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ABA Symposium Panelists Offer Some Sound Advice for Law Students and Young Lawers
I had the pleasure of moderating a panel at the American Bar Association Section on Environment, Energy, and Resources (SEER) Annual Spring Symposium, held this year at Vanderbilt Law School last Friday, May 2nd. SEER Chair Bill Penny had the vision to build the symposium around the themes of the state and future of the practice, so it was a natural to host the event at Vanderbilt and I was glad to be a part of it.
My three panelists made for a powerhouse of energy, environmental, and resources practitioners: David Hill, Executive VP and GC of NRG Energy and former GC of the US Department of Energy; Ann Klee, VP of Environment, Health, and Safety at General Electric and former GC of the US EPA; and Janice Schneider, partner at Latham & Watkins in DC and just confirmed by the Senate the day before the symposium as Assistant Secretary of the Department of the Interior for Land and Minerals. Needless to say, I saw my job as moderator to be staying out of the way so my panelists could offer insight and advice, which they did immeasurably. Here I’ll distill what they said of most importance to law students and young lawyers about navigating the turbulence of today’s legal practice world and building a practice:
Don’t Skip the Basics: While it is enticing to think of riding a new trend like 3D printing to capture its practice opportunities, all the panelists agreed they do not hire young lawyers to be trend-spotters—they hire young lawyers who are good lawyers. That means lawyers with relevant domain knowledge, the ability to write crisply and clearly, strong communication skills, the capacity to work well in groups, the ability to manage relationships with clients, regulators, competitors, and the public, and the rest of what goes into the foundation of good lawyering. And don’t be a jerk.
Follow Emerging Technologies: Once you have the basics down, what’s the best way to spot and capitalize on emerging trends? The panelists agreed that, at least for the energy, environmental, and resources practice areas, emerging technologies drive legal change. Three emerging technologies that got the most attention were nanomaterials, distributed energy, and 3D printing. Distributed energy technology, for example, will change the level of control energy consumers have over their energy profile, thus leading to profound changes in the energy utility and distribution industries that will demand new legal regimes.
Learn Something About How Businesses Operate: Whether your practice is in a firm, government, NGO, or in-house, business actions and decisions drive an enormous slug of legal practice in the US. So it can’t hurt a law student or young lawyer to learn a bit about how businesses operate. Take basic law courses in corporate law, mergers and acquisitions, finance, etc., and even take some classes in a business school while in law school.
The Rise of Private Governance: One theme that spun through my panel and a panel later in the day was the increasing importance of private regulation as a legal practice field. The example my panel gave was supply chain regulation, in which a company demands upstream suppliers meet specified performance or product standards, embodied in contract terms, for environmental quality which often go above and beyond minimum standards established in public regulation. Not all regulatory practice, in other words, is about public regulation—your client’s customer might be its most aggressive regulator. (For more on this theme, see the work of my Vanderbilt colleague Mike Vandenbergh.)
Beware of Buzzwords: If you dream of being a “sustainability lawyer” or a “climate change lawyer,” the panelists had some sobering advice for you: they don’t hire “sustainability lawyers” or “climate change lawyers.” They hire lawyers with expertise in fields that are relevant to how their clients decide they need to respond to sustainability and climate change, in fields like air pollution, water pollution, endangered species, etc. Their advice was to build your expertise around relevant statutory regimes (Clean Air Act, Endangered Specie Act, Federal Power Act, etc.) to best position yourself to assist a client that is developing or implementing its sustainability and climate change policies.
Embrace Serendipity: Resonating with one of my Law 2050 class themes, the panelists all agreed that, now more than ever, young lawyers need to jump on opportunities to deepen and diversify their expertise, including taking chances to try new practice fields and settings.
