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


A Feud among China’s Arbitral Institutions Increases Uncertainty for Stakeholders

China’s main arbitration body China International Economic and Trade Arbitration Commission (CIETAC) suspended its branches in Shanghai and Shenzhen because they refused to comply with new rules stipulating that all arbitrations had to be administered by the central Beijing commission unless contracts explicitly stated an alternative venue. Shanghai and Shenzhen branches tried to preserve their independence, but this move means that investors such as private equity funds are uncertain about the validity of existing contracts supporting their investments. They may need to change the contracts or be drawn into highly public court battles; and CIETAC may lose, as legal advisors will encourage clients to seek alternative commissions that promise greater certainty.

Israel Liberalizes Legal Market, but No Consensus on How Global Firms Will React
The Lawyer

In May of this year, Israel’s finance minister signed into law a directive that decreased regulation in the Israeli legal market. Before the new directive came into effect, foreign lawyers could only perform business development roles in Israel; now they can practice foreign law on-site, hire Israeli lawyers, and merge with Israeli firms. Because competition is so high in the Israeli market, billing rates are relatively low and bureaucracy is still a significant barrier.

Australian Law Firms are Becoming LPO-Friendly
Lawyers Weekly

Globalization of the Australian legal market appears to be making law firms in the country more receptive to legal process outsourcing. The chief operating officer of Legal Resources, Clare Matthews, stated that the growing demand for LPOs led her company to re-enter the Australian market. When the company was established in 2007, local firms were unreceptive. A combination of UK and US law firms’ treatment of LPOs as “the norm,” in-house counsel experience with savings through LPO use, and watershed events like King & Wood Mallesons public signing of a contract with an LPO provider in October 2011 have changed Australian views of LPOs.

Scotland Tries to Lure London-based Firms to Open Legal Support Service Center
The Lawyer

Scottish Development International (SDI), Scotland’s international economic development arm, is trying to seize on an initiative that has worked in Northern Ireland to attract top London-based law firms to the country in return for public funding and lower operating costs. SDI hopes to lure law firms, legal process outsourcing providers, corporations, and banks with large in-house counsel—with savings of 20-40% on each employee.

Legal Education

Declining Number of Law School Applicants and Increased Scholarships
The Wall Street Journal

Due to the declining number and quality of applicants at law schools, some are resorting to negotiating scholarships, flexible application deadlines, and offering additional “perks” in order to fill their seats. Potential students now have unprecedented power in negotiating the cost of their education as law schools scramble to attract a shrinking pool of highly qualified applicants. The University of California at Los Angeles, for example, actively encouraged admitted applicants to negotiate their tuition rates in a March 2012 letter, which states, “We very much hope you find this offer competitive with others you have received.” Scholarships have nearly tripled in the past ten years as law schools struggle to adapt to the changing economy and job market.

Qatar Partners with HLS on Legal Education
The National Law Journal

With the growth of commerce in Qatar and United Arab Emirates, there is a need for a more robust legal education curriculum for young Arab lawyers. Harvard Law School’s Institute for Global Law and Policy has formed a partnership with the Qatar Foundation to help start a graduate law school in Doha and strengthen legal education in the region. Professor David Kennedy at Harvard Law School stated, “It’s an honor to have been asked to help advise the Qatar Foundation as it develops its plans to build a world class law school in Qatar.”

ABA Focuses on US Legal Education, Not Accreditation of Foreign Law Schools
The ABA Journal

There has been conversation recently at the ABA about whether to begin accrediting “American” law schools beyond US borders. At the ABA’s annual meeting in Chicago earlier this month, the Section of Legal Education and Admissions to the Bar voted nearly unanimously to not pursue the idea of accrediting foreign law schools at this time. Many section members and shareholders felt that during this time of significant change in the US legal education system, and the difficulty of maintaining standards abroad, resources would be better served on domestic legal education.

University of Illinois Law School Fined for Publishing False Data
Wall Street Journal

The University of Illinois Law School will pay a $250,000 fine and public censuring by the ABA for allegedly publishing false admissions data. Following months of investigations, the ABA detected errors in LSAT and GPA statistics for entering law school classes. These statistics are critical for college rankings. The ABA said the problem arose because the law school did not give importance to the connection between “setting aggressive recruiting goals” and giving authority to a single individual “who stood to benefit from meeting those goals and the publication of false data.” In 2011, the ABA censured Villanova University School of Law for misrepresenting data but did not impose a fine.

Starting Salary for Law School Graduates Hits Record Low
The Association for Legal Career Professionals

The National Association for Law Placement (NALP) Employment Report and Salary Survey reveals that the salaries of the Class of 2011 fell by 5% from 2010 and 17% from 2009. Less than 50% of graduates obtained jobs in law firms. According to the report, the national median salary at law firms was $85,000 in 2011, compared with $104,000 the year earlier. According to NALP’s executive director, James Leipold, “we are starting to see a measurable impact from lower paying non-partnership track lawyer jobs at large law firms.”

