The Association of Corporate Counsel Value Challenge

The Association of Corporate Counsel continues their Value Challenge in 2010, pursuing an initiative designed to meet head-on the seismic shifts currently taking place in the traditional delivery model and cost structure of legal services.

According to the ACC:

"With the economic meltdown, law firms are now facing additional pressures: loss of clients and business, reduced access to bank lines of credit, a need to downsize and better manage overhead, and at the same time, keeping as many people employed as possible.

Believing that solutions must come from a true dialog and a willingness to change things on bothsides, the ACC Value Challenge is based on the concept that firms can greatly improve the value of what they do, reduce their costs to corporate clients and still maintain strong profitability. Our task is to help shift the discussion to a focus on value and to find solutions that work for all sides."

It's noteworthy that as part of the value challenge, the ACC endorses a number of practical approaches to bring change to your company, one of which is to:

"outsource, offshore, and farm-shore process oriented work to increase efficiencies."

Also of note is their Covenant For Counsel, a philosophical agreement between client and counsel created to advance mutual goals. Included in the covenant are pledges to:

"Proactively offer value-based alternative fee structures"

and

"Seek to reduce our costs creatively and constantly"

Law School R.O.I.

The current economic recession, which according to the National Bureau of Economic Research is soon to enter its third year, has had two significant effects on law students.

1) Law school admissions have increased, as prospective students seek the shelter of an ostensibly secure profession.

2) The profession of law may not be as secure as it once was, with all reports showing decreased hiring and the postponement of new associate hiring (and even an instance of a law school asking incoming students to defer their start date.)

With that in mind, the New York Times' Economix column featured a recent research paper written by Vanderbilt professor Herwig Schlunk measuring the return on investment for a current law school education.

In general, the paper looked at what kind of salaries law students could have been pulling in if they weren't in law school, factored in some time value for that period, and added tuition to that "opportunity cost" to arrive at a number that needed to be surpassed by earnings as a lawyer.

For the group of law school applicants deemed Hot Prospects (those who would have made $80,000 a year without a law degree), the paper concluded they'd need to earn a starting legal salary of slightly more than $198,000 to break even on their law school investment.

Unfortunately, according to the ABA Journal:

"...top BigLaw starting salaries paid to a small fraction of the nation's graduating law students are now around $165,000. Even many major firms, however, are paying significantly less, and a number of law graduates are having difficulty finding legal work even at much lower salaries due to the economic downturn that hit the legal profession hard last year."

So, the cautionary note to prospective law school applicants is to run the numbers on your investment first. And an MBA might help with that.

More Year-End Numbers

The National Law Journal released the results of their 2009 census of the largest 250 law firms, and the numbers are predictably gloomy.

A few of the lowlights:

The number of employed attorneys at these top 250 firms plunged by more than 5,200. That's a 4% decline.

This is only the third year since the NLJ started tracking in 1978 that saw a decline. 1992 saw a 1% decline, and 1993 dropped 0.9%.

Of the top 75 firms, 15 had reductions of more than 100 lawyers.

The number of associate attorneys dropped by almost 9%.

Many firms declined to near or below where their numbers were five years ago.

113 firms reported deferring nearly 2,800 new associates.

Interestingly, the number of partners increased by .9%. Of the top 50 firms, 30 reported an increase in partners.

A consultant with Altman Weil, Ward Bower, concludes that "the cuts made were done primarily to preserve workloads for partners." Which means that clients can only conclude that work currently being done by partners is work that would have previously been executed by associates. And that is exactly what clients have been trying to avoid.

The National Law Journal has a number of accompanying features, analysis, and breakdowns.

To Tweet Or Not To Tweet

Any conversation about marketing legal services these days is bound to include a discussion about social media. For some professions and industries, Twitter and Facebook are a slam dunk.

For others, including attorneys, it's not quite as simple.