Big Data and Preventive Government: A Review of Joshua Mitts’ Proposal for a “Predictive Regulation” System
In Minority Report, Steven Spielberg’s futuristic movie set in 2050 Washington, D.C., three sibling “pre-cogs” are hooked up with wires and stored in a strange looking kiddie pool to predict the occurrence of criminal acts. The “Pre-Crime” unit of the local police, led by John Anderton (played by Tom Cruise), uses their predictions to arrest people before they commit the crimes, even if the person had no clue at the time that he or she was going to commit the crime. Things go a bit awry for Anderton when the pre-cogs predict he will commit murder. Of course, this prediction has been manipulated by Anderton’s mentor and boss to cover up his own past commission of murder, but the plot takes lots of unexpected twists to get us to that revelation. It’s quite a thriller, and the sci-fi element of the movie is really quite good, but there are deeper themes of free will and Big Government at play: if I don’t have any intent now to commit a crime next week, but the pre-cogs say the future will play out so that I do, does it make sense to arrest me now? Why not just tell me to change my path, or would that really change my path? Maybe taking me off the street for a week to prevent the crime is not such a bad idea, but convicting me of the crime seems a little tough, particularly given that I won’t commit it after all. Anyway, you get the picture.
As we don’t have pre-cogs to do our prediction for us, the goal of preventive government–a government that intervenes before a policy problem arises rather than in reaction to the emergence of a problem–has to rely on other prediction methods. One prediction method that is all the rage these days in a wide variety of applications involves using computers to unleash algorithms on huge, high-dimensional datasets (a/k/a/ Big Data) to pick up social, financial, and other trends.
In Predictive Regulation, Sullivan & Cromwell lawyer and recent Yale Law School grad Joshua Mitts lays out a fascinating case for using this prediction method in regulatory policy contexts, specifically the financial regulation domain. I cannot do the paper justice in this blog post, but his basic thesis is that a regulatory agency can use real-time computer assisted text analysis of large cultural publication datasets to spot social and other trends relevant to the agency’s mission, assess whether its current regulatory regime adequately accounts for the effects of the trend were it to play out as predicted, and adjust the regulations to prevent the predicted ill effects (or reinforce or take advantage of the good effects, one would think as well).
To demonstrate how an agency would do this and why it might be a good idea at least to do the text analysis, Mitts examined the Google Ngram text corpus for 2005-06, which consists of a word frequency database of the texts of a lot of books (it would take a person 80 years to read just the words from books published in 2000) for two-word phrases (bi-grams) relevant to the financial meltdown–phrases like “subprime lending,” “default swap,” “automated underwriting,” and “flipping property”–words that make us cringe today. He found that these phrases were spiking dramatically in the Ngram database for 2005-06 and reaching very high volumes, suggesting the presence of a social trend. At the same time, however, the Fed was stating that a housing bubble was unlikely because speculative flipping is difficult in homeowner dominated selling markets and blah blah blah. We know how that all turned out. Mitts’ point is that had the Fed been conducting the kind of text analysis he conducted ex post, they might have seen the world a different way.
Mitts is very careful not to overreach or overclaim in his work. It’s a well designed and executed case study with all caveats and qualifications clearly spelled out. But it is a stunningly good example of how text analysis could be useful to government policy development. Indeed, Mitts reports that he is developing what he calls a “forward-facing, dynamic” Real-Time Regulation system that scours readily available digital cultural publication sources (newspapers, blogs, social media, etc.) and posts trending summaries on a website. At the same time, the system also will scour regulatory agency publications for the FDIC, Fed, and SEC and post similar trending summaries. Divergence between the two is, of course, what he’s suggesting agencies look for and evaluate in terms of the need to intervene preventively.
For anyone interested in the future of legal computation as a policy tool, I highly recommend this paper–it walks the reader clearly through the methodology, findings, and conclusions, and sparks what in my mind if a truly intriguing set of policy question. There are numerous normative and practical questions raised by Mitts’ proposal not addressed in the paper, such as whether agencies could act fast enough under slow-going APA rulemaking processes, whether agencies conducting their own trend spotting must make their findings public, who decides which trends are “good” and “bad,” appropriate trending metrics, and the proportionality between trend behavior and government response, to name a few. While these don’t reach quite the level of profoundness evident in Minority Report, this is just the beginning of the era of legal computation. Who knows, maybe one day we will have pre-cogs, in the form of servers wired together and stored in pools of cooling oil.
