Cost of ABA Accreditation Process Creates a Heavy Burden for the Duncan School of Law
New York Times and New York Times Econimix Blog
Leaders at the new Duncan School of Law, part of Lincoln Memorial University in Tennessee, tell the New York Times that many of the ABA requirements for law school accreditation are too expensive to maintain, making it difficult for Duncan to keep tuition costs affordable for lower-income students in rural Appalachia. The law school attempted to reduce expenditures by establishing a lower-cost model for its library, but administrators say that ABA standards such as those requiring a certain percentage of full-time tenured faculty are making it impossible. In most US states practicing lawyers must have earned a law degree from an ABA accredited school. However, the New York Times points out that in other countries there are many different types of law practice, some of which require only the equivalent of a community college degree. This keeps the cost of civil justice very high and completely unaffordable, even for members of the middle class. Since the publication of the original article, the ABA denied Duncan’s application for provisional accreditation, and Duncan has sued the American Bar Association for antitrust violations.
Finding a Balance with Law School Innovation
National Law Journal
During the American Association of American Law School’s annual meeting in Washington DC, legal academia were criticized for being stuck in the past and moving too slowly in adapting to current market needs. Others presented plans for curricular innovations that balance traditional teaching methods with practical training. Professor David Wilkins, faculty director of Harvard Law School’s Program on the Legal Profession told the National Law Journal that “whether law schools are willing to actually change is a…difficult issue. There is a lot of dissatisfaction with law school, but not a lot of strong ideas about how they should change.” Legal employers have been slow to demand that their new hires be trained in innovative practical training programs and continue to hire based on traditional credentials. According to Professor Wilkins, “they say they want this or that, but who do they ultimately hire? The kid on the law review.”
Growing Law School Debt Concerns US Federal Government
The ABA Journal
According to data collected from law schools by U.S. News & World Report in 2010, 85% of law graduates from ABA-accredited schools have an average debt load of $98,500 and at 29 law schools the debt is more than $120,000. Yet, only 68% of graduates reported employment in jobs that require a JD degree nine months after commencement. These figures and debt load have the government concerned that students are using federal loans to attend law school and yet are unemployed or inadequately compensated, thereby unable to repay their debts. In some cases law schools must demonstrate, as a condition of receiving federal loan money, a minimum threshold of employability and income upon graduation for their students to carry less risk.
Socratic Method under Scrutiny
New York Times
In the New York Times Room for Debate, the Socratic Method has come under scrutiny. According to Professor David Wilkins, faculty director of Harvard Law School’s Program on the Legal Profession, the benefits of the Socratic Method at American law schools contributes to the critical thinking skills of students and should be preserved as an important pedagogical tool. Having interviewed thousands of lawyers of different areas of practice, he argues that the critical thinking skills students acquire are generally from teachers’ dynamic rather than passive teaching styles. Robert Dinerstein, director of the clinical law program at American University’s Washington College of Law, suggests that the Socratic Method should be accompanied by experiential opportunities for students such as simulations, role-plays, brainstorming, and client clinical education.
A Judge’s Perspective on Law Education Reform
The National Law Journal
During the Association of American Law Schools annual meeting in Washington DC, Judge José Cabranes of the US Court of Appeals of the 2nd Circuit offered strategies to address the “crisis” in legal education. Although law schools have introduced an increasing number of interdisciplinary courses over the years, according to Cabranes they should shift their curriculum back to core black-letter law courses. Law schools could also introduce a two-year program, followed by a one-year apprenticeship where students gain real-world experience and pay less tuition. Finally, he reiterates what other Supreme Court justices have highlighted about legal scholarship leaving “terra firma” in favor of outer space, according to the National Law Journal. As law schools launch programs with foreign law schools “many of these international programs are worthy endeavors…but these global intentions are mostly a distraction from the core objective of a law school,” according to Cabranes.
A Former Dean’s Perspective on Legal Education
The National Law Journal
Former New York Law School Dean Rick Matasar, who stepped down from his deanship effective January 2012, delivered a speech four days later at the Association of American Law Schools in Washington, D.C. about the inevitable evolution of legal education. Matasar discussed the poor job prospects facing graduates, growing debt load, and influence of outside regulators on law schools. He proposed five key approaches, highlighting law schools’ willingness to allow for experimentation as a priority to move forward. These include diversifying to find money beyond the traditional JD program, enrolling students who lack Bachelor’s degrees, and collaborating across law schools by sharing faculty members.
