Outsourcing Firms Seek to Expand—to the United States
New York Times and Bar & Bench News
Even though career prospects “look dim” for young lawyers, there is “one glimmer of light” that “comes from a surprising direction,” according to the New York Times. “Outsourcing firms, the companies that in recent years added to the financial woes of the American legal profession by sending work to low-cost countries like India, are now creating jobs for lawyers in the United States.” For example, legal process outsourcing company Pangea3, one of the largest firms of its kind, announced that it plans to open a 400-employee facility in the suburbs of Dallas, Texas. The India-based company has sought to expand into the US since its acquisition by Thomson Reuters in November 2010. Mark Ross, a vice president at Integreon, an LA-based outsourcing company, explained that “the reality is that the United States and the United Kingdom have many lower-cost locations and good supplies of legal professionals,” particularly in the wake of the harsh economic climate of the past few years. Moreover, “there is some work that just cannot be outsourced to India,” according to Daniel Reed, chief executive of UnitedLex.
Lawyers “Nursing into Life” the “Rebirth of Hope” in Northern Ireland and the Republic of Ireland
In the wake of President Barack Obama’s visit to the Ireland, Edward Fennell writes in the Times that both Northern Ireland and the Republic “need renewed foreign investment to restore a sense of economic well being” and “that is why law firms with an international outlook are crucial to the selling of the island of Ireland to the wider world.” Fennell notes that “a cat’s cradle of outward-looking law firms has emerged linking Dublin, Belfast, Edinburgh and London to engage with the global economy,” and that Herbert Smith and Allen & Overy will soon open offices in Belfast. Fennell concludes that on the island of Ireland there is “a small rebirth of hope, which the lawyers are nursing into life.”
Is the End “Writ Large” for Local Law Firms in Britain?
Express Daily News
Sir Nigel Knowles, joint chief executive of DLA Piper, tells the Express Daily News that the UK’s Legal Services Act, which becomes effective in October and significantly expands competition for legal services, will cause “a huge swathe of high street solicitors [to] go.” Knowles believes that local law firms will find it challenging to compete with large businesses and other professional service firms, and will “have to get a strategy and run themselves like a business” in order to survive. Knowles also opines that “more consolidation is coming over the next 15 years … because no law firm has more than 1 percent of the market in terms of revenue.”
Russia’s Regulation of Foreign Lawyers is “About as Liberal as it Could Be”
Russia has one of the most liberal regulatory environments for lawyers in the world. Transactional lawyers, whether foreign or domestic, can practice with almost no restrictions. According to John Goodwin, managing partner of Linklaters’ Moscow office, “as far as the legal profession is concerned it’s about as liberal as it could be.” Many domestic lawyers and policymakers, however, argue that some regulation is needed. But major change may be unlikely in the near future, since the country will soon accede to the WTO and many overseas interests are “keen to ensure that the Russian legal market remains open for foreign firms,” according to The Lawyer.
Association of Indian Lawyers Sues Arbitration Court for “Defying” Indian Justice System
Only a year after the Association of Indian Lawyers served 31 foreign law firms with a petition to prevent them from operating in India, AIL has filed a case against the Delhi-based London Court of International Arbitration (LCIA). AIL accuses LCIA of creating a system of legal administration that “defies” the Indian justice system by formulating a “system of delivery of justice” that opposes the laws of India and violates the Indian constitution. AIL also alleges that LCIA is practicing foreign law under the guise of arbitration.
Arbitration in Brazil Dramatically Increases, Creating Strains
International Law Office, Globe Business Publishing
The number of cases administered by arbitration institutions in the last five years has dramatically increased in Brazil. Although some believe that the Brazilian judiciary displayed early resistance to arbitration, courts have recently enforced arbitration clauses and granted injunctions assisting arbitrations. Nevertheless, the increased use of arbitration may be creating strains as the number of arbitration cases appear to be outpacing available staff and arbitrators.
