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

Globalization

Terrorist Groups Target Indian Judiciary
The Times of India

On September 7, 2011, a deadly bomb went off at a busy gate of the Delhi high court killing 11 people and leaving 76 others injured. The Chief Justice as well as representatives from the Bar Council of India, the High Court Bar Association, and the Jorhat Bar Association condemned the incident and sought the government to provide adequate security to the courts. Senior advocate Prafulla Borua commented, “It is a serious cause of concern that the terrorist groups are now targeting on Judiciary and they have successfully performed their subversive activities in spite of having tight security cover. The government, Judges and lawyers should come forward to discuss this matter in order to protect the judiciary from the terrorist groups.”

Korean Law Firm Shin & Kim First to Open Shop in the EU
Korea Joongang Daily

Following the start of the free trade agreement between the European Union and Korea, a major Korean law firm Shin & Kim, established in 1981, will enter Europe’s legal services market by opening shop in Munich, Germany. Alexander Son (Son Dong-wook), a Korean-German specialist in intellectual property and copyright law, is at the center of the endeavor. According to the Korea Joongang Daily, Son believes that as the invasion of British and American law firms in Korea’s legal services becomes a reality, their firm cannot be worried how to defend itself but needs to venture abroad to be at the same level as British and American law firms.

The Asian-Pacific: A New Legal Frontier
Legal Week

Top tier law firms have set their sights on the Asian Pacific. Ashurst, Clifford Chance, Hogan Lovells, and Linklaters have all released plans to increase their Asian Pacific business. The opening of Indonesia and South Korea to UK law firms has allowed Linklaters to plan expansion in the region over the next four years. Ashurt hopes to increase its overall presence in the area from 7% to 10% of revenues. Geoffrey Green of Ashurst Asia explains, “Asia is one of few markets offering opportunities for growth.”

International Law Firms Benefit from Asian Anti-Corruption Cases
Law.com

As many multinationals’ Asian operations are under increasing scrutiny, international law firms are obtaining more work related to the Foreign Corrupt Practices Act (FCPA). While the Maxwell Technologies Inc., IBM, and Diageo cases grab headlines, law firms are considering their response to this emerging trend. Some firms such as Debevoise & Plimpton and Kirkland & Ellis are placing litigators who are experienced with investigations work on the ground in Asia. Other law firms, namely Davis Polk & Wardwell and Simpson Thacher & Bartlett, argue that the flow of business is episodic and that sustaining a profitable or stand-alone FCPA practice will be difficult.

Capital Markets Lawyers Face Slowdown in the Asia-Pacific Region
The Asian Lawyer

The Hong Kong market has been the top destination for initial public offerings (IPOs) for the past two years, but has been facing a downturn. The Hong Kong stock exchange lost almost 15% of its value in the last month and two major planned IPOs, China Everbright Bank and China Guangfa Bank, have been postponed. However, international law firm executives in Hong Kong generally do not seem worried because this seems to be an episode, not a collapse, and their focus is not on the short-term. Instead, they tend to view Asia practices as strategic long-term investments in rapidly growing economies.



Corporate Counsel

Ethics and the Role of General Counsel
Legal Week

A Deloitte Global General Counsel 2011 Report, How the Game Is Changing, presents results from a survey of almost 900 private and public legal sector heads across ten countries. The report compares current data with data from five years ago, and reveals that companies now turn, in the first instance, to their GC rather than outside counsel for advice on serious legal or regulatory risk (82% now compared to 59% five years ago). Additionally, GCs believe their advice on such issues carries more influence than that of any partner in an external law firm (71% now compared to 35% five years ago). Tom Kilroy, GC at a UK software company, highlights several ways lawyers can be good ethical gatekeepers of a company stating, “I don’t think in-house counsel, particularly in British companies, have been nearly explicit enough in defining their role when it comes to risk.”



Diversity

Institute Finds Diversity Efforts Produced Modest Results
National Law Journal

According to a report produced by the Institute for Inclusion in the Legal Profession actual racial diversity has grown very slowly, despite the increased focus on it in recent years. The report indicates that the percentage of minorities in the legal profession increased from 9.7% to only 11.6% between 2000 and 2009. The report includes data from academic studies as well as government statistics, and includes 11 essays on various diversity topics, such as barriers facing Latinas in the profession, challenges individuals with disabilities face in law school, and pressures confronted by black attorneys.

