Disrupting the legal education marketplace

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Are you old enough to remember when the only way you could send a letter or a package to someone in another city was through the Post Office? Do you remember what it was like to deal with the employees and policies of a company that had a complete monopoly on a vital service? Remember how much you enjoyed that?

Are you also old enough to remember when the only way you could phone someone in another area code was through long-distance services provided by your local telephone monopoly or duopoly? And how you had to wait and call after 6 pm to get a discounted rate, or after midnight for an even steeper discount? How did that work for you?

It’s easy to forget how much technology and globalization have changed and improved our everyday experiences in the last few decades. Today, we take companies like Fedex and Skype for granted. We have trouble picturing a world — a very recent world — in which there was no Ikea, no Amazon, no Samsung, no Starbucks, no SouthWest. You don’t have to use these companies or like their products to recognize that their arrivals changed the markets they entered, created more choice, forced the incumbents to lower their prices or raise their games or change their offerings or all three. And I can presume that you wouldn’t go back to those old, narrow, barren markets unless forced at gunpoint.

Now, take that frustrating, constraining, 1970s-malaise feeling you recall from the old days, and apply it to legal services. Because that’s the way many people and businesses still experience the legal market: one type of provider, one set of rules and procedures, one definition of adequate service. But that’s all about to change:  our cozy little market is opening up, and new players are entering.

These new players, like the Ikeas and Southwests that entered other markets before them, will undermine clients’ existing assumptions about how legal products and services should be created, priced and delivered, and they will find many willing customers desperate for a breath of fresh air. This isn’t really negotiable or reversible. All that’s left for us to decide, as lawyers, is whether we want to wind up as the future equivalent of the Post Office in a FedEx world.

Now, here’s the better news for lawyers: there’s a growing chance that we could experience the same kinds of consumer benefits arising from the opening and expansion of another dusty, moribund market: legal education.

As you know, for all practical purposes, there is one and only one route into the legal profession: a law school degree and a Bar-administered admission process. The degree goes by different names (e.g., Bachelor of Laws, Juris Doctor) and so does the admission process (e.g., articling, Bar exam, solicitor training, Bar admission course). But the basic structure is universal and hasn’t changed for decades: three years of law school followed by a competence assessment that, in most (but not all) cases, is not especially difficult to pass.

The practicing Bar’s unhappiness with the legal education system has been thoroughly documented. But the Bar also has no one to blame but itself. By allowing a law degree to stand as the exclusive means of legal education credentialing, the legal profession has also created a monopoly that works against its own interests. If you want to become a lawyer, you must first go to law school. Legal educators, gifted with sole possession of an extremely lucrative and perennially increasing market, have responded exactly as you would expect any monopolist to respond: jacking up prices, fending off change, and ensuring their own nests are comfortably lined. (Before you start feeling too resentful about that, go back and read the fourth paragraph again.)

Law schools, of course, are currently in the process of watching their pleasure domes start to crack and crumble. Thanks in large part to recessionary forces and changes to the way law firms hire and use associates, US lawyer employment has imploded, and law schools are paying the price. You could argue — I won’t, at least not strenuously — that this is unfair to the schools: they didn’t cause the changes to the market, and if anything, they’re doing a slightly better job preparing students for practice today than they did 10 and 20 years ago. Not that that will help them now — there’s an old saying that when you sow the wind, you reap the tornado.

Anyway, the most recent US law school data is remarkably grim: as you’ve probably read, applications to ABA-accredited law schools are down 20% from 2012 and are on track to nosedive 38% since 2010. If you go back to 2004, the drop is an astonishing 50%. This has hit the legal academy like a hand grenade tossed through a window: Paul Campos has been tracking the resulting panic and shrapnel for several months now.

The problem has become large and serious enough to have caught the attention of the mainstream press: The New York Times, The Atlantic, Forbes and The Daily Beast have all picked up the story, coverage that is just going to accelerate the race away from law school enrolment. I issued a “sell” advisory on law schools 20 months ago, and nothing that’s happened since has changed my mind. (Smart schools still interested in saving themselves should read Bill Henderson’s Blueprint, today.)

