THE ABA IS RAISING THE WRONG BAR

“[W]hen we look at these low performing schools, you guys are doing absolutely nothing.”

So said a member of the Department of Education’s National Advisory Committee on Institutional Quality and Integrity last June. I wrote about the painful session in August. The question on the table was whether the American Bar Association should lose its power to accredit law schools. The ABA leaders on the receiving end of that stinging rebuke had expected routine approval. What they got instead was a three-hour thrashing.

Disaster Avoided

The ABA beat back the committee’s recommendation of a 12-month suspension of its accreditation power. Even worse, it learned nothing from the episode. That became apparent in October, when the ABA’s Section of Legal Education and Admissions to the Bar recommended a rule change that it thought was monumental. It’s actually far too little coming far too late.

The new rule would require at least a 75 percent of a law school’s graduates to pass a state bar exam within two years of receiving their degrees. The current standard requires a 75 percent pass rate within five years. Since 2000, only four law schools have faced difficulty under the current standard, and all were restored to full accreditation.

Looming Disaster Remains

The Department of Education’s heat directed at schools taking advantage of their students could cool significantly under President Trump, who recently paid $25 million to settle former students’ fraud claims against Trump University. The troubling law school backstory is a less dramatic variation on the same theme.

Plummeting national bar passage rates coupled with growing student debt for degrees of dubious value are the culmination of a dysfunctional market in legal education. That dysfunction is taking a cruel toll on a generation vulnerable to exploitation by elders who know better. Sooner or later, we’ll all pay the price.

The ABA’s latest misfire toward a remedy misses the key point: even passing the bar doesn’t mean getting a law job. Within 10 months of graduation, fewer than 60 percent of 2015 graduates obtained full-time long-term employment requiring bar passage. Compared to the class of 2014, the number of such positions declined by 10 percent (from 26,248 to 23,687). The total number of 2015 graduates: 40,000.

Students attending marginal schools bear the greatest burden. Their schools use a business model that relies on federal student loan dollars to fill classrooms. Because schools have no accountability for their graduates’ poor employment outcomes, they are free to dip ever deeper into the well of unqualified applicants. Prospective employers have noticed.

Disaster For Many Students

The ABA’s persistent refusal to confront the employment rate problem brought the Department of Education into the picture. At the June hearing, committee members posed tough questions that ABA Managing Director Barry Currier had a tougher time answering. As some marginal schools received huge federal dollars, the committee noted, the vast majority of their graduates couldn’t get law jobs.

Now the ABA proposes tinkering at the edges. Even at that, based on the outrage generated from some inside the professorial ranks, you’d think it was trying to do something truly revolutionary. Some educators complained that shortening the 75 percent bar passage rate period from five years to two would discourage schools from admitting minority candidates, thereby leading to a less diverse profession.

That’s a non sequitur. If an additional three years after graduation is needed for some graduates to pass the bar, whatever they’re learning during that post-graduate period can’t be coming from their former classrooms. And, of course, nothing in the ABA proposal solves the employment problem.

Disaster Rewards a Few

As educators rely on student debt to keep their law schools operating, they’re getting paid, regardless of how their graduates fare in the job market. That frames the issue with which the ABA should be grappling but continues to dismiss: Marginal law schools are unable place most of their graduates in full-time long-term bar passage-required jobs.

Solving that problem requires schools to have financial skin in the game. Here’s one suggestion: tie the availability of a student’s federal loan dollars to a law school’s employment outcomes. That would create accountability that no dean or administrator currently possesses. And they sure don’t want it.

The ABA is institutionally incapable of embracing the change required to create a functional market in legal education. Vested interests are too embedded. The clout of the marginal schools is too great.

For example, the head of the ABA’s last “task force” on the challenges of financing legal education was also serving as the chairman of the national policy board of the Infilaw consortium of for-profit law schools, including the Charlotte School of Law. In fact, Dennis W. Archer still chairs the Infilaw national policy board. On November 15, Charlotte was the subject of a rare event: the ABA placed the school on probation because of its admissions practices. The ABA also ordered public disclosure of its bar passage rates.