Ogilvy Renault Becomes First National Canadian Law Firm to Join a Global Practice but Loses its Storied Name
Last November the Canadian national law firm of Ogilvy Renault announced that it would join the Norton Rose Group—a global law firm based in London—and this month Ogilvy’s name “disappeared for good” as the merger completed. John Coleman, former managing partner of Ogilvy (who will continue in that role for Norton Rose in Canada) explained that “trying to find a way to grow [ ] Canadian firms abroad … was one of the rationales for Ogilvy Renault’s decision to combine with Norton Rose, becoming the first national Canadian firm to join a global legal practice.” The Montreal Gazette reports that many in the Canadian legal community were surprised that the firm ultimately surrendered its name, however, particularly since “the Ogilvy Renault brand has always equated with the ‘gold standard of the profession, a very venerable firm in that it was very successfully identified as a Quebec firm, the best of chez-nous.’”
Innovation & New Models
Non-Partner-Track Lawyers: “Second Class Citizens” or More Civilized Positions?
New York Times
Some of the nation’s largest law firms are creating a “second tier of workers, stripping pay and prestige” as part of “a fundamental shift in the 50-year-old business model for big firms,” according to the New York Times. These non-partner-track lawyers perform similar work to traditional associates but often earn less than half the pay. Firms experimenting with this new category of “career associates” include Orrick, Herrington & Sutcliffe, WilmerHale and McDermott Will & Emery, to name a few. Orrick’s chief executive explained that “it’s our version of outsourcing, except we’re staying within the United States.” While critics of the program allege it creates a lower tier of “second class citizens,” one participating associate praised the option because “I’m not killing myself to be hitting specific numbers” and “now I’m always home for bedtime.”
Trademarkia Offers Low-Cost Trademarking, but Some IP Lawyers are Raising Concerns
Since 2009 Trademarkia’s web-based trademarking service has streamlined—and lowered costs for—trademark filing, a process for which some lawyers have charged $150 to $500 per hour. According to co-founder Raj Abhyanker, Trademarkia’s major technological innovation is a powerful search engine that mines the U.S. Patent and Trademark Office database more efficiently than the government’s own search tool. “After agreeing to pay $159, the user fills out the trademark application and Abhyanker’s 20-attorney Mountain View, Calif., law firm reviews it to determine its chances for being granted,” according to Bloomberg, resulting in a total cost to users of about $500 (including government filing fees). Critics, including intellectual property lawyers, have alleged that Trademarkia does not clearly disclose to clients that they are hiring Abhyanker’s law firm and that applications may not succeed (or may face complex challenges).
Tomorrow’s “Great Lawyers” May be “System Designers”
Paul Lippe, founder and CEO of Legal OnRamp, argues that “law is evolving from an activity that is an occasional part of an organization’s life (think an appellate argument in a company’s patent defense suit) to an activity that’s ongoing and embedded (think how a drug company which holds customer data has to manage the security and privacy of that information around the world).” Lippe contends that if lawyers persist in the “traditional” model of lawyering the “law can only get more expensive, less effective and more marginalized,” while forward-thinking lawyers “recognize law as a system of information and management, where their challenge is to impact the outcome for lots of distributed actors in a complex system where law is only one part.”
Law Firms & Practice Management
“Super Tier” of 23 Law Firms Emerges
Wall Street Journal
The Wall Street Journal's Law Blog reports that “a super-tier of 23 firms is starting to distance itself from the rest of the AmLaw 200 pack when it comes to profitability.” For example, average partner profits at the “T-23” firms was $1.1 million higher than the average of the next 27 most profitable firms—a “profit chasm” that has doubled in the last decade. The Journal cites an estimate that the T-23 claim 50 percent of “price-is-not-an-issue” assignments, leaving the remaining 177 firms to “subsist” largely on more price-sensitive matters. “The moral of the story,” according to the Journal, is that “the T-177 firms need to come up with innovative ways to lower their costs [and] to better compete for price-sensitive matters.”
Partnership Promotions Increased by 38 Percent Across the UK’s 50 Largest Firms
Legalweek reports that partner promotions across the UK’s 50 largest firms (by revenue) increased by more than a third in 2011, “buoyed by growing market confidence and a cluster of transatlantic mergers.” Partner promotions in this group of 50 firms totaled 495 globally this year—compared with 358 in 2010—an increase of 38 percent.