That, obviously, is the bad news. The good news is that this market disruption, like every other, can create opportunities for new players and new models. Here are a couple that you should note and encourage.

In England & Wales, now widely recognized as the world’s legal laboratory, apprenticeship is poised to make a comeback in the professions. “At the moment, to become qualified as a solicitor, accountant or in insurance, the typical route involves three years at university, then on-the-job training and professional qualifications,” wrote Skills Minister Matthew Hancock in the Telegraph. “But university is not for everyone. There is no reason why you can’t attain the same qualifications, without the degree, starting on-the-job training in an apprenticeship from day one. So I want apprenticeships spanning craft, technical and professional jobs that open up work-based routes to the top.” The minister cited approvingly an apprenticeship program under development at BPP Law School, which has close ties to the profession.

Now, if you’ve been reading my work for a while, you’ll know that I think highly of apprenticeship, and that I wrote a few years ago about some promising apprenticeship programs at a handful of US law firms. (Here’s the paper I submitted to a Georgetown Law symposium on the subject.)  I imagined and hoped that this was a trend that would take off in a recessionary climate; it did not. But that was apprenticeship as a training method for new lawyers; we’re now talking about apprenticeship as a non-school route into the profession.

Hardly anyone takes that path anymore; but if it could be revived, ideally complemented with a mini-degree that provided grounding in the essentials of jurisprudence and legal theory, then law schools would have more on their hands than just a PR nightmare and a shrinking inventory: they would have competition. And unlike those first two factors, which will spawn only destructive outcomes, competition can and should be constructive for schools. Competing models that threaten to siphon off the best applicants would spur schools to make real changes in their approach to the market — it would give them a target to focus on and a framework within which to reconfigure and rebuild.

Nobody wants law schools to disappear; we want law schools to thrive — but on their merits. Putting a viable alternative up against law schools would motivate them to reconsider their own models, defend their own visions of lawyer preparation, or adapt their approaches to more closely resemble what the successful options offer. Complaining about law schools didn’t work; trying to regulate them won’t work; and putting them out of business is pointless. So give them competition: unleash alternatives that can give them a run for their money, and let them fight their way out of this mess.

A similar sort of innovation may be unfolding here in Canada, which it seems fair to say is not widely recognized as the world’s legal laboratory. But the Law Society of Upper Canada in Ontario has recently done something which could be just as bold, in its own way, as the UK’s move towards apprenticeship.

Law graduates cannot be admitted to the Bar in Canada until they’ve completed a year of articling — itself a form of apprenticeship with a practicing lawyer or law firm. More than a few US commentators have envied this approach and suggested its adoption in the US (or the British solicitor trainee program or German Referendarzeit). But articling in Canada is itself the subject of ongoing controversy, and in Ontario, articling placement — which used to be all but automatic — is now down to about 85%. That’s a problem that the US bar, facing a 55% new-lawyer law-related employment rate, would love to have.

In Ontario, however, concern about the articling crisis led to heated debates and finally, late last year, to the approval of a pilot-project Law Practice Program that would run parallel to articling and provide an avenue to those who cannot land articling positions. The program is not, shall we say, universally popular, and at this extremely early stage, it’s almost entirely speculative anyway. But I think it’s tremendously important nonetheless, for much the same reason as I think the possibility of apprenticeship is important: it creates competition for new lawyer training.

Up until now, articling in Canada has, in a sense, enjoyed a monopoly, in much the same way that law schools and lawyers have. There is only one “apprenticeship” method, one training route, for Canadian bar admission, and that’s the articling process. Knowing this, many Canadian law firms have felt free to offer articling positions without having to worry very much, if at all, about the quality of those positions. All they really had to concern themselves with was the provision of a competitive salary; it was accepted wisdom among lawyers and law graduates alike that the articling experience itself would always be uneven, and that whether you really learned much about being a lawyer would be partly a matter of your own efforts and partly the luck of the draw.