But the ABA didn’t address the bigger problem with Charlotte that afflicts students at similar schools: dismal full-time long-term bar-passage required employment rates. Charlotte’s rate for the class of 2015 was 26 percent — down from 38 percent in 2012. Here’s the real kicker: from 2011 to 2015, the number of graduates at Charlotte increased from 97 to 456.

Growing supply in response to shrinking demand. That’s what happens when the people running law schools view students as revenue streams for which the schools will never have any financial accountability. The federal government backs the loans; educational debt survives personal bankruptcy; many in a generation of young would-be attorneys begin adulthood in a deep, six-figure financial hole.

Perhaps President-elect Trump will identify with the plight of the student-victims of this continuing disaster. Where would he be today if he had not been able to discharge his business loans through a string of bankruptcy filings? Not in the White House, that’s for sure.

INDIANA TECH: ANOTHER COSTLY LESSON IGNORED

I’ll have more to say about the election, but not today. Instead, let’s take a closer look at a story that got lost in the shuffle of presidential politics. It deserves more attention than it received.

Back in 2013, when Indiana Tech opened the state’s fifth law school, I wrote that the decision was the latest example of pervasive legal market dysfunction. As the number of applicants declined, marginal schools increasingly were admitting students who wouldn’t be able to pass the bar, much less get decent jobs requiring a JD. Schools such as Indiana Tech were continuing to inflate the growing lawyer bubble, which was also the title of my 2013 book. (Proving that some things never change, it came out in paperback earlier this year.)

The central contributor to that bubble remains in place. Specifically, the federal student loan program absolves marginal law schools of accountability for their graduates’ poor employment outcomes, while encouraging administrators to fill classrooms with tuition-paying bodies. The results are predictable: lower admission standards, lower bar passage rates, and burgeoning law student debt for degrees of dubious value from marginal schools.

Victims of a Doomed Experiment

Indiana Tech’s inaugural class of first-year students began their studies in August 2013. Two years later, the school failed in its first attempt to get ABA accreditation. Further proving the ABA’s failure to address the continuing crisis in legal education, it granted Indiana Tech provisional accreditation earlier this year. The school graduated its first twelve students in 2016; only one passed the bar exam. Another passed on appeal, and a third passed the bar in another state.

On October 31, 2016, the school’s 71 students received an unwelcome Halloween surprise. The board of trustees announced its unanimous vote to close forever on June 30, 2017.

Indiana Tech President Arthur Snyder’s statement said, “[F]or the foreseeable future, the law school will not be able to attract students in sufficient numbers for the school to remain viable.”

Here’s the thing. President Snyder’s observation was equally true in 2011 — when the school completed its feasibility study and announced the decision to move forward. But rather than confront obvious facts about the demand for legal education that were apparent to everyone else, President Snyder insisted in 2013:

“We have given this decision careful research and consideration, and we believe we can develop a school that will attract and retain talented individuals who will contribute to our region’s economic development.”

Thanks to President Snyder and Indiana Tech’s board of trustees, those individuals — students and faculty — now face a tough and uncertain road.

Seeking Answers

What could have motivated such an obviously bad decision to open a new law school in the teeth of a lawyer glut? The answer is pretty simple. Snyder is a business guy. He has an MBA in strategic management from Wilmington University and a doctorate in education (innovation and leadership) from Wilmington University. Before joining the academic world, he spent more than 20 years in the telecommunications industry, rising to the position of vice president for the Data Systems Division of AT&T.

For someone focused on a bottom line approach to running higher education, adding a law school probably seemed like a no-brainer. In a 2011 interview for the National Law Journal, Snyder explained his strategy. Noting that about half of Indiana residents who attended ABA-approved law schools were doing so out of state, he said, “There are potential students who desire a law school education who cannot get that education in this area….”

Capturing that segment of the market was a strange premise upon which to build the case for a new law school. Which Indiana students admitted to established out-of-state schools did he expect to jump to an unaccredited newcomer?

