Diversity

The American Lawyer

Women are still “very much the minority” in the power structures of the top US firms, as illustrated in a recent survey of the Am Law 100. Of the 93 responding firms, governing committees had an average of 17% women and compensation committees had an average of 18% women; only 20% of practice group leaders and 15% of office managing partners were female. The top two firms for women in leadership positions were Fulbright & Jaworski, with women occupying 50% of the seats on the executive committee, and Reed Smith at 38%. Both firms took advantage of their own governance rules allowing for appointments in order to reach diversity goals. In the case of Fulbright, the chairman appoints the executive committee and department heads. At Reed Smith, an open election process is supplemented by three “at-large” seats filled by nominations made by the executive committee.

The Lawyer

Ashhurst, Allen & Overy, Clifford Chance, and several other law firms (called the 30% Club) participated in a project to advance the leadership roles of women in law firms. The findings of an online feedback survey conducted as a part of a 10-week project indicate that attrition and prioritization are not the root causes of the limited progress of women to senior positions in law firms. Instead, the limited progress is an outcome of partnership promotion processes that fail to evaluate abilities and leadership styles of women in an equitable manner. A senior partner from Ashurst, Charlie Geffen, said that the peer pressure of the 30% Club could help to create effective social norms to ensure the goals of gender diversity are accomplished.

The Guardian

In response to a May 2012 report by Alan Milburn, the UK’s social mobility tsar, as well as a 2012 mandate from the Legal Services Board that law firms begin collecting socio-economic data on their staff and recruits, law firms are exploring ways to reach out to low-income students. Indeed, firms are keen on advertising themselves as agents of social mobility and shaking off the perception that law is merely for Oxbridge elites. For example, Linklaters recently joined with Hackney primary schools to bring 750 children and teenagers to their offices each year to experience life in an international law firm. Moreover, recognizing the limitations of a firm-by-firm approach, 23 firms joined to create the PRIME initiative, which obliges members to provide work experience and mentorship opportunities to disadvantaged youth equal to half the number of traditional training contacts offered. Similarly, the Law Society created a Diversity Access Program and offers grants to the Black Lawyers Directory.

The National Association for Law Placement

For the third consecutive year and only the third time since The National Association for Law Placement (NALP) started keeping track in the early 1990s, representation of women among law firm associates declined. From 2009 to 2012, the percentage of associates who are women fell from 45.6% to 45.0%. This contrasts with continued gains in the percentage of women and minority partners, as well as an increase in the percentage of minority associates—a group that, like women associates, had struggled in the wake of the recession. Said James Leipold, NALP’s Executive Director, “The continued loss of women from the associate ranks, at a time when far too few women make up the partners of U.S. law firms, is a problem that firms must begin to address head-on.”

ABA Journal

According to a new report released by the New York City Bar Association, diversity among the city’s law firms has stagnated in recent years. The survey shows that women and minorities are making up a smaller percentage of new hires and that those two groups have much higher attrition rates than their respective male and white colleagues. One piece of good news for women contained in the report is the gains they have made in partnership and other leadership roles during the same period.

Globalization

The Asian Lawyer

Several opportunities have emerged for medium and small law firms in Australia, following recent international mergers by four of the big six law firms. Some are recruiting lawyers voluntarily leaving the new mega firms or hiring entire practice teams that want more independence than they can get in the largest firms. Middle-sized firms have been buying some smaller firms but do not feel the pressure to merge with each other to compete. Instead, many are focusing on domestic business and acquiring clients that cannot be served by the mega firms due to new conflicts of interest generated by the mergers.

Seattle Times

The international legal community has issued a stern warning to the Vietnamese government regarding their proposed changes to the country’s law on legal services, cautioning that it would restrict foreign firms and deter investors. Proposed changes would mandate that only Vietnam-based firms provide legal services in the country. Critics say this will make investment in Vietnam less attractive to foreign firms and will unnecessarily constrict the flow of legal services.