There are those who maintain that anybody not utilizing Twitter and Facebook are completely out of step. But Eric Turkewitz has an interesting blog post about the less discussed but equally relevant downside of social media as a professional marketing tool.

The first potential pitfall pertains to overly enthusiastic posting. Anyone who has been waiting on a colleague or vendor for work to be delivered, only to see semi-hourly tweets or FB posts, knows the resentment that can build.

The lesson here is to make your posts occasional and relevant.

The other potential downside to social media posts is the appearance of sloppy work. The nature of the legal profession requires reason, accuracy, thoughtfulness, and thoroughness. So a type-o riddled, grammatically butchered post is going to immediately defeat its purpose.

Now, many may think that the risk of undercutting your credibility with poorly written posts might be short lived. But, interestingly, they might be wrong.

Anecdotal evidence seems to suggest that the algorithms used in Google's searches disproportionately weight Twitter and Facebook accounts to appear on the first page of search results. According to Eric Turkewitz's personal research:

"I wondered, if a potential new client was given my name by another, and that person Googled me, what would they see?

Well, the first page of my results shows three separate social media sites: Twitter, Facebook and LinkedIn. They show up there despite the fact that I've not exactly been the biggest user of those sites over the last year.

So this is what the potential new client will see, even if you have an active presence on the web. Since I've written over 800 posts in this space since I started in November 2006, and received thousands of inbound links, I probably fit the definition of active presence. And yet, those three sites still manage to crowd out links from so many others."

Of course, this is all fluid, given google's very recent announcement of "social search", which may ultimately be a competitor of facebook, as well as their new agreement with twitter to bring real-time tweets to search results.

Regardless, the lesson for attorneys considering -- or already exercising -- a Facebook or Twitter presence is this: Your social media contributions may carry disproportionate weight within search engine results.

Potential clients may form opinions and make decisions based on those search results.

If you are an attorney using social media, do a general google search on yourself and monitor the page ranking of your social media accounts.

And then tweet accordingly.

Sam Glover

Continuing with our discussion on lawyers embracing an entrepreneurial approach to their work, Legal Rebels recently featured attorney Sam Glover.

Mr. Glover, a Minnesota-based legal entrepreneur who manages a consumer rights practice, is also the author of the always useful lawyerist.com, which manages to weave together insightful commentary on legal practice, technology, productivity, and marketing.

Some of the highlights from Mr. Glover's profile regarding the state of the industry:

• Today, the internet-informed public needs lawyers less, but there are more lawyers than ever.

• There is little imagination in the practice of law.

• There are many smart but unemployed lawyers with little to lose by trying some new things.

• Lawyers must think more like entrepreneurs. Clients' changing needs will demand it. The economy demands it.

• To distinguish your practice from the next, look for an opportunity to serve new clients, or a new way to serve existing clients.

• Never be afraid to experiment. All you stand to lose is money. But if your experiments work, you could make even more money and gain happier, more-loyal clients and employees.

Taking Issue

Misleading. At best.

Law.com reported today on Kroll Inc.'s annual survey on corporate fraud. And for some reason law.com used the following headline:

"Legal Pitfalls of Outsourcing May Outweigh Benefits, Says New Survey"

Except, that's not at all what Kroll's report says.

The first sentence of law.com's post reads:

Companies that choose to outsource work to save money may be buying themselves more legal trouble than it's worth. That's one conclusion from Kroll Inc.'s annual global corporate fraud survey released Monday.

Except, um, that's not even close to any conclusion reached by the survey.

Based on that headline (at a legal-based web site) and that opening sentence, you might think the survey discussed Legal Outsourcing. It doesn't.

Based on the headline and that opening sentence, you might think the survey discussed the legal ramifications of other types of outsourcing. It doesn't.

The second paragraph of law.com's post opens with:

Asking if outsourcing is really worth the risk, the survey says companies often make the decision "without a thorough assessment of the risks involved in determining what is to be outsourced, and to whom."