Momentum One Program Aims to Ease the Transition from Parental Leave to the Office
Careerist Blog

AbilTo, a behavioral health consultancy firm, is now working with the law firm O’Melveny & Myers to provide transitional counseling services to new mothers and fathers returning to work after parental leave. Voluntary participants in the “Momentum One” program work with one of AbilTo’s social workers, who are called “transition specialists,” by weekly videoconference. During the meetings, which take place in the final weeks of parental leave and the first four weeks after returning to work, the specialists and attorneys develop strategies for a smooth transition back to the office so the new parents can create and maintain an appropriate work-life balance.

Disabled Lawyers Still Face Access Barriers & Discrimination
Guardian.co.uk

While many firms have made commitments to diversity and inclusion in the workplace, would-be attorneys with disabilities continue to have a hard time gaining entry to the field. This was especially true prior to the passage of Equality Act 2010 in the UK, which gives individuals with disabilities the right not to be discriminated against. According to Jonathan Holbrook, a tribunal judge with cerebral palsy, “The first step has, and always will be, the most difficult challenge. With experience, you develop a track record that makes it easier to demonstrate that your disability doesn’t affect your ability as a lawyer.” While those who have been successful in securing jobs praise the support they have received from their firms since joining, more could still be done to attract and hire talented graduates like them in the first place.

ABA Wants Proof of Native American Status at Law Schools
Law.com

A discrepancy between American Bar Association (ABA) numbers and U.S. Census data indicates that increasing numbers of law school applicants are falsely reporting themselves as Native American. Between 1990 and 2000, 2,600 Native American students graduated from ABA accredited law schools while numbers from the U.S. Census reveal that Native American attorneys increased by only 200 during that period. In response, the ABA’s House of Delegates recently approved a resolution urging the Law School Admissions Council and ABA-approved schools to require additional information, such as tribal affiliation, tribal enrollment number, or a “heritage statement” from those identifying as Native American on LSAT or law school applications.

Freshfields seeks a “Smart Balance” in its Austrian and German Offices
Legal Week

In an effort to increase gender diversity and flexibility in its Austrian and German offices, Freshfields Bruckhaus Deringer has launched a new “Smart Balance” plan. The scheme adopts a three-pronged approach by introducing “milestones” into associate development thus moving away from the rigid lockstep system, implementing flexible working plans, and increasing partner-mentoring systems. The rationale behind the plan is to create cohesive change in order to become more attractive for elite and promising lawyers.



Innovation & New Models

Google’s Investment in Rocket Lawyer: A New Boost for Online Legal Services?
The Connecticut Law Tribune

Legal services is one of the last industries to commit to commoditization on the Web, but the advent of Internet companies like LegalZoom and Rocket Lawyer illustrates this is quickly picking up. LegalZoom did $60 million in business last year, but also faced litigation for accusations of practicing law without a license. Rocket Lawyer, another online legal service, enables consumers to fill out documents, store and share them on the Web for only $19.95 per month, and have their documents reviewed by a lawyer or obtain legal advice at no additional cost. The most recent boost for such practices is the Google Ventures’ decision to invest $18.5 million in Rocket Lawyer, which will help its promotional efforts and enable it to access new money and Google technology.

More Law Firms Providing Business Education and Training for Associates
Wall Street Journal Law Blog

Partly in response to companies’ increasing requests for “no-first-or-second-year” associates, law firms continue to adopt programs aimed at better preparing and training their young associates for practice. The Pulse previously announced the development of the Milbank Program at Harvard Law School Executive Education. The Wall Street Journal Law Blog now reports that Debevoise & Plimpton and Skadden, Arps, Slate, Meagher & Flom have engaged Fullbridge, a business education program, to provide intensive business management and financial accounting training for their newest lawyers.

New Smartphone Apps Enhance Recruiting Efforts
New York Times

Skadden, Arps, Slate, Meagher & Flom has developed Skadden Start Here, a free iPhone app that helps new recruits through the Skadden job application process. The app, developed to enhance Skadden’s marketing efforts, allows users to learn about the firm and access biographies and contact information of firm hiring and recruitment managers. Other firms including Benesch Friendlander Coplan & Aronoff and Morrison & Foerster have also released smartphone apps.