The Real Play For Dollars

Like most law schools that should have closed their doors long ago, Indiana Tech’s business strategy sought to exploit market dysfunction. If the school could attract a sufficient number of aspiring attorneys to Fort Wayne, student loan dollars for tuition would take care of everything else, including a spiffy new building:

“The Indiana Tech Law School contains eight state-of-the-art classrooms, a courtroom, several learning and relaxation spaces for students including lounges and an outdoors patio, a three-story library, and everything else our students need to make their time here a successful and rewarding experience.”

Would graduates obtain decent full-time long-term jobs requiring the Indiana Tech JD degrees costing them close to $100,000? That would never become President Snyder’s problem.

The Opposite of Leadership

After the ABA denied Indiana Tech provisional accreditation in 2015, the handwriting was on the wall. But Snyder doubled down on a bad bet. The school tried to bolster admissions with a loss leader: a one-year tuition scholarship to students who enrolled in the fall of 2015. Anyone who took that deal is now twisting in the wind.

Indiana Tech reportedly lost $20 million. But its failed business strategy, followed by gimmicks that could never save it, produced dozens of real-life human victims whose damage is immeasurable. Those people don’t count in calculating Indiana Tech’s profit-and-loss statement. Except as conduits for federal student loan dollars, it’s fair to ask if they ever counted at all.

In his 2011 interview about the then-planned new law school, President Snyder suggested that Indiana Tech law school could be the first to offer a joint JD and master in science degree in leadership. He thought it would be an especially good fit because the university already has several programs in leadership.

Sometimes the most important learning in life comes from careful observation of negative role models. Speaking of negative role models, as I said at the beginning, I’ll have more to say about the election results in the days and weeks to come.

ASSOCIATE PAY AND PARTNER MALFEASANCE

Cravath, Swaine & Moore raised first-year associate salaries from $160,000 to $180,000 — the first increase since January 2007. As most law firms followed suit, some clients pushed back.

“While we respect the firms’ judgment about what best serves their long-term competitive interests,” wrote a big bank’s global general counsel, “we are aware of no market-driven basis for such an increase and do not expect to bear the costs of the firms’ decisions.”

Corporate clients truly worried about the long-run might want to spend less time obsessing over young associates’ starting salaries and more time focusing on the behavior of older attorneys at their outside firms. In the end, clients will bear the costs of short-term thinking that pervades the ranks of big firm leaders. Some already are.

Historical Perspective

Well-paid lawyers never generate sympathy. Nor should they. All attorneys in big firms earn far more than most American workers. But justice in big law firms is a relative concept.

Back in 2007 when associate salaries first “jumped” to $160,000, average profits per equity partner for the Am Law 100 were $1.3 million. After a slight dip to $1.26 million in 2008, average partner profits rose every year thereafter — even during the Great Recession. In 2015, they were $1.6 million — a 27 percent increase from seven years earlier.

In 2007, only 19 firms had average partner profits exceeding $2 million; in 2015 that group had grown to 29. But the average doesn’t convey the real story. Throughout big law, senior partners have concentrated power and wealth at the top. As a result, the internal compensation spread within most equity partnerships has exploded.

Twenty years ago, the highest-paid equity partner earned four or five times more than those at the bottom. Today, some Am Law 200 partners are making more than 20 times their lowest paid fellow equity partners in the same firm.

It Gets Worse

Meanwhile, through the recent prolonged period of stagnant demand for sophisticated legal services, firm leaders fueled the revolution of partners’ rising profits expectations by boosting hourly rates and doubling leverage ratios. That’s another way of saying that they’ve adhered stubbornly to the billable hours model while making it twice as difficult for young attorneys to become equity partners compared to 25 years ago.

The class of victims becomes the entire next generation of attorneys. Short-term financial success is producing costly long-term casualties. But those injuries won’t land on the leaders making today’s decisions. By then, they’ll be long gone.

So What?

Why should clients concern themselves with the culture of the big firms they hire? For one answer, consider two young attorneys.

