Pro bono without borders

A press release came my way today from McCarthy Tétrault, announcing that the firm is the first Canadian “Partner Without Borders” of the Quebec division of Avocats Sans Frontieres. [Edit] ASF is an international NGO devoted to providing legal assistance and representation to vulnerable individuals and groups in developing countries or those in crisis. The organization is active in 30 countries, working with local groups on a completely pro bono basis. ASF Quebec has a number of law firm sponsors already, but McCarthys is the first to become un partenaire. Good for them.

Any law firm worth its charter has always been active in its community, of course, but in this age of megafirms with global reach, we’re starting to see super-national firms display a truly remarkable degree of involvement in issues and organizations that transcend the usual local undertakings. Check out DLA Piper, whose New Perimeter project is an incredible piece of work: a worldwide pro bono initiative that has seen 13,000 lawyer hours contributed to, inter alia, drafting new judicial laws in Kosovo, restructuring a micro-lending project, developing a worldwide food bank system and creating a human rights center in southern Africa. This is work on the scale of the CBA’s sterling International Development Committee, but supported by a for-profit firm rather than a non-profit association.

It would be naive to overlook the obvious marketing and recruitment benefits of McCarthy’s move here: the press release highlights the firm’s other pro bono efforts, including its support of Pro Bono Students Canada. This obviously invests the firm with some cachet among law students and new lawyers, many of whom take overseas development work very seriously. McCarthys, of course, will have to back up this commitment with active participation in Avocats Sans Frontieres (and now I have Peter Gabriel’s Games Without Frontiers stuck in my head), because students can also tell real commitments from mere gestures. But I prefer to think McCarthys means what it says here about its pro bono commitment, and that what we’re seeing really is the white-hot trend of globalization applied to the age-old tradition of lawyers’ community service.

Eyes wide open

Over at the Wall Street Journal‘s Law Blog, they’ve published a Q-and-A with a young New York law grad named Kirsten Wolf. She graduated from Boston University Law School in 2002 right into the dot-com collapse and couldn’t find work, even though she was a B+ student. She has the courage and grace to admit that she went into law school not really knowing what else to do, and that when it became clear halfway through her degree that there wouldn’t be a job for her, she found she didn’t really have a passion for the law after all. Today, she works at a job she loves for a New York publishing company, but she has $87,000 in debt, which will take her about 30 years to repay.

This is what Ms. Wolf is currently up to:

I’m on a one-woman mission to talk people out of law school. Lots of people go to law school as a default. They don’t know what else to do, like I did. It seems like a good idea. People say a law degree will always be worth something even if you don’t practice. But they don’t consider what that debt is going to look like after law school. It affects my life in every way. And the jobs that you think are going to be there won’t necessarily be there at all. Most people I know that are practicing attorneys don’t make the kind of money they think lawyers make. They’re making $40,000 a year, not $160,000. Plus, you’re going to be struggling to do something you might not even enjoy. A few people have a calling to be a lawyer, but most don’t.

I think she’s exactly right. Continue Reading

The value proposition for associates

From the Recorder comes news of a 220-lawyer firm in San Diego that has decided to abandon lockstep, year-of-call-based compensation for its associates.  Luce, Forward, Hamilton & Scripps has created no fewer than 14 different levels of associate compensation, based on what type of law the associate practises and how good she is at it. Not exactly a mind-blowing approach to remunerating your employees, except in the law, where it’s still pretty radical. Luce Foward’s move follows a similar, much-discussed program at 630-lawyer Howrey LLP, which applies subjective evaluations of performance and experience to determine associate salaries. Bruce MacEwen has written about this at Adam Smith Esq. and in a recent article for National.

One line in the  Recorder article jumped out at me, a criticism of the move by a legal recruiter: “I don’t know if that will sit well in terms of creating a collegial environment…. It’s saying your practice area is worth less than, say, an IP litigator.” Well, that’s kind of the point, isn’t it? Some practice areas do generate more revenue than others, and some lawyers are better at what they do than others, so adjusting your compensation system to reflect that is simply an acceptance of market and human realities. Law firms’ traditional approach to associate compensation assumes that all associates are equally valuable, which, if you stop and think about it for a moment, really is absurd.

