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

Globalization

Singapore Starts the Second Round of Liberalization of its Legal Market
Bloomberg

The first round of liberalization in Singapore’s legal market has opened its doors to foreign firms and doubled the number of foreign lawyers in the last four years. Singapore’s Law Minister K. Shanmugam said that liberalization has gone “better than we could have expected” with the legal industry growing by about 10% each year over the past five years. Singapore will award a second round of licenses to foreign lawyers by next year. On the one hand, the new licenses will increase competition for local firms who may find it difficult to grow, to handle more high-end work, and to compete on an international level. On the other hand, opening the market will provide an incentive to international firms to use Singapore law for their regional work and increase the its attractiveness as a legal hub.

World’s Largest Law Firm Strategizes in Asia
The Wall Street Journal

DLA Piper, an international law firm with more than 4,200 lawyers in 77 offices, is strategizing how to become the leading global business firm and strengthen its practice in Asia. Tony Angel, DLA’s global co-chairman and senior partner observes that, compared to the Americas or Europe, Asia has historically been very lightly lawyered but the market is maturing due to the rapid growth of massive companies in China and India. DLA Piper already has nearly 1,000 lawyers in the Asia-Pacific region, but wants to become more powerful in a number of key Asian centers.

South Korea Unlocks the Door to Foreign Firms
Wall Street Journal

Earlier this month, the South Korean Justice Ministry gave preliminary approval to the leaders of three foreign firms indicating a possible shift that could allow foreign firms into the country. Of the three firms, two were US-based and one was UK-based. All have offices in foreign countries and additional offices in Asia. The decision initially came from trade agreement ratification with the EU and US; foreign law firms will be able to serve in advisory roles and only after five years can they compete fully with local firms.

Bar Council of India Approaches Supreme Court against AK Balaji Decision by Madras HC
Bar & Bench

The Bar Council of India (BCI) has filed an appeal before the Supreme Court challenging Madras High Court’s judgment of February 2012. The ruling held that foreign law firms or foreign lawyers are permitted to visit India temporarily, on a “fly in and fly out” basis, for the purpose of giving legal advice on foreign law to their clients in India, and that they can conduct arbitration proceedings in disputes involving international commercial arbitration in India. Newly elected BCI Chairman Manan Kumar Mishra confirmed that the BCI is against the “fly in and fly out” practice arguing that entry of foreign lawyers should be allowed only on the basis of reciprocity, and it wants foreign lawyers to first enroll with the Bar Council before they can practice.

Tug of War Between Bar Council and Government of India
Jagran Post

The war of words between the apex body for lawyers and the federal government in India has intensified again. The Bar Council of India (BCI) and members of the Delhi bar association are planning a massive rally of over a hundred thousand lawyers in Delhi to protest the government’s proposed bills to regulate legal education in the country. According to BCI Chairman Manan Kumar Mishra, “The Higher Education and Research Bill, 2011 is an attempt to empower the Ministry of Human Resource Development to deal with aspects of the legal education and to take away statutory functions of the state bar councils and BCI provided under the Advocates Act.” The BCI believes that the independence of the legal profession and the judiciary is likely to be compromised if the government passes the bills. In particular, it is concerned about the impact these bills will have on the entry of foreign law firms and institutions into India.

Australian Law Firms Choose Alliances to Remain Competitive
Sydney Morning Herald

Globalization, the flow of capital to Asia, and a boom in Australian resources have driven fierce market competition in the Australian legal market. Several top tier law firms have entered international partnerships to avoid being left behind in an increasingly competitive market. For example, the law firm Allens Arthur Robinson recently announced an international alliance with Linklaters. Allens’ chief executive partner, Michael Rose, said the firm opted to form joint ventures in the Asian market because “we would have found it increasingly difficult to have the necessary penetration in the various places around the world where Australian work now originates”. Mergers and alliances with foreign firms will help diversify legal services and enhance the reputation of Australian firms overseas.