Unemployed Lawyers: You Should Have Known…
Thomson Reuters News & Insight
In a recent interview with Reuters, American Bar Association (ABA) President William Robinson stated in response to critics of the ABA’s regulation of law schools that unemployed law graduates should have been aware “that the economy has declined over the last several years and that the job market out there is not as opportune as it might have been five, six, seven, eight years ago.” Robinson argues that factors such as competition for the best faculty rather than ABA rules are causing high tuition costs and the burden of debt carried by many law school graduates.
Attorney Regulation & Ethics
European and US Bar Associations Concerned about Threats to Self-Regulation
Wall Street Journal
The American Bar Association and the Council of Bars and Law Societies of Europe asked the head of the International Monetary Fund (IMF) Christine Lagarde to help fight proposals to regulate the legal profession in Ireland, Greece, and Portugal. The three countries were hit hard by the debt crisis and are now considering measures that challenge regulatory independence from the executive branch of the state. For example, Ireland committed to regulate aspects of the legal profession as part of an aid package from the European Union and the IMF. They are considering a bill that would establish a regulatory body for the industry and members will be appointed or can be removed by the Irish justice minister. Similar developments are being investigated in Greece and Portugal.
Big FCPA is watching you
The US Foreign Corruption Practices Act (FCPA) poses several challenges and risks to American companies operating in overseas markets. Operating through middlemen or touts who engage in practices of bribing, often times these touts pay out officials in the government without knowledge of the company. Nigeria is considered to be at the center of enforcement of the FCPA since 2002, where touts engaging in corruption, bribery, and nepotism have been the norm. Non-native companies operating in Nigeria are well-advised to take precautions and conduct due diligence before obtaining services of such touts.
Making it In Japan: How the Legal Climate is Changing
A once prominent market for legal work, Japan has become a second thought to the international legal community. Multiple international firms have pulled out of the nation in recent years. Work in Asia has focused on China and Hong Kong – Chinese companies participated in public offerings worth $73 billion last year compared to less than $15 billion for Japanese companies. However, Japan still remains the third largest economy and therefore has not been completely abandoned. While there are a growing number of multinational companies in Japan, this does not necessarily translate to additional work for law firms in Japan. Instead, companies are developing relations in local markets overseas with local law firms.
Hong Kong’s Oldest Law Firm Prepares for Expansion in China
Deacons, the oldest Hong Kong law firm was the first non-Chinese law firm to be allowed a third representative office on the mainland in 2005; now they have 160 lawyers in Hong Kong, Guangzhou, Beijing, and Shanghai. Although approached by foreign law firms to enter strategic alliances, according to Business Week, Deacons plans to remain independent as it prepares to expand its three offices into mainland China when rules change to allow overseas firms to advise clients on local laws. Since China has given law firms from Hong Kong preferential access to the country, Deacons’ leadership hopes that Hong Kong firms will in turn allow them to advise their clients on Chinese law within the next five years.
American Arbitration in Hong Kong
According to American Lawyers 2011 Arbitration Score Card the 10 firms which handled the largest arbitrations do not have arbitration partners based in any Asian pacific countries. The Hong Kong International Arbitration Centre has almost tripled its case load in the past five years. However, US law firms have not increased their presence on the ground. According to Ben Lewis of the American Lawyer, this may be due to the strong British presence already there, a tradition of turning to domestic Asian firms, US firms preferring to run offices remotely, and a fear that arbitration work will dry up. As Freshfields head of Asia Arbitration Practice, Richard Clark explains “It’s a balancing act…too many arbitration lawyers, and they end up sitting around; too few, and the client goes elsewhere.”
Will Indian Supreme Court Adopt a Pro-Arbitration Stance?