Now, introduce the Law Practice Program into this mix. Suddenly, articling programs can’t afford to be complacent, because now there’s another training option. Providers of the Law Practice Program (it’s envisioned that there would be several) can pitch themselves to the law student market thus: “Law firms won’t really train you to be lawyers, you know. They’ll have you photocopying and doing grunt work and picking up drycleaning. But we will train you, through competitive work placements and practical role-play sessions and other cutting-edge methods for inculcating business skills. We will give you the tools to be employable upon graduation.”

These providers will have to offer and deliver these kinds of benefits, because that’s the only way they’ll be able to make money. In order to attract candidates — and, much more importantly, to produce graduates attractive to employers — they will need to build a training program superior to articling (and based on some reported articling experiences, that might not be terribly difficult). They will have to do more than just be a consolation pathway for students who couldn’t find articles — they’ll have to persuade law graduates of all stripes that their programs are as good as or better than articling and are worth the investment.

And if they succeed — well, then suddenly, we have a race. New lawyer training stops revolving around the tired old question of “Whose responsibility is it?” that we’ve been grappling with for ages. It becomes a question of “Who wants the opportunity?” Which training option is better for new law grads? Which can deliver the best results? Which can draw the best students into their programs and produce the best subsequent employment rates? A market filled with new lawyer training options, competing with each other to attract law graduates into their program, would have many ramifications — the likely end of standard paid training for new lawyers almost certainly among them — but the overall impact on the profession would be highly positive.

That’s why I think the Law Practice Program for the Ontario legal profession has the potential to be a game-changer, and why the suggestion of an apprenticeship route into the British profession is equally significant. Our legal education and admission methods have grown stagnant because they are monopolies, no different from the post office or phone companies of the past. Break up those monopolies — open up these markets and let in some sunshine and fresh air — and you’ll have the first real opportunity for serious reform and improvement in the new lawyer development process.

And if it all breaks right, then just like with mail and long-distance calls, no one will want to go back to the old days again.

Jordan Furlong delivers dynamic and thought-provoking presentations to law firms and legal organizations throughout North America on how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International and a senior consultant with Stem Legal Web Enterprises. 
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9 Responses to “Disrupting the legal education marketplace”

  1. Jon Busby

    Excellent post Jordan.

    Legal education is just another ‘command and control from the centre’ provider that has developed and existed unchallenged. Along with large content and forms providers i think they have the potential t be the legal sector HMV or Borders. It suffers the three embedded incumbents fails; fear, ignorance and arrogance.

    To pick up on your phone Skype etc analogy. What has changed things so much recently in all industries is not just the vehicle (Skype, Amazon, Spotify) but the execution. These things happened because users, consumers, aka you and me, validated them. We use them because they deliver that innate human need; better.

    Innovators and entrepreneurs built (and continue to build and refine) options and alternatives. Some fail and some succeed. But what decided failure or success was and continues to be validation by the user.

    When we find better, when it is accessible, when it is open, when it is affordable, when it is relevant then we validate it simply by choosing to use it. And in an increasingly connected world that validation can move very very fast.

    Jon

  2. Spataro

    In Italy there are the same problems, and many more.

    To access to justice there are increasing heavy taxes.

    To teach to lawyers is easy, but if you don’t have “credits” from bars the studies aren’t recognized, and lawyers dont’t like to study. Practicioners need to study, but work isn’t paid.

    Marketing is now allowed but with conditions and too open criterias, so bar can stop easy everyone using even facebook for their job, if they would.

    Finally it’s easy to find lawyers without skype, even if everyone knows it.

    Is it education sufficient to change the offer of legal services ? No but can solve the issues of each lawyer that want do the difference. The problem is: the collegues. They won’t support you or they’ll put obstacles on your path.

    Is there more freedom or supportfrom collegues in Canada or Uk ?

  3. Craig Burley

    “Do you remember what it was like to deal with the employees and policies of a company that had a complete monopoly on a vital service? Remember how much you enjoyed that?”

    I did. It was wonderful. The service was excellent. They knew exactly what they were doing.

    I miss the pre-privatization post offices.