I think what we’re seeing here is another indication that lawyers are finally making a serious effort to extract and identify the economic value of their work. Most lawyers know, deep down, that the billable hour is a contrivance designed to make billing and remuneration simple and unconfrontational. I suspect that generally, the larger the firm (and the farther the lawyer is removed from the nuts and bolts of the business), the less the lawyer is acquainted with how much his practice costs, how much his performance and experience are actually worth, and what kind of fee structure should be built around those two points. Solos don’t have the luxury of simply slapping a rate on their invoices — they need to really understand the profitability of their practices, or they’ll go out of business. It looks like that day is arriving for lawyers in larger firms too.

Law firm size: past, present and future

After making an offhand comment in a previous post, that only about 10% of all Canadian lawyers were in large law firms, I began to wonder if that was, you know, accurate. So I checked the statistical breakdowns available at the Federation of Law Societies of Canada website and confirmed that yes, out of 79,147 active law society members at the end of 2006, 7,282 were in law firms with 51 or more lawyers, so the actual figure turns out to be closer to 9.2%.

But then, as often happens when I come too near a demographic breakdown, I became intrigued by a related issue: this time, the relative increase or decrease in large-firm membership over time.

Obviously, in the popular imagination, the last ten years have seen massive big-firm expansion, thanks mostly to steady growth by established players like McCarthys and Gowlings or mergers of smaller regional players into megafirms like BLG or Faskens. That perception has been aided by trade magazines like Lexpert that focused on the biggest firms (and a few high-profile urban boutiques) to the exclusion of other law practices. At the other end of the spectrum, we’ve also heard about the challenges facing sole practitioners and lawyers in smaller centers, the difficulties competing with title insurers and paralegals, and we would tend to expect that the day of the solo is ending.

Well, I ran the numbers and came up with a few charts that might be of interest. First of all, I compared types of private law practices in 1996 and 2006: Continue Reading

The good times rolled

A noteworthy item in the National Law Journal today, interesting for a bunch of reasons. The thrust of the article is that with a recession likely to arrive in 2008, associates at many top US firms are likely to see an end to the salary and bonus frenzy that has obsessed the legal press for the last year or so. (Starting first-year salaries of $180,000 and year-end bonuses approaching $55,000, in case you’re wondering.)

First of all, I had to smile at this explanatory sentence in the article: “Top firms, for the purposes of this article, compose a group of large New York-based law firms that, generally, copy one another in bonus structures.” That’s odd, because I thought top firms were the ones with lawyers who were, you know, extremely good at what they do and had the respect and loyalty of their clients. But apparently, top firms are the ones that are very big and do whatever the other very big firms do. This is the kind of muddled thinking that permeates too much legal journalism in the US and Canada both: mistaking the small fraction of huge firms retained by wealthy multinationals for the profession at large. The last time I checked the CBA database, lawyers in firms of 100 or more represented about a tenth of the legal population.

Secondly, the article talks up the coming recession, as has become widely fashionable lately and will, no doubt, soon become a refrain in presidential campaigns in the US and possible election calls in Canada. I don’t follow this topic especially closely, but it has seemed to me for a while that the booming economy we hear so much about has boomed for only a small percentage of the population, while real wages for a lot of working North Americans (including lawyers) have been stagnant or worse for awhile now. Banks may be hemorrhaging money in the wake of the subprime mortgage fiasco (and the imminent subprime credit card fiasco), but you could argue what we’re seeing is the financial sector coming down to earth and joining the rest of us. Of course, it’s the white-hot financial sector that has been driving “top firm” profits recently, so you can see how some white collars in those firms are now getting a little tight. (Gerry Riskin was on top of this months ago, at any rate.) Continue Reading

Waking the neighbours

Ten years ago, it was rare to see more than a passing mention of law practice management or legal business issues even in the legal press. Today, the legal press has finally caught up, but the mainstream media also seems to be warming to this topic. In recent weeks, we’ve seen prominent articles on lawyer job-hunting struggles in the Wall Street Journal, on the continuing bondage of the billable hour in Slate, and now on the decreasing appeal of legal careers in The New York Times (love that hip, timely photo of the cast of L.A. Law in the NYT story).