Racing with the Legal Computation Machine at the Inaugural Center for Computation, Mathematics, and the Law Workshop
I took a deep dive last week into the world of legal computation, to see just how far it has come, where it is going, and how transformative it will be as a force in legal thought and practice. I was provided this opportunity as a participant in the inaugural workshop of the University of San Diego Law School’s new Center for Computation, Mathematics, and the Law (CCML). (Before going into the details, let me add that if one is going to attend a workshop, USD is one heck of a nice place to do it! To emphasize the point, and to highlight the impact the CCML already is having, the International Conference on Artificial Intelligence and Law has selected USD as the site for its 2015 annual meeting.) Ted Sichelman and Tom Smith at USD Law are the founders and directors of the CCML, and the workshop will rotate annually between USD and the University of Illinois Law School, where patent law expert Jay Kesan will coordinate the program.
By way of disclaimer, I have to emphasize that I am not a Comp Sci guy. My math ended with Calculus II, my stats ended with multivariate regression, and my coding ended with SPSS and Fortran, and all are in the distant past. To say the least, therefore, the workshop was a humbling experience, as I was reminded at every turn that I was not the smartest guy in the room! So I approached the workshop through the eyes of Law 2050—I don’t need to know how to code to know how the end product works and to assess its potential to influence legal theory and practice. From that perspective, the workshop revealed an astounding and exciting array of developments. All of the presentations were tremendously well done; here is a taste of those that resonated most with the Law 2050 theme:
Paul Ohm (University of Colorado Law School) presented a fascinating study of how to parse the U.S. Code text to extract instances of defined terms. While at the workshop, he coded a software search engine that instantaneously returns links to all provisions in the Code defining a particular term. I tried it—it works!
Dan Katz (Michigan State University Law School) presented his research team’s ongoing work on a classification algorithm for predicting affirm/reverse outcomes of U.S. Supreme Court decisions. Previous work on this front (Ruger et al., 2004) pitted expert lawyers against a classification tree algorithm applied to one year of Court decisions, with the computer’s accuracy outperforming the experts by 75% to 58%. Dan’s team applied a more advanced “random forests” classification approach to the last 50 years of Court decisions and maintained accuracy levels of 70%.
Kincho Law (Stanford Civil Engineering) presented a robust text parsing and retrieval project designed to allow the user to extract and compare regulations pertaining to specific topics. For example, if the user is interested in water toxicity regulations for a particular contaminant, the program identifies and compares federal and state regulations on point. His team also has embedded a plethora of information into many of the regulations (e.g., links to relevant regulatory documents) and has also embedded formal logic statements for many regulations, allowing the user to treat the regulations as a true set of coding.
Jay Kesan (University of Illinois Law School) demonstrated another text parsing and retrieval project aimed at unifying the various databases relevant to patent lawyers, including all the patents, court litigation, scientific publications, and patent file wrappers in the biomedical technology domain.
Harry Surden (University of Colorado School of Law) delved into what he calls “computable contracts,” referring to the trend in finance to embody contractual terms entirely as computer code. These “contracts” allow computers to understand the terms and generate real-time compliance assessments. His project assesses the conditions under which a broader array of contracting practices might move to this computable contract format and the implications of doing so.
Seth Chandler (University of Houston) gave us a deep dive into the Affordable Care Act with a demonstration of software he has developed to extract and evaluate a variety of important analytics from the database available at healthcare.gov.
David Lewis (Independent Consultant) outlined the use of predictive coding in e-discovery and presented the preliminary results of a study comparing human manual document review and computer predictive coded e-discovery accuracy based on a large (500K documents) real-world discovery event. The results suggest that predictive coding, while presenting challenges, has substantial promise.
Henry Smith (Harvard Law School) and Ted Sichelman presented work on legal entitlements illustrating the potential for legal computation to advance legal theory. Ted’s project carefully examines how legal entitlements can be represented in formal, computable logic models, and together they are developing a model for computing the “modularity” of real property entitlements using network analytics. By representing legal entitlements as networks of rights, duties, privileges, and powers, they propose a method for measuring the degree to which a property legal regime has departed from the state of fully unrestricted right to use and exclude.
Jack Conrad (Thompson Reuters R&D and President of the International Association for Artificial Intelligence and Law) explained the importance of the “use case” in developing applied uses of legal computation—i.e., what are you going to use this to do?—and also emphasized the importance of evaluation of experimental efforts using standard test sets and metrics.
Last but by no means least, Roland Vogl of Stanford’s CodeX Center for Legal Informatics Skyped in an overview of what CodeX is doing to advance information retrieval technology, legal technology infrastructure, and computational law, as well as a review of some of the start-up incubation successes (Lex Machina, LawGives, Ravel Law, Judicata, etc.).
