Monthly Archives: August 2013

Unbundling Abounding

Two good articles on what’s happening to the “legal industry.”

If nothing else, they make clear that “legal industry” is what we are talking about. How and where the phrase “legal profession” should be used in the future, needs thought (at least by me).

For people in the industry, we must get past labels and over boundaries. Who are we? What do we do? How do we best organize and develop ourselves for that? Hint: the answer will not be the same for everyone. Another hint: get thee not to a consultant. The answer lies within.

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“Church of the Chickpea”

Like any great religion, hummus is something to fight about – something for people to disagree and hate each other about.

Jaffa

Jaffa

There are disputes about where hummus originated, among which peoples, and how long ago. And, of course, there are disputes about how to make it and what goes in it.

Here’s a really good piece of hummus writing  (an exemplar of the genre) which covers most of that ground and more. Thanks to Mack Sperling for spotting it.

Although there will be those who disagree, I am pretty sure hummus originated in Greensboro, North Carolina, fifteen or twenty years ago. Even within Greensboro though, there are disagreements about how you make it.

Greensboro

Greensboro


The Numbers that Shape Our Lives

Here are the numbers that underpin, What’s New About the New Normal: The Evolving Market for New Lawyers in the 21st Century.   not hiring

  • Law jobs. In 2007, 70% to 77% (depending on how you count some jobs) of law school graduates got law jobs within 9 months of graduating. In 2011, those numbers had fallen to 50% to 59%.
  • Where jobs were lost. Over half of the lawyer jobs lost since 2007 were lost at firms of over 100 lawyers.
  • Big firm hiring. Hiring by firms of over 100 lawyers has dropped since 2007 from 19% of law graduates to 12%.
  • Applications to law schools. Applications to law schools have dropped from 100,000 in 2004; to 59,000 in 2013.
  • Law school enrollments. Law school class sizes dropped from 52,500 in 2010; to 42,500 (estimated) in 2012.

Perhaps, you spotted the trend? The entire system has ratcheted down, mostly driven by what has happened at the big firms. Burk says it’s because work formerly done by new lawyers at large firms is now being  insourced, outsourced, downsourced and given to machines. He points to document discovery and due diligence (“what often amounted to legally literate clerical work”).

This is the new normal. We’re not going back.

And, it prompts questions about what a lawyer is, how lawyers are best organized and how they should be educated and trained. (Thoughts on that later.)

New Normal Confirmed, Characterized

UNC Law Professor Bernie Burk observes in his article, What’s New About the New Normal: The Evolving Market for New Lawyers in the 21st Century,  that since 2007 (i) law hiring has fallen substantially, (ii) most of the fall is attributable to reduced hiring by firms of more than 100 lawyers, (iii) applications to law schools have dropped, and (iv) law school enrollments and classes are now much smaller than they used to be.           new lawyer

Professor Burk says these drops are not merely reflections of normal cycles in the economy. Instead, he says they reflect structural changes in how legal services are delivered. Functions once performed by associates in large law firms are now being provided in new ways (outsourcing, downsourcing, insourcing and such). So you don’t need so many associates.

These are permanent changes, Burk says.

Bernie does not say it, but I will: the structural changes he identifies (and others he does not) have important implications for our evolving understanding of what “law practice” is; how we organize to deliver legal services, what law firms will look like; and how we educate new lawyers.

The world is steadily shaping itself to predictions made in a string of posts that appeared right here some time back.

Compensation Expense, Large Firms and Small, Tobacco and Peanuts

Domino EffectIn any kind of organization, staff must be sized to fit the workload. In law firms, personnel expense is far and away the largest expense and not overstaffing is critical to efficiency.

The market for lawyers was crazy for a while. Every law firm everywhere sought to “differentiate” itself by having the “best lawyers” and delivering the highest quality. And demand exceeded supply. Prices went crazy.

Now, the supply of lawyers is generally agreed to exceed the demand for their services – by a lot.  And now, new echelons of legal services providers no longer bother to claim that they have the “best” lawyers. They achieve the quality that’s needed for the work they do (i) by doing just one thing, or (ii) by outsourcing to low cost vendors, or (iii) with machines. In many cases, sophisticated clients are making the decision that they don’t need “the best” for every legal task.

Legacy, full-service law firms have responded to all this with reductions in force and, in many cases, by lowering compensation. The process is ragged. Some big firms have reduced forces but increased compensation. Many smaller firms are finding opportunities in clients’ disaffection with Big Law.

But, all the instruments agree: there are more lawyers than there is work for them to do. This is a fact that cannot be avoided.

For associates at legacy business law firms, this means there are fewer jobs and often at lower salaries.

In many firms partners have been — what’s the word? — retired, laid off, de-equitized?  Work is down at all levels and simply lowering the compensation of unproductive partners does not fix the problem. Even partners whose compensation is low continue to take up space (expensive square feet); they are inefficient marshals of work (they turn to work that junior lawyers should be doing); and they are diversions. In large firms intent on profits, this might be an intractable problem and the only solution may be to eliminate those partners.

In smaller firms, unproductive partners present mostly the same problems as in larger firms – but the fixes can be different. In fact, how a firm manages the challenge of sizing its partnership to the demand for its services defines the firm and its understanding of itself. A firm that concludes that short-term efficiency and productivity is required to keep a seat in the partnership, is saying to itself, in effect, that productive partners should go to other firms when they have opportunities to make more money somewhere else.

Big law firms are long since committed to this logic. Not so, the smaller ones.

tobacco-in-perfumery-tobacco-plant

Tobacco plant

peanut vine 2

Peanut vine

Make no mistake: declines in work and unproductive partners are a big problem in any firm — large or small. In many cases, the right fix, even in a small firm, may be to lop off an unprofitable lawyer – like tops and suckers off tobacco plants. But in mid-sized firms the logic is rarely that simple. Almost always there are better solutions.

This much is clear: in small firms and large, problems get better when they are candidly acknowledged and addressed. But mid-sized firms are more like peanut vines than tobacco plants. They must be cultivated differently.

Work First, Meaning Follows

The Ariely TED Talk suggests that, doing work — putting yourself into it — creates its meaning for you.                                                         MH900233173

Don’t wait for or expect “meaningful work” to come along. You start working and that makes the meaning. You connect with some things; not with others. You put yourself into it – your values, your effort. Meaning emerges – for you. Boy, does that ever describe my law practice.

So, develop a bias for doing things. If you can choose, choose things that have the potential to generate “flow.” But understand: work first, meaning follows.

Do stuff and stuff happens.

The meaning that emerges is for you. Whether there is also meaning for others comes later and not from the same sources.

This is not exactly what Ariely is on about. And, it’s not what my Sunday School lessons led me to expect about meaning. So, maybe there’s a difference between meaning and purpose. Maybe, you choose work for its purpose, the challenge and the flow; but you create the meaning.

Free books

What’s better than free books?   (Give me a book and I will learn to catch a fish.)Free

Somebody’s compiled a list with links to the best ones. eBooks. Audio books.

How’re you gonna beat that?

I love public libraries: Benjamin Franklin. Andrew Carnegie. Me. Three peas in a pod.

But this is even better than a public library. You don’t have to give the books back.

Think of the fish.