Law Firms & Practice Management

Dewey Downfall Provides an Opportunity to Reflect; Summer Associates Left without Internships
New York Times

The impending downfall of law firm Dewey & LeBoeuf has been attributed to several factors including massive long-term debt and lucrative long-term guarantees unrelated to performance that were extended to partners following a merger. Law firm economics expert Bruce MacEwan reflected on whether other firms could learn from the Dewey story, saying, “Everything they did was so extreme and so ill advised. But part of me has to admit that the dynamics of the practice, the eat-what-you-kill remuneration model, makes a law firm inherently fragile.” In a related article, the New York Times reported on the approximately thirty law school students who accepted summer associate positions at Dewey, and are now left without jobs for the next two months and without post-graduation job security. Law school career services administrators are reaching out to firms to assess whether they are in a position to hire some of the displaced students.

For Those at the Top, 2011 Was a Banner Year
Investment Weekly News & The American Lawyer

2011 proved to be a successful year for the Am Law Top 100 firms and even more so for the top 50 firms. The American Lawyer reported significant increases in gross revenue as well as profits-per-partner among the top 100 firms, with the top 50 having the biggest jumps in 2011. At a time when young lawyers are concerned with their professional careers, the headcount of lawyers among Am Law 100 firms grew by more than 3% from 2010. These numbers suggest that despite the economic downturn, the legal profession continues to grow.

Magic Circle Law Firms Weigh in on the Market
The Lawyer

Magic circle law firms are being cautiously optimistic about growth over the coming few years. “I think we’re looking at single digit growth” according to Allen & Overy’s managing partner Wim Dejonghe, in describing the 2011-12 year end. Slaughter and May’s executive partner, Graham White, states, “We’re a much more cautiously structured firm than some of our competitors and I think we will stay that way.” Clifford Chance’s managing partner, David Childs, was a little more optimistic in his assessment for 2011-12 saying, “Overall, the year has been more positive than we might have anticipated during some of the more difficult economic periods of the past twelve months.”

Examining the Law Firm Business Model
New York Times

Chairperson of international law firm Seyfarth Shaw, J. Stephen Poor, recently contributed his ideas on what firms can do to adapt their businesses in recognizing the effects of competition and market forces. His first recommendation is to take inspiration from the manufacturing sector or other industrial models and analyze work processes to improve efficiency. Second, firms should not settle for half steps and should follow through on the implementation of new initiatives such as improving employee evaluation. Third, Poor recommends not underestimating resistance to change by lawyers; he emphasizes the need to manage change strategically by demonstrating client buy-in to new initiatives and taking firm history and culture into account.



Public Interest Lawyering

In 2013, New York Lawyers Must Meet Pro Bono Requirement
New York Times, The National Law Journal, & New York Times Editorial

A recent announcement from New York State’s chief judge, Jonathan Lippman, is changing the future of bar admissions in New York State. Beginning in 2013, prospective lawyers who pass the bar must perform 50 hours of pro bono legal services before they are approved to practice law. This small change will provide hundreds of thousands of hours of legal assistance to New Yorkers who need it. According to court data gathered by the New York Times, 99% of tenants are unrepresented in eviction hearings and 97% of parents are unrepresented in child support matters in New York. The National Law Journal urges everyone to temper their enthusiasm until all the program details are out, and argues that while early and positive exposure to pro bono can lead to a career-long dedication to it, early negative experiences can be equally harmful.

With the Aid of Technology, In-House Lawyers Take on Pro Bono Work
The Washington Post

Eighteen months ago, Capital One invested $25,000 in a project to digitize legal files from local legal aid groups, providing their in-house lawyers with an easier way to connect to pro bono cases. The result of that investment is a product known as Justice Server, which allows employees to remotely access pro bono files instead of having to liaise directly with local legal aid groups. Through Justice Server, Capital One is part of a new wave of corporations rethinking the value of providing pro bono services. By contributing resources to pro bono cases and setting company benchmarks for how much time should be allocated to them, in-house lawyers are better able to engage with pro bono work in a way that was not previously possible.



Corporate Counsel

Selection and Retention of Law Firms by In-House Counsel in Western Europe
Enhanced Online News

A new 2012 report studying law firm and client relationships with 219 in-house counsel across 16 Western European countries was just released by Lexis Nexis Martindale-Hubbell. The top five factors used in selecting law firms are: understanding business needs, objectives, and culture (72%); speed of response (56%); client service/responsiveness/communication (56%); lawyer expertise (54%); and having a trusted advisor and not just a legal technician (51%). The top five factors to retain law firms are: quality of team (80%); knowledge of client’s business (76%); cost (71%); approach to matter at hand (66%); and lawyer expertise (62%).