    But as for LPP, I am very excited about its potential. It will indeed only be as good as the people who involve themselves in it but I get the strong feeling that there is a need for the service. Unfortunately I worry that it will be done on the backs of the students, who already overpay for three years of mostly indifferent law school education. But there are opportunities to make it work.

  4. Richard

    There is another way to offer legal services, one that is surging in Ontario: licensed paralegals.

  5. Anne

    Jordan, if you look at the history of legal education in Ontario, law schools were the bright and brand new anti-monopolistic lawyer education that broke the old apprenticeship system. Back before the 1950’s students had to work for three years, with low or no pay, essentially doing the grunt work currently done by law-clerks or legal assistants. Law firms hated the idea of moving away from apprenticeships — they didn’t want to have to hire clerks. It was students, who realized they weren’t learning much of anything as apprentices, that pushed for change.

    I don’t see law students pushing for the LPP, if nothing else they likely recognize that “separate but equal” is rarely really perceived as equal. Sure, it’s nice to think that in some utopian future the LPP experience will be seen as so wonderful that law students will be competing to do unpaid internships or placements rather than accepting $50 or $60,000, plus payment of their Bar Exam fees, and guaranteed hire back. But given the problem LPPs are supposed to solve, that seems unlikely. The problem isn’t that mainstream students with excellent grades are not getting articles. The problem is that students from minority groups, and students with lousy grades are not getting articles. That’s the stigma that will be attaching to the LPP system … turning that around will be close to impossible.

    If the Law Society or the profession are at all serious about making change, they blew their chance when they voted down the proposal in the Minority Report of the Articling Task Force. Anyone who looks at the reality of how initiatives to create “separate but equal” programs for excluded minorities have worked in the past, would agree with the Minority Report’s proposals. The mess that is legal education and entry into the profession can be fixed. To fix it, however, will require full commitment. Or, to paraphrase an ancient legal scholar, in the area of articling there is do, or do not … there is (successfully) no try.

  6. Jordan Furlong

    Anne, thanks for your thoughtful comment! Here are a few brief thoughts in response:

    – I agree entirely that law school was an incredibly important advance, and not just here in Canada: formal legal education filled in numerous important gaps in many jurisdictions (most notably, in jurisprudence and the rule of law) that apprenticeship was failing to provide. Unfortunately, the pendulum continued swinging the other way, until now, instead of new lawyers getting all training and no education, we have the opposite problem. The only effective way to prepare new lawyers is an integration of both approaches, education and training — but both need to be drawn up and administered much more rigorously than they are today. Law school applies archaic, self-serving methods to educate students, while articling is conducted in a slipshod manner shot through with inconsistency. We need to do better on both counts.

    – I also agree that discrimination against visible minorities or others who don’t fit the “profile” of the average law firm is a pernicious practice masquerading under the banner of merit. However, I feel compelled to note that not every candidate (regardless of background) who is rejected on “merit” fits this bill. In many cases, when candidates with poor law school performances can’t find articling positions or legal employment, it’s because the system is working exactly as it should. Some people with law degrees would be terrible lawyers. I hate to say that so bluntly, and I know it’s hardly going to make me popular, but it’s also true. Articling is a barrier to Bar admission that exists at least partly in order to reduce the likelihood of having licensed lawyers who fall below the threshold level of competence. There are both legitimate and illegitimate reasons why someone can’t get an articling job; I’m not saying it’s easy to distinguish the two, but I am saying we need to make the distinction.

    – Your argument that an unpaid LPP internship, no matter how good, will hardly ever be able to compete with a paid articling position, no matter how mediocre, is certainly true. We don’t know yet, however, that LPP work placements will be unpaid — and I can’t see any way that the program could succeed if they were. If the providers hope to attract anyone to their programs (and if the law society hopes to make this a remotely viable option in future), at least some revenue is going to have to come from somewhere. This leads me to a couple of predictions about how things will shake out here:

    (a) In the short-term, LPP participants will require some kind of revenue stream, supplied either by the sources of work placement or, perhaps more likely, by the law society itself. This kind of program, if it intends to be anything more than a short-term band-aid response to the “articling crisis” (and I recognize the possibility that that’s all the law society has in mind, which would be incredibly unfortunate), will need to be subsidized in its first few years. The revenue doesn’t need to be “competitive” with articling salaries per se — competitive salaries don’t apply when there’s no competition for the workers in question — but it does need to be respectable enough that the student can keep body and soul together and the law society can’t be rightfully accused of exploiting graduates. The LPP has to be thought of as a “startup,” with all the care and feeding that a new enterprise requires.