All in all, the workshop made two things abundantly clear for me: (1) legal computation has taken off and its horizons are boundless, and (2) San Diego in March is OK!
Designing a Law 2050 Law School Curriculum
One of the final assignment prompts for my Law 2050 class asked the students to write a memo to the Law School Curriculum Committee recommending “how to innovate the curriculum to respond to the ‘new normal’ in the legal industry and best position students to enter and succeed in legal practice over first 10 years of their careers.” I received 45 very thoughtful and comprehensive responses. Recall that Law 2050 could best be described as a boot camp on the “new normal,” exploring everything from outsourcing to legal tech to how to make a practice out of Google Glass, so these students were primed to go on the topic of what to include in the curriculum beyond a survey course like Law 2050. Here’s my synthesis of what they would like to tell the Curriculum Committee.
First, four proposed new course cluster themes dominated the student proposals, with well over 80 percent of the papers proposing courses in two or more of these clusters:
- Legal Process/Project/Program Management: Students want to know more about efficient management of legal processes (e.g., due diligence), discrete projects (e.g., drafting a contract), and broad programs (e.g., managing origination of hundreds of similar contracts). This theme also includes suggestions for courses on E-discovery and Legal Risk Management, which draw on routinized and efficient process techniques.
- Legal Technologies and Technologists: Michael Mills’ presentation of Neota Logic’s flowcharting technology platform was one of the smash hits of the class, and a good number of students presented law-tech and big data companies for their case studies, such as Lex Machina and Tymetrix. Students want to understand what these emerging technologies do, how they work, and even how to design them. This theme also includes suggestions for courses on Legal Software and Coding and Legal Computation and Analytics, as well as a number of suggestions that the law-tech theme be designed around some type of clinical delivery model.
- Legal Entrepreneurism and Startup: Although much of the discussion of the “new normal” dwells on Big Law, plenty of class time focused on innovative legal startups such as Ravel Law and Casetext, as well as on how legal innovations can better support other industry entrepreneurs and startups. This theme also included many suggestions for a clinical setting, such as teaming up with business incubators.
- Legal Business Management and Innovation: With all the emphasis on “more for less” and “disruption,” students expressed a strong demand for courses they described as Law Firm Management and Finance, the Future of Legal Practice, Alternative Legal Services Business Models, Solo and Small Firm Practice, and similar themes.
Beyond these four dominant themes, which I am happy to say are being integrated into the offerings at Vanderbilt, quite a number of other innovations popped out of the papers, including:
- As courses like the above are integrated into the curriculum, design a Legal Technology and Management Certificate
- Push some of the content of Law 2050 themes into the 1L year
- Offer a course focusing on nontraditional legal jobs, such as legal process management, legal risk management, and regulatory compliance systems
- Offer a course on Comparative Legal Services Regulation
- Offer a course on Legal Leadership
- Include regulatory compliance flowcharting exercises in more classes
- Integrate the law-tech issues into the Professional Responsibility course
- Develop a year-long speaker series picking up on many of the Law 2050 themes
Finally, many students included proposals which, while not fitting within the Law 2050 scope directly, are consistent with the theme, heard over and over again, that they need to hit the ground running (or at least walking a lot faster than my peers and I were when we graduated!). The dominant topics in this category were:
- Expand extern and clinic offerings, and even make taking one mandatory
- Require each student to take at least two “skills” designated courses
- Include courses and training on non-trial pre-trial skills, such as taking depositions, interviewing clients, communicating with courts and other counsel, reading records, etc.
- Offer a course on understanding how businesses operate, how they make the “legal buy” decision, and how they manage their legal operations
- Offer a class on “behavioral practice skills” such as case evaluation, legal communications, and risk assessment and communication to clients
- Offer more and broader transactional document drafting courses
- Offer a three-year JD/MBA
- Offer a course like Harvard’s Legal Problem Solving workshop
- Offer a more practice-oriented advanced Legal Writing course covering short answer memos, white papers, client letters, letters to opposing counsel, drafting interrogatories and document requests, etc.
