The AMA and med schools have had this figured out for a good century–they sharply limit the numbers of graduating MDs by a number of means. Consequently, there is a manageable shortage of doctors, ample opportunities for nursing and other para-medical careers and their economic clout is massive and undiluted.

Meanwhile, law schools are churning out more alleged lawyers every year than the market can absorb. Many go on to other careers or become “bottom feeders.” Some of the latter get very lucky and very rich–at grave cost to the profession. But the broader result is that the economic clout of the legal profession is horribly diluted. There are many many JDs doing paralegal work and less. The market for clerks and paralegals is not at all what it should be.

It is up to the ABA and law schools to tighten standards, recognize that progress doesn’t mean just growing numbers generally or in any particular demographic. Progress lies in improving the quality of the profession year by year, while ensuring that those who go to and finish law school have the skills and the opportunities actually to be responsible lawyers–not just parasites or piranhas. Law schools must tighten their admissions and stop flooding the market with under-qualified, alleged JDs.

I’m pretty sure that all of the financial firms, mortgage brokers and insurance companies that have come to ruin recently had lawyers who helped them assess the legal risks involved in leveraging and sub-prime mortgages. What good did that do?

The problem in our society is a general lack of moral and ethical integrity, not a lack of legal services. We need lawyers who will advise clients on the right and ethical course of action, not just help them devise ways of doing business that, while not technically ** illegal **, could prove ruinous to them and to society at large.

Wow! How will they ever sell that concept to the public?

I think that lawyers are seen primarily as fixers of problems after the fact. They are also co-dependents and beneficiaries of the bureaucratic methods devised by legislators to mitigate social and economic risk through laws, procedure, regulation, permits and official filings of all kinds.

Things happen in one’s life. If I get arrested and charged, I will hire a lawyer to work to get me freed. If someone sues me, or owes me money, I will hire a lawyer to defend my wealth. If I want to write a will or purchase a house, I will hire a lawyer to save time and to reduce my risk of missing a form or filling one out incorrectly. I could, theoretically, do virtually all of these tasks myself, but instead I hire a lawyer, trusting that they know how to do it right. I am buying the knowledge and skill required to pilot and defend my interests through the legal system.

That’s why a lot of people are down on the legal profession: the environment in which lawyers operate to mitigate risk on behalf of clients can seem rather artificial, bureaucratic and obstructive. Particularly in the case of wills and basic property law, lawyers are paid to construct instruments of risk management that should be standard and freely available (thus the success of published kits for wills and divorce). I still wonder why I had to sign about 84 separate documents to buy my house. Could there not be a standard, all-inclusive form requiring no more than the details specific to the transaction plus one sample of each signature? But I digress…

The more practical questions are these:

How will the legal profession sell the idea of additional “preventive” services when many of the existing “reactive” services deliver questionable value for money?

How will they convince people to pay for an extension of services whose cost/benefit equation will be predicated on the construction of a hypothetical risk (you might get sued, arrested or swindled) instead of dealing with an imminent risk (being sued, on trial, or out money already)?

How will the legal profession estimate hypothetical future risk? Insurance companies hire actuaries, who use hard stats to estimate how many houses will burn down, how many car accidents there will be, and how many people will die or get a terminal illness in a given year. They price accordingly and people generally accept that the risks covered are real. How would lawyers put a price on a future legal risk? How will the value of these services rendered be measured by the client? How can you know the value of a risk that has been prevented?

And isn’t the field of risk management already dominated by other powerful professions, such as banks, insurance companies and accountants? Granted, considering what’s happened to the economy, they don’t seem to have done a very good job. Is bringing in lawyers to innoculate clients against risk a better solution than insisting that bankers, insurance companies and accountants operate ethically and competently?

Overall, I think that the money and trust invested in a lawyer during a crisis will seem to most people to present better value than hiring one to keep you out of potential trouble.

A sobering assessment. My experience of in house in the UK (as a transactional lawyer I am one of their suppliers) is that where they can, they are moving away from the billable hour. This will take time, and there are always going to be jobs where hourly billing will be the basis of charge ~ but there has been a very noticeable shift.

Over here we were already facing the perfect storm: a legal services marketplace about to be opened up to non-traditional providers, a demographic where the profession has doubled in size (in private practice) in a generation, increasingly sophisticated clients (particularly at the top end) and now recession. Wow!

I don’t have a dog in the hunt relative to GC’s, but I have a number of friends who are, and many of them realized even before the downturn that there were numerous tasks (e.g., employment issues) they could handle in-house for a better ROI than farming out. I don’t hear this talked about much, and honestly I expect that in this market, those folks will be looking at the possibility of expanding internally (again, strangely reminiscent of the 90s). Perhaps we’re headed for another cycle of larger in-house legal departments?

I don’t know if there will be a seismic change. Since my switch from law firm to in-house, my flows of information have decreased. But I do not hear many stories of GCs asking for things to be done differently.

I hear lots of stories of GCs asking for bigger discounts on hourly billing. This seems ineffective to me. You have fewer associates around to do the work and you have partners hoarding work. So the GCs may be getting the percentage discount, but it is a discount from a higher effective billing rate. In the end the GC cans say they got the discount, but they still end up with higher total bills.

Until hourly billing becomes the alternative billing arrangement I don’t expect any changes in the way law firms operate.