Lawsuit Dismissed Against Cooley for Misrepresentation of Job Placement
Wall Street Journal Law Blog

According to the Wall Street Journal Law Blog, a Michigan court has dismissed a lawsuit by students from Cooley Law School against their alma mater for misrepresenting job placement statistics. The Cooley law graduates were seeking $250 million in damages. According to Judge Gordon Quist, the case was dismissed in part because a legal degree is not protected under Michigan's Consumer Protection Act. The decision follows another dismissal of an earlier lawsuit by former graduates of New York Law School against their alma mater.

Recent Law Graduates Skeptical of New Yale Law PhD
US News

According to US News, recent law school graduates are skeptical of the benefits and practicality of Yale’s new PhD in law, aimed at individuals who already hold a JD from an American institution seeking faculty positions. Citing the current job market in legal academia, some recent graduates wonder if pursuing the professorial track is a wise decision. Dean Robert Post of Yale Law School, believes the new PhD program will enable would-be-professors ample time and support to strengthen their resumes before pursuing faculty positions. Law professors usually have a JD and a PhD in another subject, such as history. “We’re reclaiming law as a discipline,” says Post.

Study Seeks to Measure Intellectual Excitement of Law School Faculties
Wall Street Journal Law Blog

A recent study published by the University of St. Thomas School of Law ranked the scholarly impact of the top third of American law schools by calculating the mean and median of total law journal citations by tenured faculty over the last five years. Harvard ranked second in the “Scholarly Impact Score,” trailing Yale but surpassing Chicago, Stanford, and New York University. Gregory Sisk, co-author of the study, said the new measure could be important to prospective students as it measures “whether there’s an intellectual excitement” in the faculty.

Corporate Counsel

2012 GC Compensation Survey Results Indicate Declining Pay, Increased Scrutiny
The American Lawyer

The latest edition of Corporate Counsel’s annual survey on GC compensation reveals a general trend of declining pay across the board. According to the results, every component of pay that was measured declined from the previous year—in some cases by double-digits. The report cites a number of potential factors including the economy, poor share performance, and increased shareholder scrutiny. According to Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, the issue is one of supply and demand, where the greater supply of lawyers willing to fill GC positions the more pay will be driven down.

Law Firms & Practice Management

Revolving Door Lawyers between SEC and Law Firms Don’t Compromise Enforcement
New York Times

A question is often raised about whether lawyers revolving between government positions and the private sector may create networks that lead to conflicts of interests and influence peddling. Based on data gathered from the career paths of 336 Securities Exchange Commission (SEC) lawyers involved in 284 SEC enforcement actions between 1990 and 2007, it was found that revolving-door lawyers who went from SEC to private law firms produced “more aggressive enforcement outcomes” while they were still at SEC than lawyers who never left the SEC. There was no evidence that law firms who hire SEC alumni can obtain more lenient enforcement outcomes from the agency.

Infographic Shows Legal Industry Trends
Wall Street Journal Law Blog

The telephone answering services company TelAssistant recently published an infographic that illustrates trends in the legal industry, specifically, the problem of lawyer oversupply and industry reactions to that problem. In 2012, only 27,639 of the 43,979 law school graduates gained employment. The graphic was created using publicly available data and shows nearly a five-fold increase in the number of law graduates from 1963 (9,638) to 2010 (44,004). The four major trends reshaping the legal industry are globalization, alternative legal service providers, virtual law firms, and legal process outsourcing.

Lawyers Fall for Email Scam
Wall Street Journal

Small to mid-sized law firms that work to solicit new business over the internet are the target for a common email scam in which foreign clients contact an attorney for assistance with claiming a legal settlement or insurance payout in the US. A check is mailed to the lawyers who “deposit [it] into the firm’s trust account … subtract their fee and then wire the balance to an overseas bank account, before the firm’s bank realizes the check is a fake or can stop the wire transfer.” The elaborately forged checks are often accompanied by corroborating settlement documents, creating a false sense of authenticity. According to US Postal Inspector Louis Di Rienzo, an estimated $70 million has been stolen from law firms by way of this fraud since 2009.

Attorney Regulation & Ethics

ABA to Consider Ethics Rule Change to Help Young Lawyers
ABA Journal

The ABA Commission on Ethics 20/20 has proposed a series of changes to the ABA Model Rules of Professional Conduct to better serve the needs of young lawyers in today’s job market. Most significant is a proposal to allow lawyers to move jurisdictions without retaking the bar exam if they have actively practiced for only three of the last five years. Another proposal would allow lawyers to practice in a new jurisdiction for up to a year while seeking admission to the bar. Other proposals seek to adapt current rules to account for the increasing impact of technology in communicating with prospective clients.

