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PLP Pulse: News from the Frontiers of the Legal Profession
May 2011
 

Innovation & New Models

ABA Considering Non-Lawyer Partners in Law Firms
Legalweek.com

The American Bar Association’s Commission on Ethics is considering whether to allow non-lawyers to serve as partners in US law firms, according to Legalweek.com. The Commission is expected to submit its recommendations in August. In October the United Kingdom will implement the Legal Services Act, which permits British firms to employ non-lawyer partners, as well as to accept external investment and to float on the stock exchange. The ABA’s Commission on Ethics is reportedly not considering the latter options at this time.

Law Clerks for Congress?
National Law Journal

Legal educators, law students and politicians recently met in Washington DC to discuss creating a congressional legal clerkship program. “The idea,” according the National Law Journal, “is that young lawyers should spend a year researching and drafting laws before moving on to other legal endeavors.” The US House of Representatives has twice passed legislation to create such clerkships, but the US Senate voted down the measures. According to Georgetown Law Professor Dakota Rudesill, who is “spearheading” the effort, there are at least three benefits (as summarized by the Journal): (1) Congress would receive “whip-smart law graduates” with greater understanding of the law than congressional interns or other low-level staffers; (2) young lawyers would learn first-hand the legislative process in a “transformative” clerkship year; and (3) law clerks would “help change the perception among lawyers and the public that courts are the most important lawmaking body.”

Florida Senate Rejects Bill to Separate Supreme Court into Civil and Criminal Branches
Wall Street Journal Law Blog

After rejecting legislation that would have split the state Supreme Court into separate civil and criminal branches, the Florida Senate has approved a bill that increases the legislature’s oversight of the Court, permitting the Senate to confirm judicial appointments and to reject the Court’s procedural rules.



Legal Education

Highlighting “Lost-Scholarship Sticker Shock” in Law Schools
New York Times

The New York Times reports that some law schools offer merit-based scholarships to students knowing that many will fail to meet the grade point averages required to keep the scholarship active. At the same time, students do not fully appreciate how challenging it will be to maintain their grades or the financial risk associated with failing to maintain the required grade point average. Jerry Organ, a law professor at Minnesota’s St. Thomas School of Law, advocates greater disclosure that would detail the numbers and percentages of students on scholarships in order to reduce “lost-scholarship sticker shock” among law students.

New Law Schools Delay Launches
National Law Journal

Eleven new law schools were being discussed in 2008, according to the National Law Journal. Of these planned schools, only three have opened (in Boise, Idaho, Irvine, California and Knoxville, Tennessee), one is scheduled to open next fall (in Nashville, Tennessee) and another will likely open in 2012 (in Shreveport, Louisiana). Largely due to financial considerations, “nearly all of the others have been abandoned or placed on indefinite hold,” including the University of Delaware, which would have been the first public law school in the state.

Survey Reveals High Marks for Law School Clinics but Low Marks for Legal Skills Courses
ABA Journal

In a recent survey of law firm associates, respondents suggested that clinics and externships in law schools provide more effective training than legal skills coursework. The survey by the National Association of Law Placement found that about one-third of respondents participated in at least one legal clinic in law school, and over 60 percent found the experience “very useful.” About one-third participated in externships or field placements, and again 60 percent found the experience “very useful.” While 70 percent of respondents indicated they completed legal skills coursework in law school, only one-third found the courses to be “very useful.”

Do “Law Schools Completely Misrepresent their Job Numbers”?
New Republic

The New Republic details how, in its view, “law schools completely misrepresent their job numbers.” Noting that there are two main sources for such information—US News & World Report and the National Association for Law Placement—the New Republic claims that there are many problems with the numbers, including (among other issues) that they do not adequately account for temporary employment, are based on self-reporting, and are not audited. The magazine concludes that “all of this suggests the extent to which prospective law students need more and better information.”

Twenty Percent Drop in Aspiring Solicitors After UK Law Society Warns Students of Job Risks
Guardian

In the wake of the recent recession, England’s Law Society proactively warned potential solicitors about the risks and costs involved with attempting to join the legal profession. According to the Guardian, the outreach “worked,” and “although the bar remains oversubscribed, enrollments on the legal practice course—the year-long course law graduates must take to become solicitors, which can cost more than £13,000—fell by 20 percent last year, as a belief that the country is over-lawyered took hold at schools and universities.” While a decrease in students occurred between 1995 and 1997 resulting in a “pay war” for available students, observers do not expect a similar outcome from the current student decrease given the present economic climate.