Flying Solo With the Help of New Incubator Programs
The National Law Journal

The City University of New York (CUNY) School of Law was the first of the few schools now introducing an “incubator” program, which encourages recent graduates to establish solo practices while providing free or low-cost legal services to underserved communities. Fred Rooney, the director of CUNY’s solo-focused Community Legal Resource Network, has traveled around the U.S. and world to present on the success of this program and has observed that “law schools all around the country are very interested in providing these services to their graduates,” and that “at a time when job opportunities are dismal, incubators offer a chance to create jobs for new lawyers.”

Tweeting for Lawyers
New Jersey Law Journal

The New Jersey Law Journal explores twitter activity in the world of law firm practice and how this new social networking media can help to improve visibility. Among AmLaw 100 firms, 78% have at least one firm account but most do almost no tweeting at all. Tweeting openly is advocated, while doing it within protected network environments is found inefficient. An important question for law firms to consider before they start tweeting is who is the intended audience? Some firms have created twitter accounts by practice areas rather than a single twitter account for the entire firm. The author recommends that individual attorneys in firms be taught to start their own twitter accounts.



Law Firms & Practice Management

Are Law Firms Inflating Profits?
The Wall Street Journal

According to an analysis by Citi Private Bank Law Firm Group, a major lender to law firms, in 2010 approximately 22% of the top 50 firms overstated their profits-per-partner (PPP) figures by more than 20%. Additionally, 16% of firms inflated their PPP figures by 10-20%. Citigroup disclosed the results to an audience of chairpersons and managing partners of the largest and most profitable law firms. U.S. law firms are not obligated to disclose publicly their financial data, yet many choose to provide the American Lawyer with their equity partner head-count, net operating income, and gross revenue. In the past, Citi has found discrepancies between its data and AmLaw 100 profits. According to David Wilkins, Director of the Program on Legal Profession at Harvard Law School, “even an honest calculation isn’t easy because the firms are using revenue projections and have partners moving in and out.”

Pay Continues to Rise despite Demands for “Leanly Staffed” Law Firms
The American Lawyer

As law firms continue to respond to sustained effects of the economic recession, midlevel associates find themselves being spread thin and working considerably more than before. According to a 2010 “American Lawyer” survey of 5,361 midlevel associates from 149 law firms, the average law firm composite score changed very little from the previous year’s results—that is, except in areas relating to work distribution and law firm staffing. Dissatisfaction with workloads and staffing were apparent, but were quickly overshadowed by the fact that the average base salary for midlevel associates was the highest in five years and represented a 4% increase from 2010 to 2011.

How Much Is Enough to Make Them Stay?
The American Lawyer

As law firms face cost pressures from clients to explore alternative business models, they are striving to retain talented associates, no matter the cost. AmLaw 100 firms find themselves trying to outdo their competitors by providing their workers with significant pay raises and ambitious bonus plans. When Joseph Shenker, chairperson of Sullivan & Cromwell, announced that the firm would be awarding class-based spring bonuses, within a week both Simpson Thatcher & Bartlett and Clearly Gottlieb Steen & Hamilton announced identical class-based bonuses. The American Lawyer refers to this as a game of follow-the-leader and that “data from two years of surveys of midlevel associates suggests that these bonuses have minimal impact on associates’ morale or their willingness to stay at a firm.”

Favoritism-Based Promotions
The Wall Street Journal

With all the time, money, and effort put into one’s legal education, one might assume that an individual’s successes will be based on abilities, achievements, or potential. However, a new report from Georgetown University’s McDonough School of Business and the research firm Penn Schoen Berland, highlights that 84% of the interviewed 303 US senior business executives report that favoritism in how workers are promoted occurs at their organizations. Among those interviewed, 23% acknowledged having practicing favoritism and 9% say that it was a factor in their last promotion. Although many firms have procedures in place to avoid such behavior, it remains common and can have significant effects on staff and morale.

