The Faculty Lounge

From Prof to Prez

Pepperdine law professor Tim Perrin has been named the new president of Lubbock Christian University (where Perrin was an undergrad).  Story here.  Video here.

Didn't another Pepperdine academic recently become president of a Texas university?

A Few Ways NOT To Solve America's Unequal Access To Justice

“The very rich,” F. Scott Fitzgerald famously observed, “are not like you and me.”  True enough, Dorothy Parker reportedly quipped: “They have more money.”  Parker's remark also backhandedly lends some perspective on a genuinely serious contemporary problem receiving more currency than usual these days:  America's unequal access to justice.

We find ourselves at a sadly ironic moment in the history of the American bar.  After many years of increasing demand for lawyers, structural changes in the pricing and staffing of legal services that have been both exposed and amplified by the Great Recession have created a downdraft in the demand for new lawyers.  As a result, something like one-third of recent law school graduates have found it impossible to find or keep a job requiring or preferring a law license.  Some appreciable additional quantity of recent graduates have been able to find only episodic "legal process" piecework such as document review, often yielding relatively meager rewards, no security or benefits, and virtually no hope of meaningful training or advancement.  Talk about quiet desperation.

At the same time, for many years legal aid programs have been turning away substantial numbers of applicants for their services, not for ineligibility or lack of expertise, but simply for lack of the resources necessary to meet the poverty population's needs.  The recent slashes in the budget of the Legal Services Corporation (a congressionally created and funded entity that distributes money to programs providing legal services to the indigent), and plummeting revenues from states' IOLTA funds (Interest on Legal Trust Accounts, the funds many states derive by requiring depository institutions to remit the interest on lawyers' trust accounts to the state to fund legal services for the needy) resulting from swan-diving interest rates, have only made things worse.

The irony emerges when we lay these two points side by side:  There are currently tens of thousands of unemployed or underemployed recently-licensed lawyers, and hundreds of thousands of low- and moderate-income consumers in aching need of legal assistance with housing, employment, education, healthcare and government benefits issues (among other things).  Why, it would be fair to ask, has this excess supply not linked up with this excess demand?

One plausible explanation is simply the inverse of Dorothy Parker's rejoinder:  The poor are poor because they have no money.  As a result, an economist might easily conjecture, their needs provide a meager draw for the many lawyers in today's economy with no (or insufficient) work. 

Up to this point, I imagine that my readers (assuming one or the other of them isn't otherwise occupied) will consider this discussion obvious.  But it raises some potentially interesting implications:

First, a hat-tip to David Segal, the New York Times' cheerful basher of the legal academy and the organized bar with a striking knack for getting things almost exactly half-right, who in one of his recent jeremiads suggests that law schools' costs of meeting ABA accreditation standards have so raised the price of a legal education that graduates simply can't afford to serve the legal needs of the poor and middle class.  (Full disclosure:  I spoke with Segal at some length before his recent and widely remarked-upon New York Times piece about how law schools don’t teach “lawyering.”  The story completely ignored several issues with Segal’s perspective I had brought to his attention during our conversation that I thought he had agreed were worthy of consideration.  For the record, I am disappointed.)  Segal offers the alternative of the multi-tier system in the UK, in which there reportedly are different levels of licensure to practice law, with the most modest requiring only limited education at inexpensive institutions roughly equivalent to community colleges, and authorizing the holder to perform a correspondingly limited array of less complicated tasks.  I confess ignorance of the UK's professional licensing scheme (other than the existence of a mandatory two-year postgraduate apprenticeship for at least some practice certifications, which I take quite seriously); and I also confess that this multi-tier idea presents some genuinely interesting possibilities worth examining.  But the notion that it would make any significant dent in our current access to justice problems seems doubtful at best. 