The quote from the Kroll's report is pulled from a section solely dedicated to the discussion of IT Outsourcing. The title of that section is IT Outsourcing: Is it Worth the Risk?

But not even in this section are legal ramifications discussed. The intent of this section of the report -- in the report's own words -- is to present "a strong reminder that technology companies, including IT outsourcing ones, are vulnerable to the same common frauds - such as internal financial fraud, vendor or procurement fraud, and the theft of physical assets - that can occur in any other business."

The survey never intimates that the risks outweigh rewards. The survey simply says do your due diligence. Just like you would do in any other business capacity.

What does the report actually have to say?

It says that the financial services industry has been hit the hardest by fraud.

It also says that the professional services sector (which includes legal services and legal outsourcing) reported the lowest level exposure to fraud.

So, at the end of the day, the report says that while the internet has expanded business services, it has also created additional sources of potential fraud. Nothing earth shattering there. The report says to make sure that any vendor or business partner has proper data security safeguards in place.

Again, business as usual.

But nowhere in the survey does it conclude that legal pitfalls may outweigh the benefits of outsourcing.

Unbound

Unbound: How Entrepreneurship is Dramatically Transforming Legal Services Today is a timely and relevant new book for anyone tracking emerging trends in the legal profession.

Wasting no time, the opening paragraph dives right in with observations we've been discussing for the better part of this year:

"The financial and economic crisis of 2008 delivered the final blow to any skeptics still resisting change in the legal industry. The legal industry is now rushing toward dramatic transformation. Change is long overdue... Over the next three to five years, the legal landscape will be dramatically reshaped. Law will continue on its global march. Even small firms are outsourcing legal support work overseas."

Author David Galbenski founded Lumen Legal, a legal staffing and consulting company, in 1993. His fifteen years as a legal consultant has informed his identification of a number of major trends that he believes will affect the legal industry in the coming few years. Some of those trends are:

• New ways to buy legal services. Consumer demands will force the legal industry to behave less like a profession and more like a business.

• New ways to provide legal services. Globalization is a force that will expand the ways in which legal services are provided to the end consumer.

• New ways to organize legal services. Tasks will become unbundled, as a result of both business pressures and globalization.

• New categories and types of people will be called upon to perform legal services.

Unbound underscores many of the opinions in Richard Susskind's The End of Lawyers? Rethinking the Nature of Legal Services.

Additional quotes from the Financial Times' review of Unbound:

"The highlight of the book is a series of interviews with leading general counsel, who explain the changing global landscape their companies operate in and the pressures in-house lawyers face to rein in costs since the economic collapse. Their observations are stark and should raise the hairs on the arm of every managing partner, group practice leader and legal marketing expert in the business."

"The legal industry is facing unprecedented change, and law firms that don't modify the way they run their businesses face extinction."

"Law firms may be coping with a downturn in business by trimming their costs, but the recession is moving the entire industry toward a range of new, entrepreneurial models that will eventually put the legal industry more in line with other types of businesses."

Real Overhaul in Associate Hiring?

Two weeks ago we discussed how some major firms were rethinking their summer apprenticeship programs.

But last Friday's article in the Boston Business Journal indicates a far more systematic revisiting of the entire recruitment model, and at an even faster pace than previously noted.

The BBJ's title says a lot: Traditional Associate System Collapsing Under Economic Pressure.

According to the article: "Many law firm leaders now are taking the time to rethink the recruitment process soup-to-nuts, from pondering the wisdom of summer programs to slashing first-year salaries."

You know it's significant when the article is peppered with quotes like:

“It is antiquated. It just does not make economic sense. It does not make good business sense,” said John V. Snellings, hiring partner at Nixon Peabody LLP

“The age-old system hit a brick wall with the sharp downturn,” said Brian Bickerton, partner at legal staffing firm Major, Lindsey & Africa. “Never before has there been any kind of real consideration by firms to change the ways they recruit and hire."