Hiring Practices of New Lawyers in the Chicago Landscape
Chicago Lawyer

In a roundtable discussion, three Chicago lawyers who are either members of their firm’s management committee or managing partners—Linda Meyers (Kirkland & Ellis), Bert Krueger (Mayer Brown), and Michael Morkin (Baker & McKenzie)—share their reflections on hiring and recruiting during a tough economy. Myers states that, “what matters most is what sort of academic performance you’ve had at the law schools,” and that “the other trend we’re seeing…is work experience before you go to law school.” Krueger highlights that “practicing law is really a team sport, so people who have been out working with companies…gain a level of self-confidence.” Morkin identified the need for incoming lawyers to be committed to the profession to prevent turnover, and discusses how some law schools are collaborating with potential employers by developing internship programs for students to learn from in-house counsel.

Washington-area Law Firms Hiring Strong, Despite National Contraction
The Washington Post

Many of Washington’s largest law firms are showing steady recruitment efforts for next year’s summer associates, which suggest the regions market for new lawyers is robust, compared to the contracted market for legal services nationally. While hiring across all these Washington area firms is down from pre-recession levels, most are on track to hire a similar number of summer associates for summer 2012 as they did this year, which indicates they feel the legal services market will hold steady until fall 2013. While firms like Wiley Rein are keeping the number of summer hires consistent (at 15) from the previous two years, both Akin Gump (up to 17 this year from 11) and Finnegan (up to 17 from 15) are adding more associates and looking to continue to expand in the coming years as well.



Attorney Regulation & Ethics

Should Entry into the Practice of Law be Deregulated?
Wall Street Journal

In a recent Wall Street Journal opinion piece, Clifford Winston and Robert W. Crandall recommended the deregulation of entry into the legal profession. The co-authors of the book First Thing We Do, Let’s Deregulate All the Lawyers (2011, Brookings Press) argue that certain services provided by lawyers, such as patent applications and uncontested divorce documents, do not require three years of legal education and should not require bar admission. Winston and Crandall point to several examples of what they consider successful deregulation initiatives, including the air travel industry and wireless telephone services. They believe that these industries have become more innovative and now provide better services for lower prices; if the legal profession was deregulated, consumers of legal services would see similar innovation and cost reduction.

The Canadian Legal Profession by 2017
The Governor General of Canada Website

In a speech to the Canadian Bar Association, the Governor General of Canada and former dean, law professor, and president at several Canadian universities, David Johnston, considers the question of what the lawyer as a professional would look like in 2017. In focusing on the relationship between the lawyer and legal education Johnston states, “We have allowed too great a divide to develop between academia and the profession.” He argues that there is a need for legal professionals to learn three apprenticeships that include the cognitive, practical, and ethical-social and that it “should start with how we choose an entering class.” Drawing lessons from the medical school model of how candidates are selected and taught professional responsibility early on in their education, Johnston states that “we should not leave the practical and the ethical apprenticeships to the end—articling and the bar admission course.”

Disclosure Requirements for Lawyer-Legislators in New York
New York Law Journal

According to the New York Law Journal, 63 of the 212 legislators in the state of New York hold law degrees. Now, under a new law, lawyers who serve in the New York legislature will be required to disclose any client who has paid a legal fee of $10,000 or more over the course of the year. The New York law does not apply, however, to other elected officials. In the states of Washington and California the disclosure requirement does not apply only to lawyers in the Legislature, but to all elected officials. According to Nancy Krier, general counsel to the Washington Public Disclosure Commission, “it has become an expectation here that people will know the sources of income for their elected officials and will be in a better position to analyze whether there is a potential conflict of interest.”



Legal Education

Misrepresenting Job Market Success of Law Graduates
Fortune

More individuals are beginning to question the authenticity of information that law schools provide regarding the success of their students in the recession-afflicted job market. Some disgruntled students are asking courts to stop what they argue is fraudulent advertising. According to Fortune, two factors exist that may drive law schools to such practices. First, law schools are heavily influenced by rankings in popular media that shape students’ choice of law schools, and their rankings are determined by the information they supply about the success of their students in the job market. Second, graduates do not have the needed motivation to reveal their real position in the job market because it might adversely affect the reputation of their signaling instruments, i.e., their law degrees and the brand equity of their law schools.