The Indian Arbitration and Conciliation Act, 1996 intended to minimize the supervisory role of the courts in the arbitral process. Subsequent Supreme Court decisions such as the 2002 Bhatia International case laid the foundation for a more interventionist role of the judiciary in the area of controlling foreign arbitral awards. The Supreme Court held that Indian courts had jurisdiction even in the case of international arbitrations held outside of India. In 2010, the Ministry of Law and Justice proposed an amendment to the Act to reinforce the ‘minimum judicial intervention’ standard without success. More recently, the Chief Justice of India has placed the Court’s earlier rulings including Bhatia International before a five-judge constitutional bench that presents a new opportunity for creating a pro-arbitration regime.
New Merger Strengthens Canadian Global Law Firm
Wall Street Journal Law Blog
A Calgary-based law firm known for its oil and gas expertise, Macleod Dixon, and the Canadian wing of global law firm Norton Rose merged to create a 700-plus lawyer entity with major ambitions in the energy sector. The new firm, Norton Rose Canada, is the third largest in Canada with offices in Calgary, Toronto and Montreal. While Macleod Dixon benefits from the mining practice of Norton Rose’s lawyers in Eastern Canada and membership in the international Norton Rose Group, which has 2,900 lawyers and offices in 26 countries, it brought in its fossil fuel expertise, new oil companies, and other natural resources clients giving the group a new toehold in Venezuela, Colombia and Kazakhstan.
General Counsel Survey for 2012 Reveals Challenges on the Horizon
A survey of 107 US general counsel (GC) and their deputies suggests that a majority of residents are concerned about a change in business conditions in 2012 that will affect their firm or industry. Respondents identified “fear of the unknown” as one of their largest looming concerns, and yet indicated they had not updated their crisis-management plans. GCs can expect to continue facing the challenge of appearing as though they are not a liaison between business and legal industries, according to Corporate Counsel.
Innovation & New Models
Greater Competition in Legal Outsourcing
Wall Street Journal Law Blog
A recent report by Fronterion argues that offshore outsourcing outfits are likely to see a profitability squeeze due to rising wages in developing countries such as India, and an increasing ability to hire US contract attorneys from among new 2012 law school graduates for lower salaries. Offshore legal processing groups charge between $25-35 per hour for basic legal services such as document review, which is now roughly the same amount that contract review attorneys charge in places such as the Midwest. While most legal professionals still prefer to keep legal work domestic, as legal outsourcing becomes more accepted vendors will venture beyond litigation support to offer other services, which is likely to cause greater competition for business.
Part-time Lawyering Gaining Popularity
The Bangor Daily News
A greater interest and need for better work-life balance has inspired a University of Maine Law School graduate to start a business that places experienced lawyers looking to work part-time with solo practitioners or smaller law firms that need temporary help. In the past, most contract lawyers have been recent graduates hired to do part-time document review, whereas this new business venture, Custom Counsel, aims to hire trained legal professionals with five or more years of experience who are simply seeking part-time employment.
Law Firms & Practice Management
Expat Packages Booming
There is a thriving economic incentive for lawyers to move abroad as their American counterparts receive diminishing bonuses. Expat packages for lawyers working in places once considered a “hardship post,” but now frequently considered as desirable cities, are still booming. Taylor Root, a legal recruiting firm, states in a June 2011 Report that associates in Hong Kong received supplemental pay packages between $40,000 and $80,000. There are differences in compensation between US and UK firms related to economic incentives and motivations of lawyers going to work abroad. One difference is taxes. For example, whereas UK income tax is just 17%, Americans not only pay Hong Kong income tax but also US federal tax on overseas earnings that exceed $92,900.
New Strategies for Growth
With the economic environment continuing to be volatile, law firms must look to other options to fuel growth in 2012. Many law firms are developing strategies to differentiate themselves from others. Some of these include scaling the size of their equity partnerships, embracing project management, strengthening client relationships, and finding new ways to bill clients. These are combined with a plan to increase profits through new business, lateral hiring, and customizing billings through alternative fee arrangements. More than a majority of managing partners, chairs, and other leaders among Am Law 200 firms who were surveyed report that there will be a 5% or less increase in profits per partner for 2012.
Trends among US Law Firm Mergers
According to Hildebrandt Institute’s Merger Watch there were 45 law firm mergers in the US during 2011 compared to only 27 mergers in 2010. Last year’s mergers occurred across several US locations including California (7), Los Angeles (6), Texas (5), Illinois (4), Florida (3), and New Jersey (3). Since the beginning of 2012, there have already been 11 US law firm mergers suggesting a trend of activity that may head towards pre-recessionary levels, typically around 55 mergers per year. Some of the most active jurisdictions for large cross-border mergers outside of the US include Canada, Australia, and Asia.