Why?  To reiterate, the poor are poor because they have no money.  The hundreds of thousands of American families currently facing foreclosure can't afford to pay their mortgages.  Obviously they can't afford to pay attorneys, even if they could get them at minimum wage.  To put it slightly differently, if there were any paying market to provide legal services to low- or moderate-income consumers (outside legal aid, whose shrinking resources come from sources other than clients) thousands of recent law graduates would be rushing in to serve it.  In fact, what is striking about the current excess supply of lawyers is that it has not apparently found any substantial untapped lower-price market even among the middle class.

The obstacle is not that these new graduates have large student loans to pay.  Though many of them do, bear in mind that many recent government-funded student loans require the borrowers to pay only a percentage of whatever income they earn, rather than a fixed monthly amount.  More importantly, most unemployed law graduates understand that the best way to clear a path to a more satisfying and remunerative law job is to get actual experience doing legal work, even at subsistence wages; and that the surest way to make yourself less competitive and eventually unemployable in the legal job market is to lie fallow and do nothing (or to put food on the table with work that makes no use of the expensive diploma hanging over that unsightly crack in the wall).

Please understand that I am in no way suggesting that our unemployed law graduates are lazy, or stupid, or elitist.  In fact, I believe exactly the opposite--I think a great many are doing everything they can think of to address a terribly difficult situation, bringing tremendous effort, initiative and creativity to bear day after day after day.  Which is exactly why it ignores reality to recycle old suggestions that all we need to do to moderate the cost of legal services and meet currently unmet needs is lower the cost of entering practice.  (Examples include Segal’s New York Times article referred to above, and the buffoon at Brookings who recently enjoyed his fifteen minutes of fame advocating—as if it were a new idea—the abolition of any license to practice law.)  Excess capacity already exists and has effectively left those problems untouched; why would you want to create even more, even if it spawned none of the serious externalities these suggestions drag into the picture?  There may be other reasons to consider adjusting the barriers to entering the legal profession, but the ones most commonly advanced these days are refuted by current events.

--Bernie

Does the Economics of Law Practice Matter to Law Schools?

I return to the mysteries of law-firm economics after a hiatus to attend to three speaking engagements and complete the academic term (in other words, as an excuse to interrupt grading my Contracts exams).  A belated shout-out to my colleagues Anne Klinefelter and Andrew Chin, and to the editorial board and staff of the North Carolina Law Review, for an exceptionally well conceived and executed Symposium on Social Media (which was one of those speaking engagements)--watch for the Symposium issue of the NC L. Rev. coming this spring for some refreshingly novel and interesting takes on what is elsewhere becoming an overworked topic.  (You won't see a paper from me in that issue.  My topic at the conference, legal ethics in the social media environment, has already been admirably well explored in print and online by others.)

I want to stress how much these issues of practice economics actually matter to legal educators.  Virtually all of our students attend law school with the general aim of practicing law.  A great many end up in private law firms, large or small, or (usually a bit later in their careers) in corporate law departments.  The demand for lawyers in such positions (that is, for individual and corporate legal services) fundamentally affects our students' prospects for gainful employment. 

A bit more specifically, the overall demand for such services affects the overall availability of legal employment, and the distribution of that demand across different categories of work affects the availability of different kinds of legal jobs.  Thus when, as now, there is a significant contraction in at least one portion of the private sector--and here I'm referring to the large number of BigLaw layoffs in 2009 and 2010, and the contemporaneous and continuing substantial reduction in the rates of new hiring at larger firms--recent graduates with strong conventional qualifications who previously filled those BigLaw positions are now competing, and vigorously, for positions in smaller firms and government for which there was previously less such competition.

Put somewhat differently, there are fewer law jobs for recent graduates, and appreciably fewer such jobs at the higher end of the pay scale.  It's hardly rocket science to suggest that this affects the economic value of a law degree:  From behind the proverbial veil of ignorance, a student's chances of securing a job that supports the cost of three years' tuition, living expenses and forgone income and work experience are substantially less today than they were five years ago. 

This is by no means the whole story, of course.  Some prospective law students have far brighter economic prospects ex ante than others.  And economics is certainly not the only reason why people consider law school (though we have empirical data confirming the common-sense apprehension that a substantial number do weigh it as a substantial factor in their decision). 