I’ll leave the articles for your perusal — they don’t say much that critics within the legal industry haven’t been saying for awhile –but it is interesting to see the MSM take an interest in the effects of the profession’s broken business model. One explanation could be the old anti-lawyer standby, that the media has always liked kicking lawyers around at any opportunity. But I don’t buy it in this case: the tone and approach of these articles is fair and at times downright sympathetic. The writers and editors behind these stories, I’m guessing, have friends and colleagues in the law and have been struck by their misery.

I suspect what we’re seeing here is the sharpening of the crisis within the profession — the tension rising to a pitch high enough to be heard outside our cloistered walls. This is, in the long run, a good thing — it’s like when an addict’s friends arrange an intervention; it lets the addict know that there really is something seriously wrong. I look forward to seeing a segment on the billable hour on a future 60 Minutes — and that’s not as outlandish as it would have sounded even a couple of years ago.

Amazon.law

This post originally appeared as an article at Slaw on December 16, 2007.

If you’ve ever ordered an item from Amazon, you know that every time you log back in to the website, you’re greeted with a list of recommended books, CDs and DVDs. Amazon compiles this list based both on your product purchases and the pages you’ve recently browsed. Essentially, Amazon alters its understanding of and relationship with you every time you use its services — whether browsing, adding items to your shopping cart, or actually purchasing something. Every point of contact between you and Amazon is another data point that redefines the relationship’s fluid dynamic.

There’s a lesson here for lawyers, and with technology continuing to evolve at an astounding rate, it’s a lesson that lawyers can start implementing right now. Lawyers already can — and someday, they all will have to — tailor their interactions with clients in the same way.

In the Amazon.law era, all types of client behaviour and activity can be automatically recorded and used to create and constantly improve a multi-dimensional profile of the client. This profile in turn can guide the lawyer’s interactions with the client, from billing and communication to service delivery and business development. To some extent, the technological tools to do this, from database software to customer relations management, already exist. Continue Reading

Partner up

I’m always a little bemused by those notices in the legal press in which national law firms announce that “X has joined the partnership.” I find it odd that a lawyer in, say, the Montreal office could refer to another lawyer in, say, the Vancouver office, as “my partner.” It seems to stretch the word rather beyond its general meaning.

The strict dictionary definition of “partnership,” as applied in a business context, is “a legal relation existing among persons contractually associated as joint principals in a business.” That’s a suitably dry, distant reading of the term for lawyers, who like to keep warmth and familiarity out of the workplace wherever possible. But it doesn’t jibe very well with the common understanding of what a partner is.

Think about the ways in which the word is used outside the law — “dance partner,” “tennis partner,” “jogging partner,” even “domestic partner.” They all suggest elements of teamwork, togetherness, friendship, common goals, and sharing. Try bringing up togetherness and friendship at the next partnership meeting and see how well that goes.

A lot of law firms these days, though, are gripped with tension and even turmoil about matters like partner compensation, partner defections to other firms, or partners’ behaviour towards others. At the core of many of these difficulties is a shortage of mutual trust, openness and common interest — precisely the elements that make non-law partnerships so successful. Maybe firms should rethink their aversion to the touchy-feely aspects of partnership.

This post originally appeared as the editorial in the December 2007 issue of National magazine.

Large firms and law schools

Law students seem to believe in a hierarchy of legal job options: large law firms #1, small law firms #1A, everything else #2 and lower. One of the main reasons for this is that the legal profession believes in it, too.

You don’t have to buy your average private-firm lawyer too many drinks before they’ll tell you that in-house lawyers “couldn’t cut it” in the trenches, that law professors are afraid of “the real world,” and that public-sector lawyers are basically civil servants with a law degree. It’s an asinine chauvinism, but one that’s still quietly held by too many private-practice lawyers (and that still resonates too much with some in-house/government/academia/NGO lawyers). That’s changing, but it’ll still be a while before our profession’s system is flushed of it completely.

Considering the broad range of legal careers out there, private firms (especially the large national and most prominent local firms) do have a disproportionately large footprint at law schools. These firms throw a lot of money, time and effort into branding themselves at the schools, resources that smaller firms and non-firm employers simply don’t have. You won’t see the Sierra Legal Defence Fund at too many OCIs. Little wonder that students assume law firms represent the be-all and end-all of legal careers, and focus their efforts accordingly.

