show undergraduates what law school is like. Some college students in the past have applied to law school simply because they could not decide what else to do after graduation.”

So far, so good. The letter then acknowledges that law school “is now far too expensive to engage in a ‘test drive’ for a whole year. This Program gives  college students a realistic view of law student life and educates them about the career opportunities of lawyers.”

Again, so far, so good.

A worthy endeavor

Adequately informing undergraduates tracking themselves to law school is a vitally important educational mission that is long overdue. Colleges and universities have largely refrained from efforts to penetrate the confirmation bias of young people who think they’ll lead lives depicted in Law & Order, The Good Wife, and Suits. A legal career can be personally and professionally rewarding, but it’s not for everyone.

Wake Forest boasts that its program “gives college students a realistic view of law student life and educates them about the career opportunities of lawyers.” It’s nice to give undergraduates a taste of the Socratic method so it doesn’t upend them in law school. But other aspects are far more important.

Does the program include data on new graduates’ dismal job opportunities? For example, nine months after graduation, only 56 percent of the Wake Forest Law School class of 2011 secured full-time, long-term jobs requiring a legal degree — the same as the overall average for all law schools.

Likewise, does Wake Forest’s prelaw program cover the staggering six-figure debt that now burdens the vast majority of new attorneys generally, whose median starting salaries have fallen to $60,000? Does it discuss the widespread career dissatisfaction among practicing attorneys? Let’s hope so.

Troublesome turns

Assuming Wake Forest has, indeed, included these and other essential elements of a truly valuable prelaw curriculum, other aspects of the program suggest competing agendas at work.

Why does Wake Forest offer its prelaw program only in the summer — at a cost of $3,240 per course? (“An interested student would receive maximum benefit from enrolling in both courses,” the letter notes.) Why not offer a course that provides meaningful insights into law school and the profession during the regular academic year? And don’t tell me that professorial teaching loads have become too burdensome.

Another item gave me pause. The press release announcing the Wake Forest program included this enticing remark from the law professor who co-teaches the classes: “Since we will have gotten to know the students, we will also gladly write letters of recommendation about the student’s ability to do law school work.”

His colleague added this: “In fact, we are very excited that one of our students, who applied to law school this year with our help, was accepted at several top-ranked law schools.”

Those comments don’t neutralize student confirmation bias; they reinforce it.

Closing the deal

And then there’s this: The law school admissions office “will waive the $60.00 application fee for any student who attended the summer Program this year who later applies to Wake Forest Law School.” More applications — even from unqualified students — lower a school’s acceptance rate and thereby raise its U.S. News ranking.

But that’s not all. Again, directly from the press release: “[I]f that student is admitted and enrolls at Wake Forest law school, the student will receive a tuition credit for the first year equal to the amount spent for tuition in attending the summer program. That’s right—you could get the law school to pay you back for the money spent on tuition this year for the Summer Pre-Law Program!”

Here are the only words missing from the pitch: Act now while supplies last!

Something is amiss when the lines used to sell a prelaw education read like a late-night infomercial for steak knives.

SOMEBODY’S CHILD

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Nine years ago, Senator Rob Portman (R-Ohio) supported a constitutional amendment banning same-sex marriage. Now he wants Congress to repeal the provisions of the Defense of Marriage Act that deny federal recognition to such marriages. Apparently, his reversal on this issue began two years ago when his college freshman son told Portman and his wife that he was gay.

Plenty of prominent national figures have similarly changed their views. The tide of history seems overwhelming, even to conservative commentator George Will. Others can debate whether Portman and those who have announced newly acquired positions favoring gay rights are courageous, hypocrites, opportunists, or something else.

For me, the more important point is that his own child’s connection to the issue caused Portman to think differently about it. Applied to lawyers, the question become simple:

What if the profession’s influential players treated the young people pursuing a legal career as their own children?

Portman’s explanation

In 2011, Portman knew that his son was gay when 100 law graduates walked out of his commencement address at the University of Michigan.

“But you know,” he told CNN recently, “what happened to me is really personal. I mean, I hadn’t thought a lot about this issue. Again, my focus has been on other issues over my public policy career.”

His key phrases are pregnant with larger implications: “[W]hat happened to me is really personal….I hadn’t thought a lot about this issue.”

Start with law school deans

As the lawyer bubble grew over the past decade, some deans and university administrators might have behaved differently if a “really personal” dimension required them to think “a lot” about their approaches. Perhaps they would have jettisoned a myopic focus on maximizing their law school rankings and revenues.

At a minimum, most deans probably would have disclosed earlier than 2012 that fewer than half of recent graduates had long-term full-time jobs requiring a legal degree. It seems unlikely that, year after year, they would have told their own kids that those employment rates exceeded 90 percent. Perhaps, too, deans would have resisted rather than embraced skyrocketing tuition increases that have produced six-figure non-dischargeable educational debt for 85 percent of today’s youngest attorneys.