Associate A joins a big firm that pays well enough to make a dent in six-figure law school loans. But Associate A understands the billable hour regime and the concept of leverage ratios. Associate attrition after five years will exceed 80 percent. Fewer than ten percent of the starting class will survive to become equity partners. Employment at the firm is an arduous, short-term gig. In return for long-hours that overwhelm any effort to achieve a balanced life, Associate A gets decent money but no realistic opportunity for a career at the firm.

Associate B joins one of the few firms that have responded to clients demanding change away from a system that rewards inefficiency. Because billable hours aren’t the lifeblood of partner profits, the firm can afford to promote more associates to equity partner. Associate B joins with a reasonable expectation of a lengthy career at the same firm. Continuity is valued. Senior partners have a stake in mentoring. The prevailing culture encourages clients to develop confidence in younger lawyers. Intergenerational transitions become seamless.

Associate A tolerates the job as a short-term burden from which escape is the goal; Associate B is an enthusiastic participant for the long haul. If you’re a client, who would you want working on your matter?

The Same Old, Same Old

As clients have talked about refusing to pay for first-year associate time on their matters, big firms’ upward profit trends continue. But the real danger for firms and their clients is a big law business model that collapses under its own weight.

As it has for the past eight years, Altman-Weil’s recently released 2016 “Law Firms In Transition” survey confirms again the failure of leadership at the highest levels of the profession. Responses come from almost half of the largest 350 firms in the country. It’s a significant sample size that provides meaningful insight into the combination of incompetence and cognitive dissonance afflicting those at the top of many big firms.

When asked about the willingness of partners within ten years of retirement to “make long-term investments in the firm that will take five years or more to pay off,” fewer than six percent reported their partners’ “high” willingness to make such investments. But at most firms, partners within ten years of retirement are running the place, so the investments aren’t occurring.

Almost 60 percent of firm leaders reported moderate or high concern about their law firms’ “preparedness to deal with retirement and succession of Baby Boomers.” Meanwhile, they resolve to continue pulling up the ladder, observing that “fewer equity partners will be a permanent trend going forward” as “growth in lawyer headcount’ remains a “requirement for their firms’ success.”

Do law firm leaders think they are losing business to non-traditional sources and that the trend will continue? Survey says yes.

Do law firm leaders think clients will continue to demand fundamental change in the delivery of legal services? Survey says yes. (56 percent)

Do law firm leaders think firms “are serious about changing their legal service delivery model to provide greater value to clients (as opposed to simply reducing rates)”? Survey says no. (66 percent)

Do clients think law firms are responding to demands for change? Survey says most emphatically no! (86 percent)

But do law firm leaders have confidence that their firms are “fully prepared to keep pace with the challenges of the new legal marketplace”? Survey says yes! (77 percent)

If cognitive dissonance describes a person who tries to hold two contradictory thoughts simultaneously, what do you call someone who has three, four or five such irreconcilable notions?

At too many big law firms the answer is managing partner.

LAW SCHOOLS AND THE NEW YORK TIMES

On June 17, Noam Scheiber’s article, “An Expensive Law Degree and No Place to Use It,” appeared in The New York Times. He focused on individual human tragedies resulting from the legal education bubble.

Four days later, Professor Steven Davidoff Solomon countered with his Times column, “Law School Still a Solid Investment, Despite Pay Discrepancies.” Notwithstanding the title, he’s moving in Scheiber’s direction.

Learning from Mistakes

Professor Solomon’s prior ventures into legal education haven’t gone particularly well. In November 2014, he wrote “[T]he decline in enrollment could lead to a shortage of lawyers five years from now.” Highlighting Thomas Jefferson School of Law as one of the marginal schools fighting to remain alive, Solomon suggested, “It may be tempting to shut them in these difficult times, but it can cost tens of millions to open a new one. Better to invest and cut back on expenses for a while and see what happens.”

Consistent with his area of expertise — financial and securities regulation — Professor Solomon was relying on the market to work. But in legal education, it never gets a chance. Bankruptcy laws and the federal student loan program insulate law schools from accountability for their graduates’ poor employment outcomes.