Law Firms & Practice Management

Law Firm Profits—and Survival—Less Certain as Legal Profession Changes
Economist

After more than a decade of growth, employment in the American legal industry has declined for the past three years in a row. According to the National Law Journal, the largest law firms shed more than 9,500 lawyers in 2009 and 2010. Legal process outsourcing (LPO) firms contributed to the decreased demand for lawyers. While work in certain sectors has recovered and profits have increased, some trends during the recession may endure, such as: (1) client pressure to keep bills low; (2) the impact of globalization on lawyers as emerging markets grow; and (3) the use of technology to replace lawyers for certain functions. The Economist predicts that one type of firm is most likely to thrive in the new economic environment: elite New York-based firms that expand their horizons beyond Wall Street and across the globe.

The Legal Profession’s “Biggest Merger” has “Gone Remarkably Well” but Challenges Remain
Times

A year after the legal profession’s “biggest merger”—between Lovells and Hogan & Hartson—the co-chief executive of the new Hogan Lovells, David Harris, reflects on the merger and the changing global legal landscape. The merger, which was completed in May 2010, created the world’s seventh-biggest law firm, with 2,500 lawyers and annual revenues of $1.6 billion. Hogan Lovells “was the largest of a handful of transatlantic combinations in the past few years that, some observers believe, are the first of a wave of mergers that will result as the globalization of the legal industry accelerates,” according to the Times. Harris says that after the merger “we saw an opportunity to reposition the firm on a global level, with a greater ability to compete with what we believe will be a much smaller number of global players for the high-end work.” One remaining challenge for the firm, according to Harris, is to “be recognized as competing effectively for the biggest M&A work.”

Percentage of British Firms Using LPOs Has Tripled in the Last Two Years
ABA Journal

The percentage of British law firms that outsource legal work has tripled from 5 to 15 percent in the last two years, according to a recent survey of 575 lawyers by Media Research Legal Week and Integreon, a legal process outsourcing provider. The survey also revealed that only 6 percent of in-house legal teams reported outsourcing legal work. Both law firms and in-house legal departments expect to increase legal outsourcing next year. The ABA Journal reports that “although cost pressure is the primary driver of LPO use, lack of consistent quality and data security concerns remain significant barriers.”

High-Cost Law Suits are “Back in Vogue”
Wall Street Journal Law Blog

“High-cost suits are back in vogue,” according to the Wall Street Journal. Litigation work is the law industry’s “single most important source of revenue,” comprising about one-third of all billable hours among US law firms during the first quarter of 2011 (corporate work was flat, while capital markets and bankruptcy work declined). While litigation had been thought to be a “counter-cyclical” practice, the recent recession showed that “many clients in fact shied away from high-cost litigation, most likely because the credit crisis constrained the availability of capital,” according to sources cited by the Journal.



Corporate Counsel

Judge Acquits Glaxo Lawyer of Making False Statements and Obstruction, Saying “Case Should Never Have Been Prosecuted”
New York Times and Courthouse News Service

In a high-profile case closely followed by corporate attorneys and pharmaceutical executives involved in overseeing corporate compliance, former GlaxoSmithKline lawyer Lauren Stevens was acquitted of making false statements and obstructing a federal investigation into illegal drug marketing. Instead of sending the case to the jury, U.S. District Judge Roger Titus acquitted Stevens, stating “the defendant in this case should never have been prosecuted and she should be permitted to resume her career.” According to Courthouse News Service, “the case marked the first time federal prosecutors had targeted an individual pharmaceutical executive for wrongdoing instead of an entire company.” As a result, the case had been monitored closely because it “ups the ante for pharmaceutical company lawyers and other executives whom the government suspects may be misleading the FDA during the growing number of investigations into drug company conduct,” according to the New York Times. Courthouse New Service, however, emphasized that the judge’s order “provid[ed] no clue as to the rationale behind his decision.”

Women of Color Suggest that Gender May be a Greater Obstacle In-House than Race
Corporate Counsel

Corporate Counsel Women of Color (CCWC) recently conducted a survey in which over half of the respondents found the corporate environment to be more inclusive than that of law firms, where many in-house attorneys began their careers. The survey of over 1,400 women of color also indicated that about one-third believed that race “impeded advancement,” while over half believed that that gender posed an obstacle. CCWC’s survey results were recently published in a report entitled, “The Perspectives of Women of Color Attorneys in Corporate Legal Departments.”



Globalization

China is the “Fastest Growing Legal Market in the World”
Law.com

In 2010, about 70 US law firms maintained offices in China, making it the second most popular destination for large law firms. US firms posted about 2,100 lawyers in China, but only 683 in Japan and 275 in Singapore. US firms still maintained significantly more lawyers in the UK than any other country, but one legal consultant calls China “the fastest-growing legal market in the world,” and expects that the numbers in China will continue to rise. While some firms moved into China too quickly and have suffered “growing pains,” the Chinese economy is expected to grow, leaving these offices with room to expand.