Then consider big firm senior partners

At the economic pinnacle of the profession, big firms have become a particular source of not only attorney wealth, but also career dissatisfaction. In substantial part, both phenomena happened — and continue to happen — because managing partners have obsessed over short-term metrics aimed at maximizing current year profits and mindless growth.

For example, the billable hour is the bane of every lawyer’s (and most clients’) existence, but it’s lucrative for equity partners. If senior partners found themselves pushing their own kids to increase their hours as a way to boost those partners’ already astonishing profits, maybe they’d rethink the worst consequences of a destructive regime.

Similarly, the average attorney-to-equity partner leverage ratio for the Am Law 100 has doubled since 1985 (from 1.75 to 3.5). Perhaps managing partners wouldn’t have been so quick to pull up the ladder on lawyers who sat at their Thanksgiving tables every year, alongside those managing partners’ grandchildren who accompanied them. Not every young associate in a big firm should advance to equity partner. But offering a 5 to 10 percent chance of success following 7 to 12 years of hard work isn’t a motivator. It invites new attorneys to prepare for failure.

Finally, compared to the stability of a functional family, the current big law firm lateral partner hiring frenzy adopts the equivalent of periodic divorce as a cultural norm. Pursued as a growth strategy, it destroys institutional continuity, cohesion, community, and morale. Ironically, according to Professor William Henderson’s recent American Lawyer article “Playing Not to Lose,” it offers little or no net economic value in return.

Adopting a family outlook or a parental perspective isn’t a foolproof cure for what ails the legal profession. Indeed, running law schools and big firms according to the Lannister family’s values (“The Game of Thrones”) — or those of Don Corleone’s (“The Godfather”) — might not change things very much at all.

It’s also worth remembering that Oedipus was somebody’s child, too.

“GAMING THE REPORTING”?

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In a recent interview with Lee Pacchia of Bloomberg News, U.S. News & World Report’s director of data research Robert Morse explained this year’s only revision to his law school rankings methodology. Morse gave different weights to various employment outcomes for class of 2011 graduates. But he didn’t disclose precisely what those different weights were.

Morse said that such transparency worried him. Full-time, long-term jobs requiring a legal degree got 100 percent credit. But he didn’t reveal the weight he gave other employment categories (part-time, short-term, non-J.D.-required) because he didn’t want deans “gaming the reporting of their results.” It was an interesting choice of words.

Teapot tempests

In some ways, all of the attention to the changes in this year’s rankings methodology is remarkable. Certainly, a school’s employment success for graduates is important. But the nine-month data point for which the ABA now requires more detailed information accounts for only 14 percent of a school’s total U.S. News ranking score. To put that in context, consider some of the more consequential rankings criteria.

Fifteen percent of every school’s U.S. News score is based on a non-scientific survey of practicing lawyers and judges. The survey response rate this year was only nine percent.

Likewise, the “peer assessment” survey that goes to four faculty members at every accredited law school — dean, dean of academic affairs, chair of faculty appointments, and most recently tenured faculty member — accounts for 25 percent of a school’s ranking score. It asks those four individuals to rate all ABA-accredited law schools from 1-to-5, without requiring that any respondent know anything about the schools he or she assesses.

Taken together, the two so-called “quality assessment” surveys comprising 40 percent of every school’s ranking are a self-reinforcing contest for brand recognition. As measures of substantive educational value, well, you decide.

Game of moans

But if, as Morse suggests, his concern is “gaming the reporting,” he must be worried that some deans would either: 1) self-report inaccurate data; or 2) otherwise change their behavior in an effort to raise their school’s ranking. He’s a bit late to both parties.

Scandals engulfed prominent law schools that submitted false LSAT and GPA statistics for their entering classes. But how many others haven’t been caught cheating? No one knows. As for permissible behavior that accomplishes similar objectives, examples abound.

For years, deans seeking to enhance the 12.5 percent of the rankings component relating to median LSAT scores for J.D. entrants have been “buying” higher LSATs through “merit” scholarships. Need-based financial aid has suffered. Ironically, those merit scholarships often disappear after the first year of law school.

Likewise, the faculty resources component is 15 percent of every school’s ranking. But it encourages expenditures — and skyrocketing tuition — without regard to whether they benefit a student’s educational experience.

Whom to blame

Morse establishes the criteria and methodology that incentivize behavior producing these and many other perverse outcomes. But he doesn’t think that any of the current problems confronting the profession are his fault.

“U.S. News isn’t the ABA,” he told Pacchia. “U.S. News doesn’t regulate the reporting requirements…[W]e’re not responsible for the cost of law school, the state of legal employment, the impact that recession has had on hiring, or the fact that 10 or 20 new law schools have opened over the last couple decades. We’re not responsible for the imbalance of jobs to graduates. No, I think we’re not responsible. I think we’ve helped prospective students understand what they are getting into than they were previously.”