Waiting to “see what happens” became a triumph of hope over reality. For the Thomas Jefferson class of 2013, the full-time long-term JD-required employment rate nine months after graduation was 29 percent. For the class of 2014, it was 30 percent. Even with an additional month for the class of 2015 to find jobs, the ten-month FTLT-JD-required employment rate was 24 percent. But the school did win that nagging fraud case brought by a recent graduate.

In April 2015, Solomon’s column on legal education and the profession was so riddled with errors that I climbed out of a hospital bed to write a responsive post culminating in this question, “Whatever happened to The New York Times fact-checker?”

Almost There

With all of that carnage in the rearview mirror, Professor Solomon’s June 21 article assumes a more moderate tone. Most importantly, he acknowledges the different legal education markets that exist for new graduates: “[I]t is clear that it is harder out there for the lower-tier law schools and their graduates.”

Noting that some big firms announced starting salary increases to $180,000 for the class of 2016, he cautions, “Only the lucky 17 percent of graduates earn salaries this high. To be in this group, you needed to go to a top 10 school or graduate in the higher ranks of the top quartile of law schools. Things are harder for every other law graduate.”

Solomon also accepts the bimodal distribution of starting salaries that results from the different markets for law graduates: “[W]hile 17 percent of graduates earned median salary of $160,000 in 2014, about half had a median starting salary of $40,000 to $65,000.”

The article could and should have ended with this: “Either way, it is clear that it is harder out there for lower-tier law schools and their graduates.”

In Defense of Fellow Professors?

Four days before Solomon’s article, Noam Scheiber’s Times piece profiled once-hopeful students at Valparaiso University School of Law. They’d incurred massive debt for a JD degree, but couldn’t find jobs requiring one. Scheiber also quoted a professor who recently headed the school’s admissions committee: “If we could go back, I think we should have erred a little more on the side of turning people down.”

Immediately after the publication of Scheiber’s article, social media took over when a law professor complained in an open letter to Scheiber: “Have you seen this line of peer-reviewed research, which estimates the boost to earning from a law degree including the substantial proportion of law graduates who do not practice law?”

The cited “line of peer-reviewed research” consisted of one study, co-authored by that professor in 2013. When Scheiber invited the professor to identify any factual errors in his article, the professor provided six alleged mistakes. For anyone interested in diving into those weeds, Scheiber posted the six items and his response on his Facebook page, including this:

“It’s not worth reviewing the controversy about your work on law graduate earnings here, since the criticisms are well-established. But suffice it to say, I think it’s strange to respond to a claim that the economic prospects of people graduating after the recession have fundamentally changed relative to those who graduated before the recession with a study that only includes people who graduated prior to 2009.”

(UPDATE: On Friday, June 24, the professor responded to Scheiber’s response.)

Among the many other criticisms to which Scheiber refers is the 2013 study’s failure to consider differences among law schools in their graduates’ incomes. In other words, it ignored the actual law school markets.

Nearing the Finish Line

Professor Solomon’s latest article centers on the importance of recognizing those different markets. But he still cites the 2013 study for the proposition that “most law students earned a premium of hundreds of thousands of dollars over what they would have earned had they not gone to law school, even taking into account the debt they accrue.”

Even so, Solomon’s slow walk away from the 2013 study improves on his April 2015 column. There, he relied on it to suggest that an “acceleration in compensation results in a premium of $1 million for lawyers over their lifetime compared with those who did not go to law school.” Now he’s down to “hundreds of thousands of dollars” for “most law students.”

Professor Solomon teaches at a top school, UC-Berkeley. He knows that plenty of students at other schools have a tough road ahead. Solomon no longer refers to an overly broad $1 million lifetime premium. He has also added a qualifier (“most law students” — meaning a mere 51 percent) — to whatever he thinks the study proves about the economic benefit of a JD. In other words, he has rendered the 2013 study meaningless to anyone considering law school today.

So why does Professor Solomon continue to cite the study at all? Better not to ask. Accept progress wherever you find it.

 

A FIRM TO WATCH

Something worth watching could be happening at King & Wood Mallesons, one of the world’s largest law firms. It has an interesting history, a challenging present and, perhaps, an even more challenging future.