Court Considers Lawyers’ Ability to Pay Sanctions for Litigation Misconduct
The Recorder

The US Court of Appeals for the Ninth Circuit overturned a lower court decision that a lawyer must pay $360,000 in sanctions for litigation misconduct because he could not afford to pay. The lawyer was a solo practitioner with no assets, earning $20,000 a year. Judge Reinhardt of the Ninth Circuit stated, “Imposing sanctions in an amount many times greater than the attorney will ever be able to pay may in some instances represent only a futile gesture that does little either to compensate victims or to deter future violators.” The Court of Appeals’ decision turned on the interpretation of the statute that attorneys “may”—not “shall” or “must”—be required to pay sanctions.


Top UK Law Firms Improve Maternity Leave Policies
Legal Week

The issue of maternity leave has traditionally been a hurdle for female lawyers seeking to progress in their careers. Many top UK law firms are now offering generous packages to non-partner level lawyers. The packages include monetary benefits (Linklaters has one of the most generous policies), return to work bonuses (at Eversheds and Freshfields), and other incentives like emergency childcare or flexible working hours. The impression that women should wait until they make partner before having children is becoming outdated, and some firms are implementing programs to ensure female lawyers return to work.

Data Indicates Regional Growth of Minority Partners
The Legal Whiteboard

According to data published by the National Association for Law Placement (NALP) in their July 2012 Bulletin, in certain large and important markets diverse lawyers are ascending to partnership in significant numbers. The aggregate-level statistics do not paint a rosy picture of partner diversity as a whole, as less than 5% of partners at the firms were minorities. When disaggregated though, data indicated that specific geographic markets are showing substantial minority partnership growth. African-Americans saw strong gains in Atlanta and Washington DC; Asians were prevalent in Los Angeles, San Francisco, and the Pacific Northwest; and Hispanics showed encouraging growth in Houston, Dallas, Miami, and Los Angeles.

InterLaw Survey Highlights Disconnect on Perceptions of Diversity
The Lawyer

Based on a recent InterLaw diversity survey, 86% of legal professionals (lawyers and non-lawyers) feel their firms have well publicized and effective diversity strategies but the firms’ programs are not having the desired effects. Only 73% of male lawyers and 63% of female lawyers believe these policies are effective. Based on their findings, the authors of the survey recommend creating financial incentives for diversity targets and penalties if firms fall short of their goals. According to the data, 41% of female lawyers believe their pay is less when compared to others on the same pay scale with the same responsibilities.

Innovation & New Models

Law Firms Interaction and Collaboration in the Layout of Offices
Wall Street Journal

As law firms renovate thier offices, many are leaving behind the old model of private corner offices and large law libraries in favor of smaller, sometimes shared offices, large glass walls, and hi-tech conference spaces. With an increased emphasis on collaboration and teamwork, many law firms have designed common spaces such as coffee bars, cafeterias, and meeting rooms equipped with videoconferencing and other telecommunications technology. At Holland & Knight’s Washington office, for example, individual offices were moved into the center of the building while “lounge-like” team spaces were shifted to the corners. Other firms have switched to open plan models. These changes reduce rent costs—which can be as high as $1 to $2 million a month for large urban offices—while also encouraging partners, associates, and staff to work more closely together.

Bi-Lingual Attorney-Translators Performing Document Review
Wall Street Journal

Although an overcrowded legal market has made it difficult for many law school graduates to find permanent employment, the globalizing economy has led to the creation of opportunities for lawyers with translation skills. Since law firms generally do not retain a large number of multi-lingual lawyers, demand has increased for contract attorneys with the ability to review documents in foreign languages such as Chinese and Korean. Staffing agencies specializing in translation and document review, such as TransPerfect Legal Solutions, charge firms $75 to $150 per hour for legal services while the contract attorneys earn $45 to $100 per hour based on their expertise.

Public Interest

Foreign Lawyers Not Allowed to Plead in Bangladeshi International Crimes Tribunal
Financial Express Bangladesh

The Bangladeshi International Crimes Tribunal (ICT) was established to investigate and administer justice regarding crimes committed during the Bangladeshi Liberation War of 1971. Despite the fact that ICT has an international title, it does not allow foreign or international lawyers to plead. When asked about opportunities for non-Bangladeshi lawyers, law minister Shafique Ahmed confirmed that only Bangladeshi lawyers could plead a case in any court of the country, and that there is no scope for engaging a foreign or international lawyer in the ICT.

Program Notes

New Case Study Series: Robinson & White

The Robinson & White cases raise the challenges faced by the leaders of a global law firm as they sought to mold the firm’s compensation system to align with the firm’s strategy of encouraging entrepreneurship as well as teamwork. The cases raise questions about the delicate balance between rewarding entrepreneurial “heavy hitters,” while also providing a culture where teamwork and collaboration are valued. They detail the process Robinson & White undertook to diagnose the issues related to the compensation system and to gain buy-in from partners to change the system. The cases are available for purchase online.

Editor: Daniel L. Ambrosini
Managing Editor: Nicola Seaholm
Contributing Editors: Nathan Cleveland, Rachel Gibson, Nicholas Haas, Hakim Lakhdar, Pavan Mamidi, Mihaela Papa, Erik Ramanathan

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