US and Chinese Firms Challenging UK Capital Markets Dominance in Hong Kong
The Lawyer

While British law firms have traditionally dominated capital markets work in Hong Kong, firms from mainland China and the United States are increasing their presence. “Shanghai powerhouse” law firm AllBright Law is exploring opening an office in Hong Kong; three other Chinese firms have already opened branches there. “US firms are also playing catch up,” according to The Lawyer, with Simpson Thatcher & Bartlett recently becoming the third US firm to “launch a Hong Kong capability” within six months (following Clearly Gottlieb Steen & Hamilton and Davis Polk & Wardwell). American and Chinese firms have become interested due in part to “a record year on the Hong Kong Stock Exchange last year [that] mainly benefitted UK firms, in particular Linklaters and Freshfields.”

Korean Legal Services Market Will Open to European Lawyers in July
Korea Times

In July 2011 the Korean government will permit lawyers from EU member states to practice in Korea. For the first two years European lawyers will be allowed to work as legal consultants at either Korean law firms or European law firms in Korea; moreover, European law firms will be able to establish business alliances with Korean counterparts, but they may not employ Korean lawyers. After July 1, 2016, Korea’s legal services market will be fully open to European law firms and lawyers.



Diversity

Top Employers for Women and Families Ranked by the Times and Yale Law Women
Legalweek.com and Yale Law Women

The Times has recently released its list of “Top 50 Employers for Women,” which includes three UK-based law firms: Freshfields Bruckhaus Deringer, Hogan Lovells and Addleshaw Goddard. Meanwhile, the Yale Law Women (YLW) organization has announced its 2011 list of the Top Ten Family Friendly Firms. The Times highlighted several initiatives to promote inclusion and advancement for women, covering such topics as bias recognition, mentoring and increasing partnership opportunities. Both lists considered parental leave programs, with YLW finding that women continue to use more leave than men, possibly creating a stigma for men who choose to spend more time with their families.

Almost Half of All Practicing UK Lawyers are Women, but only 1 in 5 Law Firm Partners are Women
Legal Week

Nearly half of all practicing solicitors are women, having represented the majority of law firms' trainees every year since 1999, according to a new report by the UK's Law Society. Legal Week observes that “despite the increasing numbers of women entering the profession, the rise is not reflected in partner promotions.” Women partners represented 6.8 percent of solicitors on the roll, or 21 percent of the number of women solicitors working in private practice. Moreover, the Law Society’s report suggests that “ethnic diversity is not increasing, with the number of black and minority ethnic  trainees remaining relatively static at around 20 percent over the last few years rather than increasing,” according to Legal Week.



Ethics

King and Spalding Withdraws from Defending Marriage Act; Partner Resigns in Protest
New York Times

King & Spalding, which had recently agreed to represent Republicans in the US House of Representatives in defending the constitutionality of the Defense of Marriage Act (DOMA), withdrew “amid pressure from gay rights groups” who had “fiercely criticized the law firm,” according to the New York Times. King & Spalding’s withdrawal caused partner Paul Clement—a former US Solicitor General—to resign, explaining that “representation should not be abandoned because the client’s legal position is extremely unpopular in certain quarters.” Clement will continue the representation at a new firm, Bancroft PLLC. NYU Professor Stephen Gillers, an expert in legal ethics, opined that “[King & Spalding’s] timidity here will hurt weak clients, poor clients and despised clients.” But others note that the firm did not cite pressure from gay rights groups in its decision to withdraw and that it might have discontinued the representation in part due to an unusually restrictive provision in the client contract “prohibit[ing] the firm’s lawyers from any advocacy for or against bills that would change or repeal the marriage act,” according to the Times.

Should Lawyers Serve on Client Boards?
American Lawyer

The American Lawyer examines “whether any lawyer … can fairly and neutrally provide independent legal counsel for a corporate client while also serving as a member of the company’s board.” Using the example of Ronald Olson, a named partner at Munger, Tolles & Olson who has served for 14 years on the board of Berkshire Hathaway, a client of his firm, the American Lawyer questions whether “such a dual relationship with a company is rife with potential conflicts and ethical quandaries, both obvious and more ambiguous.” Some firms now prohibit the practice, and “while it was once common for lawyers to serve on their client’s boards, ‘today, it’s the exception rather than the rule,’” according to the American Lawyer (quoting AON Risk Service’s Douglas Richmond).