Of course, the problem isn’t just the flawed rankings methodology itself. Also culpable are the decision-makers who regard a single overall ranking as meaningful — students, deans, university administrators, and trustees. Without their blind deference to a superficially appealing metric, the U.S. News rankings would disappear — just as the U.S. News & World Report print news magazine did years ago.

Cultural obsession

Pervasive throughout society, rankings may be a permanent feature of the legal profession. But it’s worth remembering that they’re relatively new. Before the first U.S. News list of only the top 20 law schools in 1987, prospective students and law schools somehow found each other.

Today, rankings facilitate laziness. The illusory comfort of an unambiguous numerical solution is easier than engaging in critical thought and exercising independent judgment. Forgotten along the way is the computer science maxim “garbage in, garbage out.”

EXCERPT FROM “THE LAWYER BUBBLE – A Profession in Crisis”

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The Chronicle of Higher Education just posted an excerpt from my forthcoming book, THE LAWYER BUBBLE – A Profession in Crisis.” The excerpt will also appear in the Chronicle’s March 15 print issue (on the cover, I think). Here’s the link to the online version: http://chronicle.com/article/Pop-Goes-the-Law/137717/

ANOTHER LAW SCHOOL DEAN MISSES THE TARGET

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Today’s chapter in the continuing story of proposals to reform legal education comes from James L. Huffman, emeritus dean at Lewis & Clark Law School. His February 20 Wall Street Journal op-ed recommends eliminating ABA law school accreditation requirements. Maybe that’s a good idea, but not for the reasons that Huffman offers.

Mischaracterizing the crisis

Huffman notes that the sharp decline in the number of law school applicants has created “a true crisis, and law schools are scrambling to figure out how to manage with fewer tuition-paying students.” He proposes to end that crisis by helping marginal law schools devise a way to remain in business. Specifically, he thinks that removing most accreditation requirements would unleash a wave of innovation in legal education and “let a thousand flowers bloom.”

Here’s a better idea: prune the garden.

A thread of insight

Staggering student debt accompanying dismal job prospects for recent graduates causes Huffman to lament the oversupply of lawyers. He suggests that the ABA’s task force “should start by looking within: The organization is a major source of the problem.” Then he lambasts the organization’s accreditation standards as too restrictive.

Huffman’s non sequitur fails to mention the ABA’s most obvious contribution to attorney oversupply: accrediting too many new schools — 15 since 2003 alone. Likewise, Huffman observes correctly that the ABA has become a victim of regulatory capture, but he doesn’t connect it directly to the worst consequences of that victimization: deans free to engage in deceptive behavior to fill their classrooms. Graduate employment rates looked great when schools could include short-term and part-time jobs, work that didn’t require a law degree, and temporary positions that the schools themselves had created.

Missing the real target

Why did deans do it? Because everybody did. Greater transparency risked deterring applicants, which had implications for a school’s U.S. News ranking. Unilateral candor threatened the business model.

Likewise, the rankings methodology has created powerful incentives to maximize spending on expensive new facilities. No ABA accreditation standard requires an established law school to construct a new library. But building one can help to attract applicants, and its added cost boosts the “average expenditures per student” component of a school’s ranking.

Who’s to blame?

Huffman is correct that the ABA has failed the profession. But so have deans who have allowed U.S. News rankings criteria to displace their independent judgment. Rankings have become central to their business models and the youngest generation of lawyers is paying the price.

Some metrics relating to emeritus dean Huffman’s own school prove it:

— At the time of Huffman’s op-ed, the “Admissions” section of Lewis & Clark’s website displayed this headline: “Law school surges in U.S. News & World Report rankings.” The link took the reader to an article about the school’s nine-place jump to 58th in the 2013 edition.

— Full-time tuition and fees at Lewis & Clark currently exceed $38,000 — a 50 percent increase over 2005, when it was around $25,000.

— Lewis & Clark’s annual entries in the 2006 through 2012 ABA Official Law School Guides included employment rates nine months after graduation ranging from 89 to 97 percent. But like most law schools, it achieved those spectacular results using the ABA’s expansive definition of employed. Under the new rules first applicable to the class of 2011, nine months after graduation only 46 percent of Lewis & Clark graduates had full-time long-term jobs requiring a legal degree.

Reality therapy

Huffman’s rhetoric about ABA accreditation requirements as entry barriers that inhibit competition and innovation misses the mark. Allowing schools to experiment with what he calls a “bonanza of legal education alternatives” ignores a harsh reality: There aren’t enough law jobs for the number of graduates that schools already produce, and there won’t be for a long time.

Allowing schools to increase their use of cheaper non-tenured faculty and to offer on-line classes, as Huffman suggests, won’t solve that problem. In fact, absent other necessary reforms, cost reductions leading to lower tuition would likely increase the oversupply of lawyers.

The plethora of deans publishing op-eds in major newspapers presents a new danger. When they Identify false issues and propose ineffectual reforms, they divert needed attention from the real causes of the current crisis. A thorough search for the origins of the lawyer bubble should lead most deans to a painful encounter with a mirror.

That’s an op-ed I’m eager to read.