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PLP Pulse: News from the Frontiers of the Legal Profession
April 2012
 

Corporate Counsel

General Counsel—Naysayer or Yeasayer?
Economist and Law.com

The chief legal officer has become one of the most powerful positions in a company. With the role comes the challenge of knowing when to agree or disagree with other C-level executives in the company. According to Ben Heineman, Distinguished Senior Fellow at Harvard’s Program on the Legal Profession, in-house counsel need to be independent contributors to strategy and operations but also need the ability to say no to others including the chief executive officer. Heineman states, “If you’re a naysayer you don’t even get invited to the meetings. If you’re a yeasayer, you can get indicted.” Balancing one’s legal and ethical obligations is critical in the role of “general counsel as lawyer-statesmen” as it requires courage, character, and a willingness to advocate for the company’s integrity.



Globalization

Mexico: The Next Global Frontier
Legal Week

DLA Piper became the latest global law firm to move into Mexico last month with the acquisition of Thompson & Knight’s entire Mexico City office. This follows the path of other firms like Baker & McKenzie, DAC Beachcroft, Greenbert Traurig, Jones Day, and White & Case. Law firms are attracted to Mexico partly due to its insurance market, which is the second largest behind Brazil, and because there is a demand for expertise in environmental law and public-private partnerships.

Going Global in Saudi Arabia
The National

Abdul Aziz Abdullah Al Yaqout, a Kuwaiti-born German-educated head of an international law firm in the Arab world, describes the transformation occurring to the provision of legal services in the region saying, “Saudi is the big gorilla in the room, and presents its own challenges.” He dismisses the notion that local Arab firms are inferior to the big global law firms operating in the region and emphasizes the importance of understanding the culture of local clients in order to provide high-quality legal services. “I’ve been in meetings dominated by international lawyers who miss out on essential parts of (an) exchange because they don’t speak Arabic – and that has to change”.



Law Firms & Practice Management

Law Firm Restructures in the Face of Rainmakers’ Departure
Washington Post

After nearly 40 partners departed from Dewey & LeBoeuf, the firm is planning to move from a single chairman model to a five-partner “office of the chairman” pending approval in a partnership vote. The Washington Post reports that several former partners stated that the mass departure from the firm was due to compensation problems. Although the firm attracted 37 attorneys in 2011 they were unable to compensate the rainmakers and the firm’s debt is estimated at more than $100 million. Dewey is negotiating a two-year credit line with lenders but there is speculation that if it cannot retain many of its remaining partners its survival will be threatened.

Alternative Billing Gains Traction Post-Economic Recession
Wall Street Journal

Alternative law firm billing practices have become necessary to remain competitive particularly during the economic recession. According to a Citi Private Bank survey of 40 managing partners of US law firms, alternative billing practices will reach 13.4% this year doubling what they were in 2008. As the economy and business appear to be balancing out there does not seem to be a rush back to the traditional hourly billing. Law firms are becoming more diligent about the amount of time they spend on legal matters to ensure expenses and fees are competitive for clients. According to the Wall Street Journal, “many companies now seek much more detail about how law firms plan to execute the work.” The increased level of detail required by firms requires additional time, but in the long-run may attract more clients if there is a willingness to adapt from the traditional billing model.



Attorney Regulation & Ethics

Chinese Lawyers Must Swear an Oath of Allegiance to the Communist Party
The Wall Street Journal

The Chinese Ministry of Justice announced that every new Chinese lawyer must swear to a new oath upon entering the profession. Previously, newly admitted lawyers had to swear before local lawyers’ associations to protect the law, the Constitution and clients’ rights, and to follow lawyers’ professional ethics. The new oath requires that lawyers “promise to faithfully perform the sacred duties of a legal worker under socialism with Chinese characteristics” and “to uphold the leadership of the Chinese Communist Party and the socialist system.” While the new oath may be perceived as a way of constraining lawyers from representing clients seen as challenging Party rule its reach is not fully clear. The oath applies to individuals entering the profession and to those re-applying for licenses, but the Ministry did not mention whether it is obligatory during the mandatory yearly re-registration.

American Bar Association Considers Allowing Non-Lawyer Investors
The Wall Street Journal

Ethics rules bar most US lawyers from sharing profits with non-lawyers because of concerns that outsiders not subject to the same rules of conduct could influence lawyers’ judgments or erode the obligations of client loyalty and confidentiality. The one exception is in the District of Columbia where the local bar voted in the 1980’s that non-lawyers can hold financial interests in law firms. As the UK and Australia experiment with allowing non-lawyers to own a limited stake in law firms, the American Bar Association (ABA) is weighing the option of allowing non-lawyers who work at law firms to own as much as 25% of the firm. The ABA’s previous proposals on this topic have been rejected and law firm support has been divided.



Legal Education

University of Toronto Aims to Certify Internationally Trained Lawyers
The Globe and Mail

Foreign trained lawyers who have immigrated to Canada often have a difficult time passing all twelve accreditation exams to practice law. The University of Toronto’s Faculty of Law has established a comprehensive program to help students pass exams and find employment in Canada. The Internationally Trained Lawyers Program (ITLP) offers students classes to pass exams and a three month internship. Gina Alexandris, director of the ITLP, states that the program is unique in that it also offers participants valuable access to a network of potential employers. Law firms participating in the program are dedicated to finding employees from outside of the traditional applicant pool.

UK’s Ambitious Legal Education Reform
The Guardian

The UK’s three main legal profession regulators are in the midst of a major review of their professional training. The review, known as the Legal Education and Training Review (LETR), represents a vast undertaking of which the main task is “examining regulated and non-regulated legal services and all stages of legal education and training.” Possible changes resulting from the review will include national assessments for all points of entry to the profession and regulations on non-barrister or solicitor legal positions.

