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Thursday Thinkpiece: Harper on the Crisis in the Legal Profession

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The Lawyer Bubble: A Profession in Crisis
Steven J. Harper
New York: Basic Books, 2013

Excerpt from the Introduction chosen by the author.

INTRODUCTION

When I applied to law school in 1975, the nation was recovering from a severe and prolonged recession. Even so, I always assumed that I’d be able to make a comfortable living with a legal degree, although I didn’t think that practicing law would make me rich.

Three and a half years later, I became a new associate at one of the nation’s largest law firms, Kirkland & Ellis. It had about 150 attorneys in two offices, Chicago and Washington, D.C. My annual salary was $25,000, which is $80,000 in 2012 dollars. There were rumors that some partners in large firms earned as much as ten or fifteen times that amount; by any measure, that was and is a lot of money.

The unlikely prospect of amassing great wealth wasn’t what attracted me to the law. Rather, I saw it as a prestigious profession whose practitioners enjoyed personally satisfying careers in which they provided others with counsel, advice, judgment, and a unique set of skills. Mentors at my first and only law firm taught me to focus on a single result: high-quality work for clients. If I accomplished that goal, everything else would take care of itself.

Today, the business of law focuses law school deans and practitioners in big law firms on something else: maximizing immediate profits for their institutions. That has muddied the profession’s mission and, even worse, set it on a course to become yet another object lesson in the perils of short-term thinking. Like the dot-com, real estate, and financial bubbles that preceded it, the lawyer bubble won’t end well, either. But now is the time to consider its causes, stop its growth, and take steps that might soften the impact when it bursts.

The Lawyer Bubble is about much more than lawyers. It’s about a mentality that has accompanied the corporatization of America’s most important institutions, including the legal profession—a dramatic transformation that is still unfolding. Behind the change is a drive to boost current-year performance and profits at the expense of more enduring values for which there are no quantifiable measures. But omitting critical costs from the decision-making calculus doesn’t make them any less important or their damaging consequences any less profound.

. . . .

The lawyer bubble began to form when vital institutions—law schools and the American Bar Association (ABA)—abdicated their responsibilities in favor of misguided metrics and insularity. Law school deans are supposed to be the profession’s gatekeepers, but far too many have ceded independent judgment in an effort to satisfy the mindless criteria underlying law school rankings, especially U.S. News & World Report’s annual list. Those rankings didn’t exist until 1987; now they rule the law school world for both students and administrators. Flawed methodology infects each category—quality assessment, selectivity, placement, and resources. But with the acquiescence of the ABA, deans inflate their schools’ rankings with incomplete and misleading information and encourage prospective students to pursue dreams that, for most of them, are impossible, all in the name of increasing applications, enrollments, and tuition revenues.

Vulnerable young people become convinced that anyone can succeed as a lawyer. Because much of their undergraduate audience consists of liberal arts majors who can’t decide what to do next, law schools appear to be an attractive default option. Add a universal human affliction—confirmation bias—and the fit becomes too perfect: law schools tell prospective students what they want to hear, and sure enough, they hear it. The U.S. News rankings then tell them which schools to attend. Easy money for student loans fuels the entire system.

Meanwhile, the proliferation and growth of law schools offer a stark contrast to the shrinking job market. The number of JDs awarded annually grew from thirty-eight thousand in 2001 to more than forty-four thousand in 2011, but legal employment opportunities have trended in the opposite direction: nine months after graduation, only about half of the class of 2011 had secured long-term full-time work requiring a legal degree. Staggering educational debt burdens thousands of young attorneys who have no hope of getting the legal jobs that inspired them to incur those loans in the first place. Many of those lucky enough to find work in big law firms, traditionally the most envied segment of the profession, soon find themselves trapped in a hell of attorney dissatisfaction because the people running those firms now view their primary mission as perfecting a relatively new business model that prioritizes specially adapted metrics.

The big-law-firm analog to the U.S. News law school rankings had arrived a few years earlier when the American Lawyer, a publication that Yale Law School graduate Steven Brill founded, put out its first-ever list of the nation’s fifty largest law firms, the Am Law 50. Even more important, it disclosed average equity partner earnings for each. Beginning with the magazine’s inaugural issue in 1979, Brill had already begun reporting on the big money that some lawyers made. But the 1985 listing of the top firms—now referred to as “big law”—was a watershed event. A delicate subject that had been off-limits in polite company became a new, highly public basis for competition among lawyers, who are a fiercely competitive bunch. It hasn’t brought out the best in us.

Of course, lawyers are only one example of our cultural obsession with rankings. The search for supposedly objective certainty through the illusory comfort of a numerical answer makes any list of the supposed “best” or “top” of just about anything attractive. From high school football teams to liberal arts colleges to hospitals and more, any ranking takes on a life of its own. It guides consumer behavior and creates incentives for those who run the ranked institutions. But an emphasis on near-term results—namely, the organization’s immediately upcoming ranking—sacrifices enduring values.

The special role of the legal profession in our society made the impact of rankings particularly insidious. Big law became big business as a kind of arms race to the top of the new Am Law charts began. With the help of a new cottage industry—law firm management consultants—the prevailing business model for large law firms accelerated toward a handful of indicators that measure immediate results: billable hours, client billings, and associate-to-partner leverage ratios. Lost along the way to record equity partner profits were large elements of what once made the law a profession. To paraphrase the American Lawyer’s editor in chief, Aric Press, writing twenty-five years after the Am Law 50 first appeared, when the bonds of partnership are no stronger than last year’s IRS Form K-1 income statement, the essential attributes of partnership become casualties.

The principal victims of this phenomenon have been those lawyers who become trapped in the culture of short-termism. That culture is especially rampant among the prestigious big firms, where, as a group, attorneys are the unhappiest.

Excerpt adapted with permission from The Lawyer Bubble: A Profession in Crisis by Steven J. Harper. Available from Basic Books, a member of The Perseus Books Group. Copyright © 2013.

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