Overall, I found this set of papers impressive in terms of the attention my students gave to the exercise and their creative, thoughtful suggestions. I was also gratified to think that my class sparked such a depth of interest in learning more about the topics fitting under the Law 2050 roof. With this kind of student effort and input coming in the first offering of the class, I’m looking forward to the Fall 2014 class even more.
Law 2050 Is Back – Starting with a huge round of thanks to my guest speakers
My one-month unannounced break from posts is over–Law 2050 is back! I would say the break was voluntary, but grading 61 1L Property exams, hosting six relatives over the holidays, and reading an enormous stack of papers from my 45 Law 2050 students kind of got in the way of blogging, with good reason.
Before I dig into my backlog of possibly interesting posts about the future of the law, the legal profession, and legal education, I want to thank all of the guest speakers who made the Law 2050 class a success. Based on the probing reviews my students compiled, you all truly had an impact and deserve recognition for being willing to share your time with the students to better prepare them for entering the profession during these transformational times. On behalf of them, and from my heart as well, THANK YOU! The honor roll follows in order of appearance:
Law firm managing partners discuss the state of the practice
- Ben Adams – Baker Donelson
- Richard Hays – Alston & Bird
- Stephen Mahon – Squire Sanders
Corporate in-house counsel discuss the drivers of change
- Reuben Buck – Cisco
- Jim Cuminale – Nielson
- Cheryl Mason – Hospital Corporation of America
Scenario Building Case Study: Climate Change
- Prof. David Hess – Vanderbilt Sociology Department
- Prof. Jonathan Gilligan – Vanderbilt Environmental Sciences Department
Legal Project and Process Management
- Larry Bridgesmith – ERM Legal Solutions
- Marc Jenkins – Cicayda
- Dan Willoughby – King & Spalding
Law firm associates discuss life in the modern law firm
- Ashley Bassel – Bass Berry
- Daniel Flournoy – Waller Lansden
- Sarah Laird – Bradley Arant
- Chris Lalonde – Nelson Mullins
Measuring Lawyer Performance
- Paul Lippe – Legal OnRamp
Alternatives to the Big Law model
- Walt Burton – Thompson Burton
- Eric Schultenover – Counsel on Call
Legal Technology Case Study
- Michael Mills – Neota Logic
Scenario Building Case Study: The Bioengineered Superhuman
- Prof. Michael Bess – Vanderbilt History Department
Implementing LEAN Law
- John Murdoch – Bradley Arant
- Prof. Nancy Lea Hyer – Vanderbilt’s Owen Graduate School of Management
Capstone Lecture: The Future of the Legal Industry
- Prof. Bill Henderson – Indiana University-Bloomington Law School
More posts to follow soon…
Learning from My Students in Law 2050
My Law 2050 class has moved into group presentations (format explained here), the first round being their assessments of new companies and business models emerging in the “new normal.” In two days of presentations, so far we’ve heard about a wide variety of fascinating developments: Axiom, QuisLex, Neota, MetricStream, Yusin & Irvine, Pangea, CEB, Clerky, Onit, MyCase, and Legal Outsourcing Partners. Also, one of my students, Christine Carletta, wrote an insightful description and assessment of Lex Machina as a post on the JETLaw blog for Vanderbilt’s Journal of Entertainment and Technology Law. I couldn’t be more pleased with how the students are engaging with their projects and the class in general!
What You Get When 45 Law Students Brainstorm About Legal Futures
Last week my Law 2050 class moved into a group project phase. I’ve divided the 45 students into six groups. Each group is exploring a pair of legal future topics grouped under two themes: (1) emerging legal technologies and practice models, and (2) future legal practice scenarios. The six paired topics are:
|
Group |
Tech/Industry Theme |
Practice Scenario Theme |
|
1 |
Outsourcing |
Environment and energy |
|
2 |
Legal process management |
Social and demographic |
|
3 |
Legal risk management |
Economic and financial |
|
4 |
Routinized and expert systems |
Health and medicine |
|
5 |
Legal prediction |
Data and privacy |
|
6 |
New legal markets | Other technologies |
Each group member prepared a proposed set of specific research projects fitting the group’s topics, and last week they pitched them to their groups. Each group selected 3-4 projects for each topic. They are exploring the viability of their tech/practice model selections and of their practice development selections. Later in the semester the groups will present their findings to the class as a whole.