Lateral Hiring - A Vicious Cycle
Lateral hiring can create challenges that have destroyed some of the greatest firms of the past. According to American Lawyer’s annual survey of Am Law 200 firm leaders, more than 80% report that they expect to add lateral partners in litigation, and 75% will add corporate laterals to their partnership ranks. Steven Harper of American Lawyer.com states that while “not all lateral activity leads to such epic disasters,” firms that obsess over others’ talents “seem oblivious to the perils.” Some of the biggest challenges include losing laterals after a long recruitment process, being unable to attract laterals in the first place, and integrating partners so that the firm continues to run together cohesively.
Commonalities between Lawyers and Bankers
Emergent trends reveal that the job crisis is mostly concentrated around the lower middle class, whereas the unemployment rate of college-educated workers is a modest 4.1%. However, it appears that lawyers share something in common with Wall Street financiers; they are part of a shrinking white-collar industry. With about 45,000 students graduating from law schools each spring, the unemployment rate for lawyers hovers at 2.1%, often with troubling consequences. Most law students graduate with large debts that they cannot repay unless they obtain high-paying positions. By the time the oversupply corrects itself, there are too many law school graduates struggling with financial problems.
Public Interest Lawyering
Poor Representation in Court for Immigrants
New York Times
A study was conducted by a group of lawyers and researchers in New York City to measure the quality and availability of legal representation for immigrants facing deportation. Between mid-2010 and mid-2011 about 47% of immigrants received “inadequate” to “grossly inadequate” legal representation, with private lawyers receiving the lowest marks for quality of representation. Additionally, researchers polled 31 judges in five immigration courts and found that many of them felt similarly about the lack of adequate representation for immigrants while also stating that many immigrants appear in court without any representation at all.
Injustice for Indigent Defendants
New York Times
A New York Times editorial recently highlighted a RAND study which found that although every criminal defendant is provided a lawyer in felony cases as required by the Constitution, the type of legal representation assigned to each indigent defendant can affect the outcome of the case. Clients represented by lawyers from the non-profit public defender association (who are paid more and work in teams with experienced lawyers) were less likely to be convicted, received lower sentences, and were less likely to receive a life sentence than defendants with court-appointed lawyers working alone.
New Partners Program
In March 2012, HLS Executive Education will be launching Emerging Leaders in Law Firms: New Partners Program. Emerging Leaders in Law Firms: New Partners Program is an intensive, five-day program specially developed for attorneys who have entered equity partnership in their firms within the past two years. As partners, the lawyers are taking on increased managerial responsibilities and are 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 University in Cambridge, Massachusetts, March 11-16, 2012. Fore more information, please visit our website.
Executive Education Reunions
Harvard Law School Executive Education will host annual reunions for Leadership in Corporate Counsel and Leadership in Law Firms in London, UK and New York. The New York reunions will take place on Friday, January 27 at the Harvard Club of New York City. London reunions will take place on Thursday, February 2 at Lincoln’s Inn. The reunions afford participants the opportunity to network with other program alumni, and learn about new developments in Executive Education. For more information or to register, please visit our website.
Linklaters India Internships
This January twelve JD students from Harvard Law School traveled to Mumbai for the 4th annual Linklaters India Internship program. The students have been interning at Amarchand & Mangaldas, AZB Associates, Nishith Desai Associates, Talwar Thakore & Associates, corporate counsel of the Tata group, and the chambers of Justice D.Y. Chandrachud of the Bombay High Court. In addition to interning the students have been conducting research on topics ranging from judicial activism, to the access of international markets by Indian entrepreneurs. Students will present their findings in a spring seminar at Harvard Law School.
Editor: Daniel L. Ambrosini
Managing Editor: Nicola Seaholm
Contributing Editors: Amanda Barry, Nathan Cleveland, Hakim Lakhdar, Pavan Mamidi, Mihaela Papa, Erik Ramanathan
Read the Previous Issue
Sign up to receive the Pulse by email.