GC Skills for a New Era
Corporate Counsel

Tom McCoy of Corporate Counsel examines the role of GCs in shaping today’s economy in light of the run-up to the US presidential election. McCoy discusses how the role of the GC “straddles a global, complex, and high-speed intersection of law, business, politics and policy.” As the role of the GC has changed, so have the skills a good GC needs. He states that today’s GC must have “leadership skills, business and policies acumen, strategic thinking aptitude—and crisis management courage.”



Attorney Regulation & Ethics

SEC General Counsel Addresses Misconduct of Lawyers
Wall Street Journal

The Securities and Exchange Commission (SEC) has increased its scrutiny of possible professional misconduct and has started referring more lawyers to the SEC’s GC for investigation. The SEC intends to determine whether lawyers have attempted to thwart investigations by engaging in behaviors such as advising clients to provide “less-than-candid testimony,” changing incriminating documents, or withholding documents from investigators. Thus far, only one lawyer has been banned for life from representing clients before the SEC due to professional misconduct. On the other hand, all charges against attorney Lauren Stevens of GlaxoSmithKline, who was accused of falsifying documents in an SEC investigation, were dropped by US District Judge Roger Titus of Maryland, who stated, “a lawyer should never fear prosecution because of advice that he or she has given to a client who consults him or her.”

Megafirm Culture under Scrutiny in New South Wales

The Australian

According to the Australian, New South Wales Chief Justice Tom Bathurst expressed concern that an overwhelming emphasis on commercial success at large law firms is turning young lawyers into “mindless drones” who are “being indoctrinated into cultures where their professional duties could be superseded for personal gain.” Catherine Gale, President of the Law Council of Australia, disagreed strongly with Justice Bathurst’s remarks firing back that his comments gave “a distorted perception of the major firms’ work practices and cultures.” Gale states that large law firms do not value employees solely based on hours billed, and that megafirms are more than capable of evaluating and cultivating young legal talent.



Diversity

Lack of Diversity on Law Reviews and Law Faculty
Cornell Journal of Law & Public Policy Blog

Legal scholars appreciate the importance of having their work published in law reviews, with each publication helping to enhance their reputation and success in hiring, promotion, and tenure decisions. Law students who comprise the law review acquisitions committee have a huge influence on the future of legal discourse and education. The Cornell Journal of Law & Public Policy Blog highlights that the selection process to law journals, largely unchanged over the past 100 years, has resulted in a lower number of minorities making law reviews and subsequently, minority and underrepresented voices are going unpublished. This lack of diversity can have a detrimental effect on the composition of faculty members, as evidenced by reports that only 30% of the professoriate was female in 2010.

Statistics Demonstrate Meager Return for Federal Minority Law Clerks
National Law Journal

Regrettably, 2011 brought little progress in the federal courts’ push to increase diversity among judicial clerks according to recently released statistics from the Administrative Offices of the US Courts. The numbers show that despite a pilot internship program targeted at minority law students, and judge’s remarks about the need for increased diversity, the percentage of African-American and Hispanic clerks remained steady. The statistics also reveal that African-Americans filled the lowest percentage of district court level clerkships since 2000. The lack of minority judicial clerks gained national attention in 1998 in reports by USA Today and Legal Times.



Legal Education

Hastings College of Law Reduces Admissions
USA Today

Frank Wu, chancellor and dean of the University of California Hastings College of the Law, states, “There are too many law schools and there are too many law students and we need to do something about that.” Hastings will take a bold step this fall by reducing student admissions by 20%. Dean Wu states that a law school should stop being a “refuge for the bright liberal arts student who didn’t know what he or she wanted to do.” Admissions to law schools have been down by 15% across the US and by 7% at Hastings. “I’m totally understanding of what Hastings is trying to accomplish and I’m very sympathetic to the idea that you don’t want to admit more people into a declining [job] market,” according to Jim Chen, dean of the University of Louisville’s Law School. “How you manage to do that without the revenue is going to pose a very formidable challenge for most American law schools,” states Chen.

Calculating Law School Debt
The National Law Journal & Inside Counsel

According to Law School Transparency executive director Kyle McEntee, the total cost of law school loans for students graduating in 2016 will average $200,595. The concern held by many is that the large debt numbers generally reported do not reflect the real costs associated with overall law school debt. Variables such as interest, inflation, and out-of-state tuition rates are often not factored in when reporting student debt. According to the National Law Journal, many prospective students and their families are not doing the math correctly to obtain an accurate estimate of overall costs.