Last week, the groups selected their final set of research projects and gave a quick summary to the class. I was quite impressed with the breadth and depth of their selections:
Future Practice Development Topics: synthetic organs, bitcoins, robotic surgery, student loan debt relief, Cloud computing, Google glass, 3-D printing, Dodd-Frank aftermath, crowdfunding, sea level rise, cybersecurity standards, carbon sequestration, space law & asteroid mining, virtual real estate, ocean-based power sources, biometric identification, water rights issues, genetically pre-fabricated children, natural disaster law, AI decision making, majority-minority America, same sex marriage, LGBTQIA rights, mass human migration, the sharing economy.
Legal Tech and Practice Models: QuisLex, Yuson & Irvine, LPO security breach issues, rebundling of LPO functions, My Case, Onit, Clerky, Axiom, Lex Machina, Casetext, Clearspire, Lawyer Up, Jury Verdict Analyzer, Kiiac, Neota Logic, healthcare compliance software.
I’m looking forward to what they have to say about each of these!
Law’s “New Normal” as Seen Through the Eyes of Law Students
As I mentioned in my last post, my Law 2050 class recently featured two panels of speakers, one consisting of large law firm managing partners and the other of large corporation in-house counsel. I identified four major themes that struck me as dominating the discussions: (1) the improving profile of “Medium Law,” (2) the impacts of volatile lateral partner movement, (3) the in-house counsel’s quest for value, and (4) law firm financial structure as an obstacle to innovation.
I had my students–there are 45 enrolled in the class–prepare “reaction papers” for the combined panels, in which they were free to comment on what they heard however they wished. I had held off on my post until they handed in the papers so as not to influence their reactions. Remarkably, however, the four themes I discussed in my post were recurrent themes in the student papers. But there were others that dominated their discussions and which revealed something about how law students are approaching the so-called “new normal.”
- The students were struck by the different emphasis the two panels placed on quality versus efficiency in the “value” calculus. While both panels placed importance on both value components, the students perceived that the managing partners emphasized selling quality while the in-house counsel emphasized buying efficiency. The in-house counsel were fairly blunt in this respect, which made a deep impression on the students.
- The in-house counsel panel discussed the “disaggregation” theme extensively, with one panelist describing how legal matters are unbundled and farmed out to a variety of service providers. As this counsel put it, “I hire everything from $30 an hour lawyers to $1500 an hour lawyers–I find the right rate for the right service.” Although this struck the students as a sound business model, they were also struck by how much workload that places on the in-house counsel to herd all the cats. It’s like trying to be your own general contractor when building your new home. The students thus saw the potential value in Legal Project Management service providers, several of which will be appearing on panels later in the semester.
- Indeed, many of the students asked why law firms can’t essentially reinvent themselves to house all of the unbundled services under one roof and charge out each of the various services at competitive market rates. Good question! Indeed, next week we will be hearing from some firms that have taken some steps in that direction.
- Probably the most introspective and personal theme that ran through the papers had to do with training–as in how will they receive it. Let’s face it, the old model, for all its flaws now under the microscope, was a wonderful training ground for young lawyers. They got to see all the bricks in the litigation or transaction wall as it was constructed, and could observe high quality legal work all around them. My students expressed concern that they will not have that same opportunity as legal services are unbundled and farmed out to multiple providers and as their value comes under close scrutiny by clients and their own firms. Remarkably, many said they’d gladly take reduced salaries over their first few years at a firm if that meant they’d receive formalized and extensive training as the quid pro quo.
- Finally, many of the students questioned the continuing viability of US legal practice restrictions. They wondered whether large US firms can compete with the more financially liberated UK firms in the global market, and whether state licensing restrictions really have a rational basis for practice fields that are national in scope. Although the panelists opined that change on this front would be very slow to come, the vibe from the students was that it can’t come fast enough for them.
I have to say that I was quite impressed by how deeply and insightfully my students thought about these issues. Of course, their main concern is about getting employment after law school, which many of the 3Ls have already secured, but my sense is that after hearing from our two panels they have a better handle on what employment in the legal industry will be like in this era of transformation.