While Most Firms Offer Part-Time Lawyering, Few Take Advantage of the Option
National Jurist and NALP
According to the National Association of Law Placement (NALP), nearly 98 percent of law offices featured in NALP’s directory offered part-time schedules in 2010, but only 6.4 percent of lawyers have taken advantage of the option. Of the lawyers choosing part-time schedules, 70 percent were women. In addition, part-time partners in Chicago and the District of Columbia are more than twice as common than in New York City. NALP also found that nearly half of the law offices that offered part-time options excluded entry-level associates from participating.
U.S. Government Often Relies on Companies to Investigate Themselves
The U.S. Department of Justice and Securities & Exchange Commission may be increasingly relying on the very companies under suspicion to conduct investigations regarding potential misconduct. The practice appears to be most common in cases involving foreign corruption, but also includes domestic investigations regarding a wide variety of legal issues. According to the Washington Post, “the corporations, sometimes at the request of the government, hire teams of lawyers and accountants to interview employees, gather electronic records and sift through documents,” with the government reviewing the results and deciding “whether further legwork is warranted—and, ultimately, whether to pursue charges.” Defenders of the practice note that these internal investigations save the government hundreds of millions of dollars, but critics allege that corporations can sanitize findings and the government “is often far better situated to collect evidence.”
Corporate Counsel Success Requires Teamwork Skills, While Law Firms Often Reward Individualism
Teamwork is essential to success in corporate counsel departments, while individual accomplishments and competitiveness tend to be valued more highly in law school and law firms (where many attorneys “cement” their working style), according to Inside Counsel. Rich Baer, former general counsel at Qwest, encourages companies to search for “emotional intelligence—people who relate well to other people, which is not necessarily the strong suit of many lawyers.” Inside Counsel also recommends increasing diversity by overcoming “bias in pedigree” and recognizing, in the words of one general counsel, that companies “need diverse qualifications, backgrounds and thought processes in the people” they hire.
Women Increasingly Ascending to Law Deanships
National Law Journal
An ABA Report in 2009 found that women constituted 62 percent of assistant deans, while only 21 percent of law deans. But women have made a strong showing in recent law school dean searches, accounting for about 40 percent of the deans named in recent months (for example, at the universities of Arkansas, Wisconsin, and Richmond, as well as at St. Louis, Gonzaga, Loyola and Pepperdine universities). Pace Law School professor Ann Bartow told the National Law Journal that having a woman at the helm of a law school sends a strong message that women are as qualified as men in legal academia.
Diversity Increasing within U.S. Supreme Court Bar
The Legal Intelligencer reports that while “the most established titans of the private Supreme Court bar—the ones with more than 50 arguments to their belt—are all white males,” the “demographics of the Supreme Court bar are changing,” with increased diversity with respect to gender, ethnicity, age and other factors. This diversity is partly the result of “the proliferation of Supreme Court practices in top firms,” as well as increasingly diverse attorneys in the U.S. Solicitor General’s office, which regularly appears before the U.S. Supreme Court. However, “even though other kinds of diversity are flourishing, African-Americans are still a rarity at the high court,” according to the Intelligencer.
Percentage of Minority Attorneys Increases Slightly in 2010
In 2010 large firms increased their percentage of minority attorneys by 0.2 percent, to 13.9 percent, according to the American Lawyer’s most recent “Diversity Scorecard.” The American Lawyer reports that “this small jump is noteworthy because it halts the dip seen last year, when law firm diversity dropped for the first time in the decade that we’ve collected these numbers.” The 2010 Scorecard’s top five firms in terms of diversity (from first to fifth) are: Wilson Sonsini, White & Case, Munger, Tolles & Olson, Clearly Gottlieb Steen & Hamilton and Lewis Brisbois Brisgaard & Smith.
ABA Proposing “Significant Policy Shift” for LL.M. Curriculum Requirements
National Law Journal
The ABA’s Section of Legal Education and Admissions to the Bar has proposed specific curricular requirements for LL.M. programs that are designed to help foreign lawyers gain eligibility to take a bar in the United States. According to the National Law Journal, individual states that adopt the ABA’s proposed requirements could then permit graduates of those LL.M. programs to sit for their bar exams, which would result in an expansion of states admitting foreign attorneys (currently few states beyond New York and California allow “the LL.M.-to-bar exam path”). While LL.M. programs have traditionally been largely unregulated, “if approved, the ABA initiative would represent a significant policy shift.”