Gender and In-Class Dynamics at Law Schools
Yale Daily News

According to a report by a Yale Law School student group, men are 16% more likely to speak in class than are women. The study involved several interviews with non-visiting faculty members, in-class observations, and a survey conducted with students at Yale Law School. The report finds that although participation by women in the classroom has improved, the rate remains low. The majority of students attributed these findings to historic gender inequalities in the legal profession. The report recommends that faculty be aware of classroom dynamics, practice conscientious classroom management, and observe other professors’ teaching strategies. Students, on the other hand, are advised to avoid undermining their participation by making apologetic prefatory remarks, to select one or two classes of interest to participate more actively, and to speak up early in the semester.

Are National Law Universities in India Great Institutions?
Legally India

Arup Surendranath and Chinmayi Arun argue that the metrics used to measure on the quality of National Law Universities (NLU) in India is questionable. They state that universities cannot be evaluated purely based on their ability to attract good students or on the jobs that students receive post-graduation. The entrance system of NLUs is structured so that very bright students are admitted, but conceivably very little value is added to them. They argue that more should be done to prevent NLUs from being identified as branding institutions that offer valuable networking to focusing on their mandate of providing quality legal education.

Law School Debt and Age at Matriculation
The Am Law Daily

AmLaw Daily blogger Matt Leichter addresses a misconception that the age distribution of law school applicants is comprised solely of those in their early twenties and that applicants are disregarding reports that law school may not be a sound investment. He explains that older students have lower LSAT scores and apply to fewer schools suggesting that it is this group of applicants who are not “getting the message.” Leichter points out that students who receive a higher LSAT score—in the 170-74 range—decreased in the applicant pool by 20% suggesting that “the ‘right’ people—the stereotypical lemmings who think they’ll earn overflowing cash sacks as lawyers—are getting the message,” while older students with lower scores are not.



Professional Development

Lawyers Need to Learn Business
New York Law Journal

As the legal industry becomes increasingly competitive, understanding law firms as businesses is particularly relevant for career success. Market pressure affects different niches of the industry; Am Law 200 firms are multi-hundred-million dollar per year enterprises, so their lawyers need management expertise. The legal process outsourcing (LPO) market forecasts that the industry will surpass $2 billion in 2012 and will reach $4 billion in 2015, while venture capitalists are pouring money into online legal services like Google’s Rocket Lawyer. Some firms are now incorporating management and business training into their short and long-term development strategies.



Innovation & New Models

As Litigation Investment Firms Bring Cash, Watchdogs Warn of Influence
New York Times

With support from some of the country’s top law firms, the litigation financing industry has seen significant growth in the last year. Despite warnings from the US Chamber of Commerce that third-party investors can influence cases and “affect a company’s legal strategy,” litigation investment firms are on the rise. These firms, including BlackRobe Capital, Fulbrook Management, Bentham Capital, and Juridica Capital Management, are often run by former lawyers who have access to lawsuit investment opportunities through connections with wide networks of former colleagues and clients. After weighing the legal risks and analyzing potential recoveries, these firms infuse capital into cases, often leading to massive paydays for investors.

Hip-Hop Public Legal Education Campaign
Metro News Canada

There is a greater need to educate young people about their legal rights. Pivot Legal Society, based out of Vancouver, Canada, aims to do just that by reaching out to today’s youths through hip-hop. Through a series of fun, hip-hop style videos Pivot Legal attempts to demystify youth’s understanding of the law by working with young filmmakers to translate legal information into videos that make sense for youth.



Program Notes

New Case Study Series

The Case Development Initiative has released a new case study series—Slater & Gordon. The Slater & Gordon cases address the transformation of the Australian firm from a conventionally structured partnership through changes in management, strategy, and capital structure to the world’s first publicly held law firm. The cases raise questions about how the transformation will affect Slater’s culture and values; whether the conditions for Slater’s successful IPO will be shared by other firms in the UK or elsewhere; and how the firm will balance potentially conflicting claims by clients, lawyers and shareholders. The cases can be purchased at our website.

Leadership in Law Firms

Harvard Law School Executive Education is hosting 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 information on the September 2012 session, visit our website.

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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