“My guts says that there are bigger changes coming,” said Randi Friedman, assistant dean at Northeastern University School of Law. “It’s going to be the beginning of a new era."

“I spend a lot of time out in the world talking to clients. One thing I hear over and over again is that they are not willing to pay the kinds of hourly rates for young associates that they used to,” said Walter G.D. Reed, managing partner of Edwards Angell Palmer & Dodge. “Either we’re going to have to come up with a new way of pricing our services or we’re going to have to figure out a different way of bringing young lawyers along.”

It's a refrain that's becoming more and more familiar. 1) The historic summer associate/hiring pattern is based on little other than tradition at this point. 2) Clients are less and less willing to pay large hourly fees for associate-level work.

Now, for the first time, large firms seem to be legitimately open to evaluating new approaches to associate-level work.

More Movement Away From Hourly Billing

LegalWeek.com reported last week that both Mayer Brown and Reed Smith are evaluating new cost structures that will bring fixed or capped fees for transactional work.

"Mayer Brown's senior management is in the process of reviewing how the firm bills clients and is considering proposals to overhaul fee structures for core transactional practices including corporate, banking and real estate.

The proposed changes, which the firm said have been accelerated as a result of client demand for greater certainty during the downturn, would see Mayer Brown offering fixed fees for all transactional work, as well as more regularly using abort agreements and success fees.

Separately, Reed Smith has also been looking at changing fee structures within its transactional practices. The firm has a committee made up of partners from across the firm reviewing proposals and is looking at an increasing use of fixed or capped fees for clients within its financial industry group (FIG), corporate and real estate practices, for transactional work."

Sure, this is an important development simply because it signals the readiness of two of the larger global firms to reassess historically entrenched billing practices.

But, actually, the implications are even more profound. This development is more than a possible trend in cost structures and more than a comment on difficult economic times.

Fixed pricing for transactional work, by definition, encourages the unbundling of legal services. The act of articulating an a la cart menu of legal services is, in itself, a form of unbundling.

Transactional pricing isolates the tasks being performed and separates them from other services. And that is inherently different than the traditional business model of a firm offering a stew of services, all intertwined, and all covered by the umbrella of billable hours.

As we quoted Robert J. Ambrogi back in April:

"Legal services are evolving from a highly bespoke, highly customized product toward becoming a commodity. As part of this evolution, legal work will be unbundled into its constituent tasks and many of those tasks will be standardized and systematized."

Another brick in the wall.

Adjusting to Fewer Associate-Level Positions

As noted recently in the ABA Journal, many large firms are delaying hiring new associates, and some are putting their summer apprenticeship programs on hiatus altogether.

Obviously, though, a decreasing number of entry-level associate positions doesn't necessarily mean there is less associate-level work to be done.

That's why one of the major challenges facing firms today is reshaping business practices to accomplish associate-level work without charging clients senior-level rates.

One of the solutions many firms are turning to is the flexible use of off-site associates for legal research.

An example of this trend is LegalEase's own Research Pathfinder, a program that offers thoroughly researched breakdowns of all relevant case law, statutes and any other opinion, law review, and any secondary research related to a specific legal issue.

All within 24 hours and all for a $250 flat fee.

LegalEase's Research Pathfinder applies two levels of quality checks by U.S. attorneys to our network of global attorneys to provide the 24-hour turnaround.

You can view additional information on LegalEase's Research Pathfinder here.

A Change in Seasonal Hiring

As we discussed back in February, the seasonal hiring pattern at large law firms is a tradition that becomes ripe for reconsideration during tough economic times (and potentially altogether as the professional landscape evolves).

The practice of offering employment to a predetermined, fixed number of newly minted law school grads at the end of each summer is based on the expectation of a corresponding level of attrition from more senior attorneys.

Many of us, though, anticipated that the current sea of churning economic uncertainty would result in far fewer senior staffers choosing to jump ship. Fewer empty deck chairs would mean fewer new hires, especially with many firms working to trim overall headcount.