But if the economic value of a law degree is falling overall (and I suggest to you that it is irresponsible to imagine otherwise), in a rational market you can expect fewer people to pay the rising cost to obtain it.  It is far too early to say "I told you so," but there have been double-digit decreases in law-school applications across the board this year over last (though we must bear in mind that last year saw record increases in law-school applications and LSAT administrations as college seniors confronted a horrific job market with an effort to settle into a three-year holding pattern). 

This is having some obvious effects on the legal academy.  The ability of law schools to continue to charge high tuitions--and continue to pay their faculties salaries far higher than those typical in the arts and sciences--depends on making the end product (the law degree) worth it.  Since many universities share in their law schools' economic surpluses, the universities care too.  Legal employers have been complaining  about the utility of the education with which their entry-level employees arrive for well over a generation, but for the first time in memory it would be fair to say that many law schools are listening, and questioning their mission.

One thing I am NOT suggesting is that legal employers know exactly what they need, and how we could be supplying it.  I'll try to explore in future posts why things are nowhere near this simple.  But that leaves everything up for grabs:  What questions should we be asking, and how should we be seeking the answers?  This is an obviously difficult inquiry, and I will try to suggest in future posts that it's even harder than it seems.  But make no mistake:  we are near the front end of a period that I believe will prove to be the most fraught with rapid change that the American legal profession has ever seen.

What a great time to be a part of things!

--Bernie

Adventures in Staffing: Are Junior Associates an Endangered Species?

The Wall St. Journal and WSJ Law Blog reported Monday that a survey conducted for the Journal by the Association of Corporate Counsel found that over 20% of the in-house law departments surveyed (over 350 of them) flat-out refused to pay for first- and second-year associates at large law firms.  This continues a trend that began several years ago, and accelerated considerably after the abrupt economic downturn in late 2008 as more in-house buyers of BigLaw services responded to sudden budgetary pressures by finally taking a hard look at what they had been paying for.

Above the Law responded to this data uncharacteristically by missing the point.  Elie Mystal, ordinarily a very acute observer of BigLaw, dismissed the in-house refuseniks as “stupid.”  He reasoned that clients’ refusal to pay overpriced junior associates for the “work that a conscientious high school student could perform” that is often their lot would simply force this work up the line to even more expensive midlevel associates.  He concluded:  “It’s entirely possible that 20% of clients don’t understand that having a midlevel do work more suitable for a trained monkey is actually worse than having a first-year do it.”

But of course clients do understand that, and so do the law firms they hire.  Clients who are unwilling to pay first-year associates’ rates for borderline clerical “legal process” work (loosely defined as the gathering, review and organization of documents and information) would certainly refuse to pay significantly higher rates for a fifth-year associate to provide the same services, and large law firms are smart enough not even to offer that as an alternative.  As discussed in detail in an article Prof. David McGowan and I posted in draft on SSRN a year and a half ago, and published in the Columbia Business Law Review last spring (2011 Colum. Bus. L. Rev. 1, available here), the result of clients’ heightening scrutiny of the staffing and pricing of legal process work has resulted in increasing volumes of that work being outsourced to much less expensive third-party services both abroad and domestically, and “downsourced” (a term McGowan and I believe we coined) within BigLaw to non-partnership-track “staff,” “discovery,” and contract attorneys paid much lower salaries or wages and billed out at much lower rates.  And since by 2007 legal process work had become a significant part of many junior associates’ workloads, the rapid reduction of the amount of that work available to associates billing at full freight has been a major factor in BigLaw’s unprecedented reductions in force and falling hiring rates from late 2008 through 2010.