Insights on the “New Normal” from Law Firm Managing Partners and Corporate Counsel
Last week in my Law 2050 class we held two panels of speakers–a panel of three BigLaw managing partners on Monday (Ben Adams of Baker Donalson, Richard Hayes of Alston Bird, and Steve Mahon of Squire Sanders) followed by a panel of three in-house counsel of large corporations (Reuben Buck of Cisco, Jim Cuminale of Nielsen, and Cheryl Mason of Hospital Corp. of America). First, my enthusiastic thanks to our panelists, who provided a lively, engaging, deep, and quite candid forum for the students.
Indeed, the speakers covered so much ground I could not possibly cover it all in one or even several posts. So what rose to the top in my assessment? Four things:
- The Rise of MediumLaw. Both sets of speakers suggested that medium-sized firms (MediumLaw) are increasingly a source of competition for BigLaw and of legal services to large corporations, confirming Richard Susskind’s prediction that, while MediumLaw firms will face pressures to consolidate, they now have “an unprecedented opportunity to be recognized as credible alternatives” to BigLaw. One reason is the basic “world is flat” effect, making it easy to access legal talent everywhere. As for legal talent, all the speakers recognized that MediumLaw is brimming with top legal talent. The there is the lower fee structure a client is likely to enjoy by hiring a regional MediumLaw to handle a matter in the region. While all the corporate counsel confirmed that “bet the company” litigation or massive, complex transactional work is likely to go to BigLaw because of its repository of experience on such matters and ability to scale up to a matter of any size, there was no question that they considered MediumLaw a substantial and growing source of their legal service needs.
- The Corrosive Effect of Lateral Partner Movement: Both sets of speakers emphasized the importance, now more than ever, of establishing strong relationships between firm and client. The corporate counsel stressed the need for firms to “know my business,” and the managing partners pointed to many new kinds of practices they are taking to get there. And both panels identified the acceleration of lateral partner movement as one of the chief obstacles. Indeed, when asked what keeps them up at night, the managing partners concurred that the fallout from actual and potential partner exits is a constant source of stress (though I imagine each of the firms represented has done its share of lateral partner hiring).
- Value: The corporate counsel kept coming back to their primary concern in selecting outside counsel—value, value, value. What wasn’t as clear is how clients evaluate it and how firms are rethinking how they deliver it. For example, Cisco is well-known for using fixed fees arrangements for much of its work, but one of the corporate counsel suggested that fixed fee is not necessarily the silver bullet. If the fixed fee is simply a number that aggregates the expected revenue from an hourly billing method, how is that delivering better value? My strong sense from this representative group was that while firms and clients are willing to experiment with ways to wean off of the billable hour, there is no consensus yet on what alternative fee model will consistently deliver better value over time.
- Law Firm Financial Structure as an Obstacle to Innovation: A strong theme the managing partners panel returned to several times was how the nature of partnerships as financial entities constrains innovation. Firms manage tax consequences by flushing out profits and limiting retained earnings, which puts a disincentive on investing in R&D and makes experimenting in costly new business models or products quite risky. To be sure, the managing partners described some innovative practices–for example, one firm maintains a “venture fund” in the form of an allotment of “billable” hours groups of attorneys can apply for to free them up for practice development projects, with the firm standing behind accounting for the hours as counting every bit as much as hours actually billed to clients. As the partner from that firm explained it, that kind of practice development project is highly valuable to the firm, but not to individual lawyers if they don’t get credit for it, so they won’t do it with this kind of incentive. Yet the appetite for that kind of innovation necessarily is limited by the partnership financial profile as well, not just by the billable hour itself.
This is just a taste of the range and depth of topics our panels covered. Again, I can’t thank them enough. as for my students, I know from the “buzz” that the panels made a tremendous impression on them. They handed in their reaction papers yesterday, so I will soon learn just what that impression was!
Law 2050 (the Class) has Launched!
I am pleased to report that my Law 2050 class here at Vanderbilt Law School is now up and running. Our first two sessions last week consisted of a broad overview of the class and a brief history of the modern American law firm. The class has 45 very bright and enthusiastic students enrolled, and based on their personal statements they are keenly aware that it is to their advantage to learn more about today’s dynamic legal industry environment. Today and Tuesday we will hear from panels of managing partners and in-house counsel on their perspectives and practices. For those interested in the scope of the class, I have set out the syllabus after the jump.
Law 2050 