Past

Beijing-based King & Wood came into existence in 1993. If you look for photos or other information about either name partner, you won’t find them. Neither person ever existed. China doesn’t have U.S.-type ethics rules requiring that law firms carry the names of lawyers who work there (or did before retirement or death). The distinctly non-Chinese names are a branding exercise aimed at reaching a global audience.

In 2012, King & Wood merged with Australian-based Mallesons Stephen Jacques. In 2013, it added London-based SJ Berwin and now has 2,700 lawyers scattered across 30 offices around the world. It operates as a verein, meaning that the constituent firms are legally separate and don’t share profits. (Whether any verein is a real law firm is a subject for another day.)

Present

In July 2015, King & Wood Malleson’s Europe and the Middle East announced “rocketing” results.  Profits per equity partner had soared by 39 percent. During the year, the firm hired 15 lateral partners, including attorneys from Fried Frank, Linklaters, and Eversheds.

As London-based (and newly named) managing partner William Boss boasted, “This is an exciting time for our region….”

Maybe a bit too exciting, even for Boss.

Two days later, The Lawyer offered a potentially relevant footnote to the “rocketing” 39 percent jump in partner profits reported only two days earlier: “A number of insiders have questioned the large jump in PEP, attributing the growth to an exceptionally big and anomalous recovery for the firm on one piece of litigation.”

At about the same time, the firm revealed that it had completed its “partnership review” resulting in an almost 10 percent reduction in its London office equity ranks, according to The Lawyer. In addition, the firm lost some “big hitters.”

On January 15, 2016, William Boss resigned as managing partner — more than a year before his term was set to expire in May 2017. The firm said that he would remain in the position until April while the search for his replacement occurred.

Future

On January 20, The Lawyer reported that the firm had “launched a review of its capital contributions structure in order to ease cashflow, stop repeated delays to profit distributions and stem the flow of exits by ‘frustrated’ partners.”

What does that mean? Time will tell. But story in The Lawyer included these nuggets:

— “A number of sources close to KWM have accused the firm of withholding profit distributions over the last five years in order to keep up with tax bills, leading to a raft of senior exits last year.”

— “One source close to KWM said the firm had ‘only just’ paid out the full distributions due in August 2015, having previously paid just half the money owed in that quarter. Another said they had only been paid 25 per cent of their distributions for 2014/15, despite it being nine months into the financial year.”

— “Complaints about delayed profit payments follow a good year financially for the firm in the UK, Europe and Middle East, adding to the frustration of a number of partners, a source said. ‘It’s been a so-called record year for the firm but partners just aren’t getting paid,’ they added.”

— “The review could see its UK partners being asked to pay higher contributions to the firm in return for more units in the LLP.”

If the last item comes to pass, partners who write checks to the firm might want to understand exactly what they are buying and why.

BIG LAW’S SHORT-TERMISM PROBLEM

Recently, the New York Times devoted a special section of “Dealbook” to short-termism. Big law firms made a prominent appearance in an article focusing on leadership transition. Citing statistics at the managing partner level, the Times reports that only three percent of law firm managing partners are under age 50. Twelve percent are over 70. Almost half are between 60 and 70.

The Tip of the Graying Iceberg

The core problem of transition runs deeper than a single demographic data point about the age of those at the top of the big law pyramid. The developing crisis goes far beyond the question of who the next managing partner will be.

At most firms, aging partners at all partnership levels are hanging on to clients and billings. For them, it’s a matter of survival. Except for lock-step firms, equity partners “eat what they kill” — that is, their closely guarded silos of clients and billings determine their annual compensation.

In that culture, hoarding becomes essential to preserving annual compensation that partners come to regard as rightfully theirs — and theirs alone. Stated in language that many senior partners use in criticizing today’s young attorneys, these aging lawyers have developed a wrong-headed sense of entitlement.

The fact that they’re making far more than they dreamed of earning in law school doesn’t matter to them. Neither does the fact that they are compromising the future of their firms. But their short-term gains could become the institution’s long run catastrophe.