But it’s also a fact that large firms are disproportionately represented in the pool of “employers willing to hire new lawyers.” Many large firms will hire two dozen or more articling students a year in one office alone — there are smaller and even midsize firms out there that won’t take on that many articling students in their lifetime. The associate pool at many large firms is larger than the full lawyer complement at most Canadian law firms.

Law firms are, effectively, the engine of post-call new lawyer training in Canada. A lawyer at one large firm in Alberta related that right before the firm announces which articling students will be hired back, she gets calls from other firms and legal employers inquiring about the ones who won’t make the cut. She’ll soon see those lawyers, whom her firm has spent a lot of money feeding, clothing and training, opposing them in court. That happens across the country.

How long firms are willing to subsidize post-call legal training in Canada is an open question – I keep thinking they’ll eventually run the cost/benefit analysis and rethink their policy. But for the time being, the legal profession requires these firms’ annual willingness to hire a lot of graduates who will eventually turn into few senior associates and even fewer partners. And all the students graduating with $50,000 in debt — which they won’t pay off with a job at the Ministry of the Environment — require it too.

All that said, I’m sympathetic to the plight of the excellent legal employers outside the law firm community who have little or no profile among law schools. But their day will come. When third-year students and young associates talk longingly about “alternative careers,” they’re belatedly turning their attention to the other 90% of the legal profession outside of large law firms. I’m a ‘95 call, and I and many of my friends articled and “associated” (is that a verb?) with law firms. Today, the great majority of us work for government, corporate law departments, or NGOs.

Law schools ought to do a better job informing students of the wide world of legal careers. But that’s encompassed by the much larger and more significant question of the relationship between law schools and law firms – a relationship in need of some serious work.

This post originally appeared at Slaw on November 13, 2007.

Three for the money

Three interesting items in the inbox today, each of which reflects a different facet of the many forces hard at work on producing imminent changes to the profession.

First comes news from the ABA’s Law School Admissions Council that the number of applications to U.S. law schools dropped in 2006 by 7.6%, the second straight annual decrease on top of a sharp deceleration in 2004 in the longstanding trend of rising admissions. The linked article focuses on the drop in both applications and admissions among women, and properly so. But many of the reasons for the decrease cited in the article — stronger economic times, more lucrative non-law career paths, bad publicity about punishing workloads in law firms — cross gender barriers altogether. With the talent wars in full swing, the private bar will not be happy to hear of a potential trend towards smaller graduating classes. I’d be very interested in seeing similar statistics from Canadian law schools.

Secondly, the consultants at Grant Thornton have released their 2007 Professional Services Insights survey, which looks at numerous mid-sized professional firms in fields such as engineering, architecture, and especially law (almost half of all respondents were law firms). The report says professional firms’ fundamental management models will have to change, in light of client consolidation, talent recruitment and retention, and generational cultural changes. “A broader team-based model characterized by a firm-client relationship will need to be adopted by professional services firms, to respond to the broader needs faced by clients and the new career demands of next-generation practitioners,” the press release says. “The report identified a trend toward this type of thinking at architecture and engineering firms, but” — you know where this is going — “less so among law firms.”

The day’s final story contains news of one law firm in Alberta that apparently is ready to adopt and adapt to the dynamics of 21st-century business. The Calgary Herald reports that the law firm of Shea Nerland Calnan is the joint owner of a new tax advisory firm called Moody LLP. The new firm isn’t providing any accounting services, even though most of the employees are CAs — it’s offering purely advisory and tax planning services. “What we see is the mid- to small-sized accounting and legal practices in the province don’t have tax planning departments,” Nerland told the Herald. “There are more and more people in need of those top-end planning services. There’s a lot of opportunity there.” There’s also a lot of opportunity for law firms to make bold strategic moves like this — Moody LLP is the first such jointly owned tax advisory practice in Alberta and only the third in Canada.

There’s a real first-mover advantage available to lawyers and law firms that feel the ground shifting under their feet and reposition themselves accordingly. It’ll be interesting to see who moves fastest and best.

This post originally appeared at Slaw on October 2, 2007.