Well, those predictions are now actuality.

The ABA Journal reported this last week that many large firms are delaying job offers to summer associates.

This comes as especially unwelcome news to current second year law students after last week's reports that many large firms a scaling way back (or even eliminating) their 2010 summer apprenticeship programs and recruiting.

Again, according to the ABA Journal:

• "Skadden, Arps, Slate, Meagher & Flom has cut the size of its 2010 summer program by more than half.

• Morgan, Lewis & Bockius has canceled its summer program and all on-campus recruiting.

• DLA Piper and Orrick, Herrington & Sutcliffe have postponed recruiting.

• Law firms opting against interviews at Yale include Baker & McKenzie; Milbank, Tweed, Hadley, & McCloy; and White & Case.

• Law firm interviews are down by a third or a half at New York University, Georgetown, Northwestern and other top law schools. It’s even worse at lower-ranked schools."

The wrinkle here is that this will leave organizations top heavy with more senior attorneys, causing dispraportionate billing fees for associate level work, potentially creating further demand for "virtual associates" available through LPOs.

Here Come The Numbers

As fiscal years start coming to a close, official revenue figures are starting to confirm everyone's expectations.

As reported at Am Law Daily (and discussed at Above The Law), Baker McKenzie's fiscal year ended on June 30th, and last year's 2nd highest revenue generating firm reported a 3% drop in global revenue and a 17% drop in profits per partner due to the recession.

"The financial crisis progressed into an economic recession that has been very challenging for our clients, for all law firms and for us,” says John Conroy, chairman of the firm’s executive committee.

To put Baker McKenzie's numbers in perspective, this is a firm whose fiscal year 2007 "reported profits per partner of $1.06 million, breaking the $1 million mark for the first time in the firm’s history. The firm reached another milestone in fiscal year 2008 when total revenues came in at $2.2 billion, surpassing the $2 billion barrier for the first time."

However, Baker McKenzie has also been a leader in terms of outsourcing legal work, and past year's numbers have been anchored by a global approach that encompasses more than 3,900 lawyers at 67 offices in 39 countries.

Given the squeeze in profit per partner this year, it won't be surprising to see an even greater emphasis on pushing work to more efficient cost centers.

And, while we can only speculate on how much worse Baker McKenzie's numbers would have been without their aggressive outsourcing stance, it will be interesting to see how comparable firms' numbers stack up as the year progresses.

Shameless Self-Promotion

LegalEase is pleased to introduce our Legal Process Outsourcing Handbook, free for viewing and/or downloading here.

As increasing numbers of both in-house and firm-based counsel adopt new strategies to respond to the evolving legal marketplace, The LPO Handbook provides a one-stop resource to help you evaluate whether strategic use of LPO is an efficient addition to your business initiatives.

Connecting Dots

As anyone who's worked on a large project knows, you can start to view the world through the prism of that project. New data gets filtered through the context of that project; patterns emerge.

Which is probably why some recent essays and analysis of fields unrelated to the legal profession are resonating with similarities.

Take, for instance, a very informative and insightful recent post from Barrett Garese, founder and CEO of Spytap Industries, a company specializing in online content and social media strategies.

You can read it in full here, but the upshot is this:

The entertainment industry is at a crossroads because the internet has essentially acted as a disruptive technology, in that it is providing alternative access to content and/or services that were previously the sole domain of thoroughly entrenched, system-wide gatekeepers.

Read that paragraph again, and we could be talking about the legal profession.

Garese notes that "the argument is often made that the internet is putting thousands of people out of work and killing off professional content."

This same argument is heard in legal office hallways, as well, as the internet has modified access to legal content (i.e., online legal forms sites and legal information sites), the cost of legal work (LPO, virtual attorneys, and virtual associates), and the physical proximity of legal service providers (i.e., skype, VOIP, social networking, and every other online tool that allows people thousands of miles apart to share a virtual office).