See the Problem

Surveys confirm that law firm leaders recognize the resulting problem. Seven years ago, Altman Weil issued the first of its annual “Law Firms in Transition” series. Since then, the survey has documented a fundamental failure of leadership on this issue.

For example, in the 2011 survey, Altman Weil asked firm leaders to name the areas in which they had the greatest concerns about their firms’ preparedness for change: “The top issue, identified by 47% of all firms, was the retirement and succession of Baby Boom lawyers in their law firms.”

In the 2012 survey, 70 percent of managing partners had “moderate” or “high” concern about client transition as senior partners retire. On a scale of one (no concern) to ten (extreme concern), the median score was seven.

In the 2013 survey, only 27 percent of managing partners reported that they had a formal succession planning process in place.

Ignore the Problem

How have these leaders responded to what they have identified for years as the most pressing long-term problem facing their firms? Poorly.

The 2015 survey observes, “In 63% of law firms, partners aged 60 or older control at least one quarter of total firm revenue, but only 31% of law firms have a formal succession planning process.”

There’s a reason that law firm leaders balk at meaningful transition planning. It requires them to accept the fact that they won’t run their firms forever. But contemplating one’s own mortality can be unpleasant.

It also requires them to rethink their missions. Leadership is not about maximizing this year’s partner profits or pursuing growth for the sake of growth to create illusory empires over which a dictator can preside. It requires a willingness to create incentive structures that encourage long-term institutional stability.

Toward that end, lofty aspirations are easier to state than to achieve. But here are a few governing principles:

— Client service should be central to everything a law firm does.

— Partner cooperation should trump partner competition.

— Clients and billings should flow seamlessly to the next generation while allowing aging partners to retain a sense of self-worth as firms encourage them to prepare for their “second acts,” whatever they may be.

— The culture of a firm should encourage partners to sacrifice some short-term financial self-interest in the effort to leave the firm better than they found it — just as their mentors did for most of them.

Become the Problem

The most creative leaders understand that all of this means thinking outside the conventional billable hour box that remains central to the short-term growth and profit-maximizing mindset. In that respect, the contrast between the absence of true leadership and clients’ desires is striking.

Since 2009, Altman Weil has done an annual survey of corporate chief legal officers, too. The survey asks the CLOs: “How serious are law firms about changing their legal service delivery model to provide greater value to clients?”

The responses are on a scale of one (not at all serious) to ten (doing everything they can), Every year since the survey began, the median score has been three. Three out of ten. Stated differently, as far as clients are concerned, their outside lawyers have little interest in responding to demands for change.

Likewise, LexisNexis/Counsel Link’s most recent semi-annual report analyzing six key metrics confirms the impact of short-termism:

— Clients want alternative fee arrangements. AFAs account for only seven percent of all billings.

— Clients want relief from high hourly rates. For the trailing 12-month period ending on June 30, 2015, big firms of more than 750 attorneys had a median partner billing rate of $711 an hour — up 6 percent from the period ending on December 31, 2014. (For firms of 501-750 lawyers the median hourly rate during the same period increased by only $5 an hour.)

The Future Is Here

As big firm leaders drag their feet, clients aren’t waiting for them. They have figured out that the biggest of big law premiums isn’t always worth it. An October 2013 study of $10 billion in client fee invoices by LexisNexis/Counsel Link concluded the “large enough” firms of 201-500 lawyers are eating into the market share of firms with more than 750 lawyers.

From 2010 to 2013, the biggest firms saw their market share drop from 26 percent to 22 percent. Meanwhile, the market share of the “large enough” firms increased from 18 to 22 percent. For high-fee matters totaling $1 million or more, the shift was even more dramatic: “large enough” firms increased their market share from 22 to 41 percent.

Anyone believing that most big law firm leaders are long-term thinkers preparing their firms for a challenging future is ignoring the actual behavior of those leaders. Most of them are focused on getting rich today. That’s not a strategy for success tomorrow.

BASEBALL AND BIG LAW

Watching the Chicago Cubs make their way into the National League Championship Series causes me to reflect on one of my favorite themes: baseball as a metaphor for life. It might have something to tell big law firms, too.