Law Student Transfers Can be Costly for “Spurned Schools”
National Law Journal
In an article published in the Journal of Legal Education, South Texas College of Law Professor Jeffrey Rensberger systematically analyzed the numbers and patterns of law student transfers and the resulting costs to legal education generally, concluding that “the transfer system is inefficient and causes more harm to the schools students leave than benefits to the schools to which they transfer,” as summarized by the National Law Journal.
Attorney Regulation & Ethics
SEC Enforcement Chief Warns of Line Between Aggressive Representation and Obstruction of Justice
New York Times
Robert Khuzami, Director of Enforcement for the Securities & Exchange Commission, recently highlighted questionable behavior by defense lawyers. He cited examples in SEC enforcement proceedings ranging from an attorney tapping a witness’s foot to signal how the witness should testify, to the apparent advice of counsel to a client to respond—more than 500 times in two days—that he did not remember. According to New York Times "Dealbook" reporter Peter Henning, Khuzami’s “message is clear: be careful how you represent your clients or they may pay the price,” particularly since “the credibility of defense lawyers can affect any recommendation the [SEC’s] enforcement division makes regarding proceedings against a company or individuals for violating the securities laws.”
Worst Job Market for Law School Graduates Since 1996
The market for law school graduates is the worst since 1996, according to a recent report from the National Association for Law Placement (NALP). Overall employment numbers—nine months after graduation—were 87.6 percent, the lowest since 1996 (87.4 percent). In addition, many of those employed had yet to find full-time, permanent work and settled for part-time or temporary positions. Moreover, only 68.4 percent—the lowest percentage on record—of the jobs secured by recent law school graduates required a law degree. According to NALP Executive Director James Leipold, the challenging job market is partly due to reduced summer associate programs from many of the nation’s largest firms—traditionally a significant employment pipeline.
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.
Research Assistants Needed for Legal Profession Diversity Project
Professor David Wilkins is looking for one or more summer RAs to work with him on a project on diversity in the legal profession, with a particular emphasis on the careers of black corporate lawyers. The project builds on Professor Wilkins’s extensive scholarship in this area (including most recently his 2010 article “The New Social Engineers in the Age of Obama: Black Corporate Lawyers and the Making of the First Black President”) and involves research on the current diversity in large law firms, in-house legal departments, and other parts of the corporate sector of the legal profession, as well as the role that black corporate lawyers are have and continue to play in various sectors of this country’s political, social, and economic life. It is not necessary that the RAs reside or work in Cambridge, but they must have access to Lexis/Nexis or other similar online research tools and be willing to devote significant time to the project during July and August. There will be an opportunity to continue working during the academic year. As Professor Wilkins will be out of the country for most of June, all resumes and questions should be directed to Erik Ramanathan, Executive Director of the Program on the Legal Profession, at email@example.com.
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.
Executive Education: Leadership in Corporate Counsel
Harvard Law School Executive Education will host its third cohort of Leadership in Corporate Counsel June 22-25, 2011. Twenty-eight general counsels and chief legal officers from all over the world are expected to attend the three-day event. Participants will develop a holistic understanding of the challenges facing, and the skills and perspectives required of, effective corporate counsel leaders. For more information, visit our website.
Executive Education: Leadership in Law Firms
Harvard Law School Executive Education recently hosted the eighth cohort of its flagship program, Leadership in Law Firms. The program attracted 48 attendees, the large majority from the US and the UK. Other countries represented include Sweden, Ireland, India, Spain, Singapore, Australia, Brazil, Ukraine, Lithuania, Russia, Germany, Canada and Nigeria. The next program will be held September 15-20, 2011. We are currently accepting applications. To apply, please visit our website.
Editor: Cory Way
Managing Editor: Nicola Seaholm
Contributing Editors: Amanda Barry, Monet Brewerton, Nathan Cleveland, Hakim Lakhdar, Mihaela Papa, Erik Ramanathan
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