But Garese dismisses that argument, saying "This may or may not be true, however it’s irrelevant for the following reason: disruptive technologies always put people out of work…temporarily."

Temporarily. Because new models emerge. That is fact. Not a question of 'if', but 'what' and 'when'. Just like a forest fire is nature's way of clearing out the dead mass so that new growth can emerge.

While Garese's summation is aimed at the entertainment industry, it is also so directly appicable to the legal profession that it's worth quoting in full.

Big changes to established industries are both painful to the aforementioned established companies, and an opportunity to the more nimble. Business models will change drastically over the next few years to compensate and remain relevant, but when everyone is comfortable there’s no room or interest in changes.

Right now, entertainment is in a low-to-mid-level state of chaos. There’s little confidence in the status-quo, and unlike past decades no one seems to know what the future will bring. This means that those who are willing to experiment will have first opportunity to rewrite the rules. Those who are content to live with the status quo will be replaced. This is equally true across the entire scale of entertainment, from large to small. We’re well placed in a disrupted field, and that presents unprecedented opportunities.

So what is the future of entertainment? It’s up to us to decide. All of us. Because we now have a seat at the table. Fortune (in all forms) favors the bold.

So grab a seat and speak up.

Legal Rebels

The ABA Journal has started a new feature they're calling Legal Rebels. Their intent is to shine a light on the current transformation taking place in the business of the legal profession.

Obviously, they're preaching to the choir, as far as we're concerned.

The opening paragraphs from their new website frame it nicely:

In these times of great economic chaos lies great opportunity.

The legal profession is not just struggling through a recession, but also undergoing a structural break with the past. There is a growing consensus that the profession that emerges from the recession will be different in fundamental ways from the one that entered it.

Dozens of lawyers nationwide aren't waiting for change. Day by day, they're remaking their corners of the profession. These mavericks are finding new ways to practice law, represent their clients, adjudicate cases and train the next generation of lawyers. Most are leveraging the power of the Internet to help them work better, faster and different.

The Legal Rebels project will profile these innovators and describe the changes they are making. It will tell their stories in the ABA Journal, on this website and through a variety of social media channels using text, pictures, audio and video. The first of these profiles will appear here on August 25. Several will be added weekly through the end of November.

We're looking forward to keeping an eye on the Legal Rebels project.

Large Firms Resisting Change?

As readers of this blog know, much of our focus is on emerging trends in the legal profession. And, at this juncture in time, most observers agree that the profession is in the midst of some profound changes in the business of law.

A flattening, global market; legal process outsourcing; captive offshore legal departments, virtual attorneys and virtual associates; web based legal products; evolving business and billing models; and the U.K.'s Legal Services Act 2007 are just a handful of emerging trends adding new colors to the legal canvass.

However, a recent study indicates that for all the talk and analysis, there may be significantly less change or innovation taking place in large firms. At least significantly less than GC's would like.

As reported this month at law.com, a survey released a few weeks ago by Altman Weil had this to say about General Counsels' opinions regarding the large firms with whom they work:

"75 percent of the responding chief legal officers rated their law firms between zero to four on a 10-point scale, indicating their opinion that firms had little or no interest in change. Only 5 percent of the respondents ranked their outside law firms between eight to 10, with 20 percent falling somewhere in the middle.

"This is a dramatic vote of no confidence from chief legal officers," Altman Weil Principal Daniel J. DiLucchio Jr. said in a statement. "Either many law firms just don't understand that clients today expect greater value and predictability in staffing and pricing legal work, or firms are failing to adequately communicate their understanding and willingness to make real change. In either case, it's a big problem."

This perception on behalf of GC's comes after more than 60% of respondents reported putting legitimate, non-negligible pressure on their law firms to change their value proposition.

So, given what appears to be some dissatisfaction in the degree of change being offered by large firms, it can't be encouraging for these firms to know that the survey also reported that 40% of GC respondents expect to give less work to outside firms this year.