The data are still coming in, but entering associate classes at AmLaw 200/NLJ 250 law firms this fall look like they will typically be 30%-50% smaller than they were in 2005-2007.  While a cyclical (recession-based) overall reduction in demand for high-end legal services explains part of this transformation, I believe that a significant and still growing part of the change is structural, and results from the change in the staffing and pricing of legal process work reflected in the trends discussed above.  What this means is that rates of hiring at larger law firms for highly compensated partnership-track associates are likely to remain much lower than they were in, say, 2007 for quite a long time.  While this is producing some wrenching short-term dislocations in the entry-level job market that are both tragic and widespread, it is at least as important to consider the possible longer-term effects not only on clients and law firms, but on prospective and current law students, law graduates, and law schools.

To keep this and future posts to a manageable length, I will consider these issues in a series of posts in the coming week or two, and dare to share some predictions.  Stay tuned.

Bernie

Hiring Snobbery

Brian Leiter has a post this week about the pedigree sensitivity in law school hiring.

Now comes a study suggesting that similar selectivity exists in Wall Street hiring.  The study, entitled Ivies, extracurriculars, and exclusion:  Elite employers' use of academic credentials, was published in the January 2011 issue of Research in Social Stratification and Mobility and is available here.  The author, Lauren A. Rivera, is a professor at Northwestern's Kellogg School of Management.  David Kaplan, writing for Fortune magazine, has a recent story on the study here.

Law Firm Hiring: There's an App for That!

The Benesch law firm has just released an app for iPhones and iPads to notify recent law grads and lawyers potentially interested in lateraling to the firm of upcoming job opportunities.  It will be interesting to see if this mode of recruitment takes off.  And, if it does, will recent grads be downloading multiple apps from multiple firms or will some entrepreneurial aggregator come along and offer a service of aggregating all available law firm jobs and making them available in an app format that notifies potentially interested applicants of job availability?  Is this the future of legal recruiting?

Promotion and Tenure Confidential

Folks thinking of going on the teaching market this year may be interested in taking a look at David Perlmutter's new book, Promotion and Tenure Confidential.  It may also be of interest to those on the tenure track.

While this book is not specifically geared towards law professors, many of the insights apply to those thinking of embarking on a law teaching career and those who have recently embarked on such careers.

One of the nice things about the book is that it's very up-to-date and has lots of great information about the impact of social networking (blogging, Facebook etc) on promotion and tenure prospects.  It also gives good advice on things like learning to write letters of recommendation for students and dealing with faculty politics generally.

There are also some good suggestions about time management in terms of balancing teaching, scholarship and service.  And some very good thoughts about dealing with students outside the classroom.

One interesting insight about teaching involved the importance of giving feedback to students during the semester if possible - which is of course difficult (or impossible) to the extent any course/professor is locked into an end of semester or end of year examination.  Two interesting suggestions Perlmutter makes on feedback (see pages 155-156) are:  (a)  have students complete their assessment before the end of the semester and require them to talk to you about their papers as the true "exit assignment" for the course; and, (b) ask students to critique their own work as an aspect of their assessment.  There are also useful insights on managing office hours and on dealing with the work/life balance.  It's a quick read (187 pages), and certainly worth a look.

 

 

Columbia Dept. Of Health Policy Seeks Law Faculty

This just in:

The Department of Health Policy and Management at the Mailman School of Public Health at Columbia University requests applications for the position of assistant or associate professor of law and health policy. This is a tenure-track position, with the academic rank to be determined in accordance with the successful candidate's record of research.  Candidates must possess a law degree.

The Department seeks applicants who have a strong research agenda, a record of (or potential for) receiving research funding, well- developed methodological skills, and the ability to teach health law to public health students. Graduate training in health policy, economics, politics, or a related social science discipline is desirable.

Please send a letter of application, including a statement of current and future research interests, a curriculum vitae, two sample publications or writing samples, and the names of three referees. Applicants should ask their three referees to submit their letters of recommendation directly and should address these to: Professor Michael Sparer, J.D., Ph.D. Chair, Department of Health Policy and Management Mailman School of Public Health Columbia University 722 West 168th Street New York, NY 10032.  Application review will begin on March 1 and the slot will remain open until filled.