I focus on the Chicago Cubs because I’ve watched the team since the season began. Before giving up on them several years ago, I was a fan for three decades that started with the birth of our first child in 1981. He and his siblings qualify as long-suffering lifetime fans. For many years, we had season tickets.

As an adult, I knew little of Cubs’ fan angst because I grew up in Minneapolis — an American League city where some of the best entertainment was watching then-Twins coach Billy Martin get thrown out of games during the team’s 1965 pennant run. (Famously, Sandy Koufax refused to pitch in game one of that World Series because it fell on Yom Kippur.  He then won games five and seven — pitching complete game shutouts in both.)

After years of Cubs’ frustration, what’s working now? That’s where parallels to big law emerge.

Talent

The Cubs have stars on their roster. Jake Arrieta, Jon Lester, Anthony Rizzo, Addison Russell, and Kris Bryant have become household names in Chicago and beyond. As in a law firm, talent is a necessary condition for success.

But talent alone is not sufficient. Just ask former partners of Dewey & LeBoeuf — a firm loaded with talent.

Depth

When shortstop Addison Russell went down with a pulled hamstring in game three of the National League Division Series, Cubs fans gasped. But the team didn’t fold. Javier Baez was ready to take the field. In game four of the series, Baez hit a three-run homer that turned the tide in the Cubs’ favor.

At shortstop — and every other position — the Cubs have a backup plan. According to Altman Weil’s 2015 Report, “Law Firms In Transition,” only 31 percent of law firms have a formal succession planning process in place.

Most big law firm partners resist transition because it vests younger attorneys with the power to claim a share of client billings. Likewise, most firms offer no financial incentive for partners to mentor young attorneys. There’s no way to bill that time.

Attitude

From July through September and into early October, Cubs ace pitcher Jake Arrieta seemed unstoppable. Then he gave up four runs in the fist five innings of League Division Series game 3. Relief pitchers stepped in and Cubs hitters stepped up. The Cubs won 8-6.

In post-game interviews following game four, the latest Cubs phenomenon, Kyle Schwarber, echoed what many other players said: “We pick each other up. When one guys is off, others step up. We have each other’s back.”

At many big firms, some partners seem determined to put sharp objects into the backs of their fellow partners.

Leadership

Cubs manager Joe Maddon doesn’t offer brash, self-aggrandizing remarks. He leads by quiet example. He expects players to do their best on the field, but he encourages balance in their lives. To emphasize his point, sometimes he cancels batting practice, especially if the team is in a hitting slump. He wants them thinking about other things.

Sometimes, he locks the clubhouse door until two or three hours before game time. Don’t show up early; you won’t have anything to do when you get there. Maddon wants them to develop lives beyond the field. Imagine a big law partner telling associates to go home at five or six o’clock — and not bill any time after they get there.

Maddon models behavior aimed at achieving balance. Before the season began, he took a dozen players to visit children at the Rehabilitation Institute of Chicago. Throughout the year, Anthony Rizzo, a cancer survivor, made similar trips to hospitals. So did Chris Coghlan and many of his teammates.

Culture

Maddon loves the game. He wants everyone around him to love it, too. He keeps the team loose. Sometimes he manages the team like a little league coach, moving players into different positions. Schwarber was behind the plate one game and in the outfield the next; Coghlan played five different positions in a single game; Bryant played four.

Humor is one of Maddon’s principal weapons. At the end of September, he brought exotic animals into the clubhouse. During the pregame media session, he talked to a flamingo named Warren.

“When is the last time you heard about 20-somethings who couldn’t wait to get to work?” Cubs President Theo Epstein asked one interviewer after the game that propelled the Cubs into the League Championship Series.

Perhaps most importantly, Maddon wants players to remember why they chose baseball as a career. Then they’ll realize that they should be enjoying themselves. Many lawyers could benefit from similar introspection.

On a personal note, I thoroughly enjoyed practicing law. But I’m sure glad that I spent time coaching all of my kids’ baseball and softball teams — more than 25 in all. Good luck to any young big law attorney who tries to replicate that feat today. Make the effort. It’s worth it.