To put that number in perspective, from 2000 through 2007, that expectation never surpassed 20%. Now, in a matter of two years, the expectation to give less work to outside firms has doubled.

While this may simply be a temporary blip fueled by the sour economy, history tells us that this window of time may well see some alternative models take hold that will provide GC's with the evolution they are seeking.

Law Firm Apprenticeship Programs

Law.com recently profiled the growing implementation of apprenticeship programs for first-year attorneys.

Notable firms across the country embracing the apprenticeship model include Howrey; Philadelphia's Drinker Biddle & Reath; labor firm Ford & Harrison; Ohio/Kentucky firm Frost Brown Todd; and Dallas' Strasburger & Price.

"Firms are putting new recruits through additional apprenticeship programs that they say will better train their attorneys for life at a law firm and for handling clients. Think of it as the equivalent of a medical residency, only with suits instead of scrubs."

"The latest -- and so far largest -- firm to move to an apprenticeship model, 659-lawyer Howrey, announced its program last week. Starting next year, first-years at the firm will get a pay cut -- from $160,000 to $100,000 in base pay plus a $25,000 bonus to pay down law school loans -- and they'll spend a good portion of their time attending classes with partners and shadowing them on client matters. The apprenticeship period will last two years.

"Robert Ruyak, Howrey's managing partner, said associates will be doing far less client work, and when they do work on client matters it won't necessarily be billed to clients. "We really want them to focus on learning the skill they need to be first-rate litigators," Ruyak said."

"The old model is broken," Ruyak said. "You're bringing on these extremely bright individuals and letting them waste their careers buried in documents where they aren't really learning the practical skills it takes to be a lawyer."

Ah, yes. Here we see -- yet again -- another real-world distinction between the two separate job functions that have been each historically covered by the umbrella term attorney. On the one hand, there is the redundant, commoditizable, associate level work, and on the other hand we have the role of adviser, counselor, manager, and/or litigator.

As we discussed previously, while the future of the legal profession is changing, the need for the experience, insight, and perspective of a seasoned attorney will always be in demand.

These apprenticeship programs seem to acknowledge that, and then take it a step further by explicitly separating the training of litigators/advisers/counselors from the redundant, high volume work that can be executed at a more cost-efficient level, either by in-house staff attorneys or -- with even more cost-efficiency -- by highly trained attorneys at an LPO.

A Lesson from the Engineers

Marketplace, a radio program run on many NPR stations, recently discussed how the sour economy was eliminating engineering jobs at a faster rate than many other professionals, with high profile companies looking to offshore their engineers.

Obviously, this sounds very familiar to legal professionals.

Interestingly, the American Society of Civil Engineers read the writing on the wall long enough ago to start revising their Body of Knowledge, which was created in a 1998 policy statement to define prerequisites for licensure and practice.

Last year the ASCE published Civil Engineering Body of Knowledge for the 21st Century, Preparing The Civil Engineer for the Future, Second Edition.

The purpose of the book is to acknowledge new professional challenges and identify improvements to the education and licensure process. The book states:

"The manner in which civil engineering is practiced must change. That change is necessitated by such forces as globalization, sustainability requirements, emerging technology, and increased complexity with the corresponding need to identify, define, and solve problems at the boundaries of traditional disciplines."

Again, to those following the legal profession, there is a familiar echo: Globalization. Emerging technology. Problem solving at the boundaries of traditional disciplines.

Of equal importance, the ASCE also includes a telling word choice in one of their stated goals for the book.

" [to] focus on outcomes to the proposed changes in the way civil engineering is taught and learned, including the knowledge, skills and attitudes necessary for entry into professional practice."

Pretty striking. The American Society of Civil Engineers -- not a group historically known as wild-eyed, knee-jerk, doom sayers -- is 1) stating that the manner in which they practice their profession must change and, 2) suggesting that a change in attitude is a key component to succeeding in the 21st.