Case of Misleading Post-Graduate Job Prospects Dismissed against New York Law School
New York Times

A legal case brought by nine graduates of New York Law School contending that their alma mater misled them regarding postgraduate employment has been dismissed by New York Supreme Court Judge Melvin Schweitzer who ruled the case has no merit. Although the ruling will not directly affect pending cases filed throughout the US, it may be considered persuasive by courts. Students who brought the lawsuit alleged that law schools misled them through inflated postgraduate employment statistics. In the case of New York Law School graduates, lawyers argued that the school led students to believe that full-time jobs were acquired by 90% of students. The students allege that the statistics included low paying jobs that were not in the legal industry and they plan to appeal the decision.

Legal Jobs Projected to Grow but Overproduction of Lawyers Remains
The ABA Journal

The Bureau of Labor Statistics reports that the number of jobs for lawyers in the decade ending in 2020 is expected to grow by 10% reaching 801,800. The increase represents a gain of 73,600 lawyers for the decade beginning 2010. However, approximately 45,000 students graduate from law schools each year, creating a relative problem of lawyer overproduction. Indiana University law professor William Henderson sees three ways of addressing the overproduction of lawyers: (1) curtail federal funding for law student loans; (2) increase school competition due to the new ABA transparency requirements; and (3) increase the versatility of law school degrees to make students more competitive outside traditional legal services markets.

LSAT Takers Decline; Lower Tier Schools Likely to Suffer
New York Times

The Law School Admission Council reported a 16% drop in the number of LSAT exams administered this academic year. There were 129,925 exams this year compared to 155,050 in 2010-2011 and 171,514 in 2009-2010. The New York Times speculates that the drop reflects “a spreading view that the legal market in the United States is in terrible shape.” An increasing number of students believe that entering law school is not a ticket to financial security. The decrease in student applications to law schools will be worse for lower tier schools that will need to admit less qualified candidates or shrink class sizes to compensate for the decreased income.

Ten Law Schools that Lead to the Most Educational Debt
US News and World Report

As the job market for new law school graduates remains relatively stagnant, recent graduates are increasingly aware of the educational debt load post-law school. According to the latest US News and World Report statistics, the average law student graduates with $100,433 of debt; students who obtain a degree from schools with the heaviest debt load are averaging upwards of $150,000. California Western School of Law leads the way with graduates carrying an average debt load of $153,145 compared to Georgia State University where students’ debts average $19,971.



Public Interest Lawyering

Significance of Salary and Political Careers
The ABA Journal

The ABA Journal reports that a “survey of 758 prelaw students by Kaplan Test Prep found that 38 percent said they would consider running for political office, down from 54 percent in 2009.” These findings match the decline in lawyers serving in Congress leading many to believe that as the profession becomes more globalized, and other areas of legal practice become more lucrative, students are being attracted to other job prospects where there is a higher salary.



Diversity

South Korean Law Schools Being Dominated by the Wealthy
The Hankyoreh

There has been a trend at South Korea’s largest and most prestigious law school, Seoul National University Law School (SNU), to admit students from wealthier and more privileged backgrounds at the expense of creating a diverse student body. As reported by The Hankyoreh, critics highlight that the majority of students matriculating into SNU have increasingly come from the most expensive private high schools or the most prestigious public school districts in the country. For example, in 2009 almost 52% of SNU first-year students were from wealthy backgrounds and this increased to nearly 62% by 2012.



Professional Development

Managing Expectations of New Lawyers
Legal Week

Through informal research conducted with law school students and recent law graduates on what motivates new lawyers to enter the profession, Freshfields’ Simon Johnson reports that the factors today are not similar to those that motivated earlier generations. The millennial generation wants greater flexibility, is more tech savvy, and is less likely to want to work long hours as their parents did. New lawyers are looking for greater international experiences through opportunities to travel, and 43% reported that work/life balance is a more important consideration than competitive salary or a bonus.



Program Notes

New Case Studies

The Case Development Initiative has developed several new cases. Recently released is David Lee at Solomon & Myer, by Ashish Nanda, John J. Gabarro, and Edwina Smith, a case that follows the life of a fourth year associate at a top New York law firm as he struggles to meet the demands of an intense and exciting job while maintaining a quality home life. The second is an update to the Tale of Three Teams case series with a new revision that takes place at the fictional law firm Harris & Graves. The Tale of Three Teams cases provide participants the opportunity to reflect on and discuss the challenges of leading teams and maintaining performance in various professional service settings.

Leadership in Law Firms

Harvard Law School Executive Education will host Leadership in Law Firms May 13-18, 2012. The program brings together leaders from the world’s top law firms to discuss the challenges they face in leading these organizations and developing the skills and perspectives necessary to lead in an increasingly competitive environment. For more information, visit our website.

Harvard Law School recently completed its inaugural executive education program, Emerging Leaders in Law Firms, which is an intensive five-day program specially developed for attorneys who have entered equity partnership in their firms within the past two years. The program offers managerial perspectives and skills to help partners transition successfully to leadership roles.

Leadership in Corporate Counsel

Harvard Law School Executive Education will host its fourth cohort of Leadership in Corporate Counsel June 20-23, 2012. Leadership in Corporate Counsel is the first executive education program tailored specifically to general counsel and chief legal officers. General counsel from the world’s leading corporations will attend a three-day event on Harvard Law School's campus. Participants will develop a holistic understanding of the challenges, skills and perspectives required of effective corporate counsel leaders. For more information, visit our website.



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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