ABA Section Proposal Intends to Prevent ‘Bait and Switch’ Scholarships
The ABA Journal

The ABA Section of Legal Education and Admissions to the Bar disclosed its plan to require law schools to publish online the percentage of students whose scholarships are being renewed. The ABA section, which works independently from the larger ABA, stated, “this information will permit entering students offered scholarships to fully understand both the requirements for renewal and the likelihood they will meet those requirements.” There has been some major controversy regarding the “bait and switch” approach that law schools have established regarding students and scholarship opportunities. Painting a clearer picture ahead of time may possibly save students from being caught in such a trap.

Decreases in Job Placement for the Legal Field in August
ABA Journal

The ABA Journal reported data from SimplyHired.com, the world’s largest job search engine, that the legal field is the most difficult industry for placement with job openings having dropped 1.9% in August 2011. Whereas there is less than one job for every 100 working lawyers, there are 64 open jobs in occupational therapy for every 100 people working in the field. According to the press release issued by SimplyHired.com, whereas 13 industries saw increases in hiring during August, the four industries experiencing challenges with job placement, in addition to law, were travel, military, real estate, and non-profit.



Public Interest Lawyering

Bidding System for Indigent Clients in Tennessee
Tennessean

In an effort to curb Tennessee’s fast growing indigent defense budget, the state’s Supreme Court is considering a proposal to allow the Administrative Office of the Courts to solicit bids and award contracts to lawyers or firms to “provide legal services to indigent persons for a fixed fee.” Numerous critics claim that a flat-fee contract system will put lawyers out of work, undermine local judge authority, and deny poor citizens effective counsel. David J. Carroll of the National Legal Aid & Defender Association is one of those critics, commenting that in a fixed fee system “it is in the lawyer’s personal interest to devote as little time as possible to each case and pocket the fee.” Tennessee has seen its indigent defense fund grow from $19.9 million in 2004-2005 to $37.5 million today; prompting the search for cost-saving solutions like this one.

The Fall of Legal Aid
Toronto Star

An article in the Toronto Star examines differences between the US and Canadian legal aid systems and how both are failing. In order to qualify for legal aid in Ontario, an individual requires an income of below $10,800 ($24,067 for a family of four) whereas in the US the cutoff is $13,306 ($48,000 for a family of four). In the past both systems envied each other—the Canadian system “worked within a well-developed network of government-subsidized legal services,” while the US “had a robust probono (voluntary).” The author notes that while these systems have had support from their counterparts, legal aid as a whole needs more support from the legal profession to keep them thriving.

Work Stress and Legal Aid
Sydney Morning Herald

Legal Aid in New South Wales recently published a staff survey citing higher than average stress levels within its department. The survey finds that worker compensation claims are twice the national average, and more than 13% of the claims are due to mental health issues. Frustrations were attributed partly to a lack of appropriate facilities, inadequate computer systems, and extreme emotional demands. Legal aid workers reported problems such as sleep deprivation and bullying from managers and supervisors. The survey comes after a controversial announcement to restructure the legal aid program.



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.

Leadership in Law Firms

Harvard Law School Executive Education will be hosting Leadership in Law Firms on September 18-23, 2011 in the new law school building, Wasserstein Hall. The program brings together 50 leaders from top law firms worldwide to discuss challenges they face in leading these organizations and developing the skills and perspectives necessary to lead in an increasingly competitive environment. Over half of the September participants are from outside the US; countries represented include the UK, Brazil, P.R. China, Italy, Lithuania, France, Finland, and Singapore.

Emerging Leaders in Law Firms: New Partners Program

In March 2012, HLS Executive Education will be launching Emerging Leaders in Law Firms: New Partners Program, an intensive, five-day program specially developed for attorneys who have entered equity partnership in their firms within the past two years. As partners, these lawyers are expected to take on greater managerial responsibilities and will be expected to exert greater leadership. The program offers them leadership and managerial perspective and skills to transition to partnership successfully. The program will be held at Harvard Law School on March 11-16, 2012.



Editor: Daniel L. Ambrosini
Managing Editor: Nicola Seaholm
Contributing Editors: Amanda Barry, Nathan Cleveland, Hakim Lakhdar, Pavan Mamidi, Mihaela Papa, Erik Ramanathan


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