As attorneys peer into the coming years, it might not be a bad idea to steal a page from the ASCE's Body of Knowledge for the 21st Century and acknowledge that a change in attitude may be a successful strategy to address the challenges of globalization, emerging technology, and problem solving at the boundaries of traditional disciplines.

The Business of Law vs. The Service of Legal Counseling

The New York Times ran an article last week on how the most venerable law firms -- we're talking multinational, centuries old, most upper of the upper crust firms -- continue to purge their ranks in unprecedented fashion.

As anyone who is paying attention knows, the landscape of how legal work is organized and delivered is shifting beneath us as we speak. What no one knows exactly is how it's all going to shake out.

But there were a few more interesting signposts offered in the Times article that may at least help shape the way we perceive and articulate it.

Here is what the New York Times had to say (and I'm reordering some of their paragraphs):

"The gentleman’s profession of the law is becoming a vestige of the past, removed enough from reality to be remembered, like phone booths or fedoras."

"... the natural order of this world has been set on end by the economic crisis and the possible disappearance of fixtures like the pyramid system (under which associates are thrown en masse at certain cases, fattening the fees), and the billable hour itself (increasingly replaced by flat rates or retainers in a client’s market). The tectonic plates have begun to shift in a nauseating manner, bringing fear, ambiguity and psychological scars."

Philip K. Howard, a senior partner at Covington & Burling, another multinational firm, laments
that as the bottom line increases in importance, the traditional role of the lawyer as a trusted counselor slips away.

In another passage, Mr. Howard underscores his observation, saying that he's not really "interested in the business of law".

In other words, Mr. Howard is equating the current emphasis on the bottom line with the "business of law", and distinguishing that from the role of lawyer as counselor.

And this is consistent with our conversation regarding the distinction between legal information and legal advise.

The unbundling of legal services that we've been watching unfold in front of us can be framed in this way: the business of legal work is being separated from the service of legal counseling.

If this way of looking at it is accurate, and if this divide -- between the business of legal work and the service of legal counsel -- continues to solidify, that would seem to argue for the continued growth of LPO as attractively priced virtual associates and virtual attorneys to contribute to the business of legal work.

Legal Information vs. Legal Advice

The unbundling of traditional legal offerings -- which is an emerging trend central to Richard Susskind's recent book The End of Lawyers -- has been a hot topic in these parts lately.

The idea of different legal services becoming available in new venues and formats is one that we're seeing manifest itself in a number of ways from web-based companies offering legal forms, legal facts, entreprenuerial start-up guidance, copyright filing, and more.

And it's happening in both the U.S. and the U.K.

In fact, the U.K.'s Legal Services Act 2007 is a national initiative providing a legislative framework to actually reform the way legal services in England and Wales are regulated and delivered.

The Act specifically allows legal services "to be provided under new business structures" with a stated goal of promoting "competition and innovation".

The BBC recently reported on this, highlighting that "future providers, including large retail brands, could seek a license to offer legal services."

The article includes opposing views, including an attorney who says the move "demonstrates utter contempt for the consumer of legal services. The solicitor profession faces being all but wiped out by a government seemingly intent on robbing the public of access to good quality, local legal advice."

Ah, but here is something to keep in mind: As we talk about the fragmenting of legal offerings, it's important to be consistent in distinguishing between legal information and legal advice.

In fact, it could be argued that the BBC's reporting fails to do this. Or, at the least, it allows for the interchanging of the terms.

The American Bar Association distinguishes between legal information and legal advice. Legal information is general, non case specific, and can be provided by anyone. Legal advice, on the other hand, is "provided by a trained lawyer who uses his or her knowledge of the law to tell you how the law applies to your specific circumstances."

When listening to all the voices on both sides of the conversation, it's important to keep the distinction in mind and remember that legal advice isn't going anywhere.

Legal experience, insight, and strategy aimed at an outcome will always be in demand. What is evolving, and will continue to evolve, is how the more rudimentary and "commoditizable" aspects of the law will be unbundled and delivered.