Public Interest Lawyering

New York’s Chief Judge Calls Pretrial Jailing of Unrepresented Defendants Intolerable, Pledging $10 Million for their Legal Defense
New York Times

In a speech to the State Court of Appeal, New York’s chief judge, Jonathan Lippman, stated that “the arraignment and pretrial jailing of defendants who are not represented by counsel is a fundamental failure that can no longer be tolerated in a modern, principled society governed by the rule of law,” and pledged $10 million of state money to improve the availability of legal defense provided to the poor. The monies would be distributed by New York’s Office of Indigent Legal Services, created only last year and charged with improving the quality of legal representation provided to indigent defendants.



Professional Development

“JD Match” Seeks to Match Law Students with Firms
Wall Street Journal Law Blog

A new service, “JD Match,” seeks to link law students looking for jobs with law firms while avoiding the time and expense involved in the current law school hiring process. According to the Wall Street Journal, JD Match will “match law students with firms, much in the way matching services pair up medical students and residency programs,” although the results will not be mandatory. Students will pay $99 per recruiting season, upload their information and select their preferred firms, while law firms will in turn rank participating students. On “match day” the company will use a proprietary algorithm to match students and firms. According to the Journal, JD Match “could expose students to firms that they might not otherwise consider, and expose firms to students that they might have had a hard time otherwise recruiting.”



PROGRAM NOTES

New PLP White Paper—Corporate Purchasing Project: How S&P 500 Companies Evaluate Outside Counsel

This report marks the culmination of our Corporate Purchasing Project —more than four years of scholarly research dedicated to examination of the ways in which S&P 500 legal departments hire and manage outside counsel, drawing from six academic papers in various stages of publication. How are relationships between clients and service providers in the corporate legal market evolving, and why? Our novel empirical data is drawn from surveys and interviews of 166 chief legal officers (“CLOs”) of S&P 500 companies—one-third of all such large publicly traded companies.

Specifically, we sought to explore four topics of substantial importance about which there is little systematic information:

  • How do these companies evaluate the quality of legal service providers when making hiring and legal management decisions?
  • Under what circumstances do these companies discipline or terminate their relationship with their law firms?
  • How do these companies evaluate whether to follow “star” lawyers when they change law firms?
  • In what ways do these companies manage the intersection between law and public relations?

Purchase the report.

Tell Us About Your Legal Mentor

We would like to hear specific examples of effective—and not so effective—legal mentoring practices and experiences.  To share thoughts and experiences with us, click here (this is not a full survey, but a link to a form where you can type freely about your experiences).  All individuals will remain anonymous, unless they wish to be identified.   If you have not done so already, please also take our anonymous, full-length legal mentoring survey here.

Indiana Law Professor Says “Milbank@Harvard” is “Investing Money to Make Money”

In an editorial published by the American Lawyer, Indiana Law School Professor William Henderson (who serves as the director of Indiana’s Center on the Global Legal Profession) examines the recently announced partnership between Milbank and Harvard Law School to provide firm lawyers with professional development training. As part of the program, called “Milbank@Harvard,” the firm will send its entire mid-level ranks (about 150 lawyers, 40 at a time) to Harvard Law School for eight days of intensive training. Henderson concludes: “Since law firms sell legal talent, a strategic investment in legal talent seems like a good place to start. Milbank@Harvard is evidence that at least one firm has figured this out.” Read the full editorial here, and read a related article in the ABA Journal here. Learn more about Milbank@Harvard here.

Executive Education: Leadership in Corporate Counsel

Harvard Law School Executive Education is offering an intensive, three-day program in June 2011 for general counsels and chief legal officers. This program offers insights into the challenges faced by GCs and provides concepts and skills necessary to be effective leaders in the world’s top corporations. For more information, contact Shironda White or visit the LCC website.

Executive Education: Leadership in Law Firms

Harvard Law School Executive Education will be hosting the ninth cohort of Leadership in Law Firms, September 15-20, 2011. Leadership in Law Firms is an intensive, five-day program that explores the dynamics of law firm management through thought-provoking case studies and lecture-discussions. Sessions help participants reflect on and learn the unique challenges of leading these organizations and develop perspectives and skills to be effective law firm leaders.

Participants in previous Leadership in Law Firms programs have come from leading law firms around the world. These are professionals who currently have, or are going to assume, management responsibilities (managing partners, senior partners, chairmen, chief executive officers, chief operating officers, executive directors, executive committee members, office heads, practice heads, sector heads) in their law firms. To ensure a collegial, small group setting, the class size is limited. To ensure a broad experience base, each firm is restricted to sending no more than 3 participants. Because space in each program is limited, registration fills up quickly. We are currently accepting applications. To apply, please visit our website.


Editor: Cory Way
Managing Editor: Nicola Seaholm
Contributing Editors: Amanda Barry, Hakim Lakhdar, Mihaela Papa, Erik Ramanathan


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