    (b) In the longer term, I anticipate a much more fundamental shift: the end of paid apprenticeships in law. It’s going to occur to more legal employers that they are providing real value to their apprentices — training, experience, CLEs, networking opportunities, and the satisfaction of a professional admission qualification, to name the most obvious benefits — and they’re going to start wondering why students should be paid for this privilege. It’s a truism that your average articling student is in no position to provide real value to the firm or its clients — that’s why they’re articling, to gain enough experience to be valuable. Firms rarely turned a profit on their articling students, but to the extent they could derive some revenue from their efforts, it was in a system where clients paid for low-value work disguised as “training.” That system has passed: law firms can henceforth expect to foot the bill for the entirety of new lawyer training themselves. So, one of two things will happen. Either firms will recognize the value of a long-term investment in training their future lawyers and will reduce partner profits in order to finance that investment; or they’ll recognize a glut in the market of new lawyers and that articling provides real non-monetary benefits to students, and they’ll start reducing the amounts they offer for apprenticeship opportunities, in many cases eventually down to zero. I’m pretty sure I know which direction most firms will want to go.

    We can argue over whether this would be a good or a bad development, but I’m pretty sure it’s going to be a development nonetheless. Fundamentally, I think what will be required of us is a recalibration of the traditional framework of initial lawyer development. We’re used to thinking of law school as three years of “education you pay for,” and articling as the start of 30 years of “work you get paid for.” We’re going to see the articling year (and perhaps, eventually, the first 2-3 years of practice) shifting from the “work” side of the spectrum to the “education” side of the spectrum, with a consequent switch in the direction in which money flows. It’s not an unreasonable development, and it’s not out of the question that someday, legal employers may start charging students for apprenticeship opportunities, just like law schools charge students for education opportunities. These might seem like perverse results, and maybe they are and maybe they’re not. But it’s the direction in which we’re headed, and quickly at that.

    What we need now is to start having principled conversations about the nature and purpose of initial lawyer development, before this all happens. We need less talk about the “articling crisis” and more effort towards redefining how and why we are training new lawyers.

  7. BCReed

    Something that has not been spoken about nor considered is if legal education is actually suffering from disruption. Much of higher education is being disrupted by online programs, such as the University of Phoenix and Kaplan University. Disruption usually creates a new market entering in at non-consumption.

    The online universities offer paralegal programs and community colleges offer paralegal programs that are orders of magnitude cheaper than law school. Further most solo and small firms will higher a paralegal over a lawyer, especially if they use flat fees. The paralegals can be paid much less and are likely more technologically savvy than law grads.

    If the law schools are being disrupted any cost cutting measure they take might have short term gains but won’t lead to sustained growth. To have sustained growth into the future they will have to disrupt the disruptors through such programs as MOOC. The effort needs to be sufficiently independent from the traditional model that it does not get starved of funding.

    Law School Deans and Regulators need to read the book “The Innovators Dilemma” by Harvard Professor Clayton Christensen. It offers a comprehensive description of disruptive innovation and how incumbent organization can combat it.

    Just so you can get a an idea of what I am saying. BLS predicts a growth rate of lawyers over the next 6 years to be 10%, which is average. For paralegals they predict it to be 28%. The fastest growth rate of any industry.

  8. BCReed

    Correction: Just so you can get a an idea of what I am saying. BLS predicts a growth rate of lawyers from 2010-2020 to be 10%, which is average. For paralegals over that same period they predict it to be 18%, nearly double. It is 4% greater than the average growth of all occupation.

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