Law.com

Law firms looking to establish a foothold in Southeast Asia have turned their eyes away from China and are looking to Singapore as an ideal place to establish offices. The country’s central location within the region, proximity to emerging economies, and friendliness to business have led nearly two dozen firms to apply for licenses to practice in recent months. Singapore provides easy access to Indonesia’s growing economy, as well as Australia and India, making the country a huge growth spot for international firms looking to expand their practices.

The Asian Lawyer

Increased interest has been generating around Asia’s growing legal market in recent years with firms choosing to maintain large numbers of lawyers. Both China and Australia have the largest firms in all of Asia making up almost 30 of the 50 largest firms. The trend can be partly attributed to British influence and colonization over the years, making the establishment and success of major British firms a more palpable idea in Australia. Figures show that American law firm presence is growing but still does not match that of the UK, especially not in large Asian markets.

Law Firms & Practice Management

Inside Counsel

Industry experts are seeing an increasing trend of cross-border mergers and the creation of mega-firms comprised of thousands of lawyers. The Wall Street Journal reports that in late 2012 there were three major deals on the books, the largest of which would create a mega-firm of over 3,800 lawyers (London-based Norton Rose with the Houston-based Fulbright & Jaworski). One of these mergers, between the Pittsburgh-based K&L Gates and the Sydney-headquartered Middletons, creates a firm of more than 2,000 lawyers. Experts expect these sorts of cross-border mega-mergers to continue, particularly in areas outside the traditional financial centers of London, New York, and Hong Kong.

The Wall Street Journal

In an American Lawyer magazine poll, 55% of 113 managing partners and chairpersons said they would be asking between one and five partners to leave the firm in 2013. With the recent reduction of junior lawyers and staff in the years after the economic downturn, many big firms are raising expectations as to how well their partners should be performing by closely watching how much business lawyers bring in and how many hours they bill. Much of this pressure comes from the downsizing of bigger firms and cuts to many of these firms’ partner corps. With fewer high-paid partners bringing in more business, savings and profits will increase dramatically.

The Guardian

The traditional magic circle of A-list UK law firms faces increasing competition from major US firms for newly graduated British legal professionals. Brand name remains important, and while US firms often enjoy high levels of prestige in the States, it takes time to build up a strong, independent UK reputation. British firms are seen as offering more niche options, whereas US firms are focused on business and financial. Pay is an important determinate and, in this category, US firms tend to offer junior lawyers the best remuneration. US firms are also seen as topping UK firms when it comes to corporate transparency and prospects for partnership. Both UK and US elite firms demand high hours, with junior lawyers frequently being expected to bill 1,800 – 1,900 hours per year.

Legal Education

The ABA Journal

Enrollment in non-JD programs at ABA-approved law schools has increased significantly as law schools try to broaden their revenue streams in the face of declining demand for JD degrees. From 2005 to 2012, schools reported a 39% increase in enrollment in non-JD programs. Over that same period, enrollment in JD programs declined slightly. Non-JD programs at law schools typically attract lawyers who seek to expand their knowledge of a specific practice area, as well as individuals whose work demands knowledge of law and the legal process. 

Huffington Post Op-Ed

In an op-ed in the Huffington Post, Hastings College of Law Dean Frank Wu argues that the frequently derided law school electives—what he dubs as “Law &” courses—in reality serve a vital purpose in the training of well-rounded legal professionals. While he accepts that the ability to perform legal analysis is critical for any law graduate, Wu argues that legal reasoning alone is no longer sufficient to be a leader in the profession. He notes there is an increasing need for interdisciplinary, strategic, and technically proficient legal thinkers. Using the examples of STEM (science, technology, engineering, and math) and business training, he argues that legal professionals require a similar kind of diversified and highly technical preparation to lead the profession into the future.

Attorney Regulation & Ethics

Wall Street Journal Law Blog

University of Missouri School of Law Professor Ben Trachtenberg’s forthcoming Nebraska Law Review paper “Law School Marketing and Legal Ethics” outlines several marketing tactics employed by law schools that may be considered ethical violations by the ABA. According to Trachtenberg, on law school websites that are designed to appeal to prospective students “the seemingly straightforward recitation of statistics… still paint[s] an unduly rosy picture of the legal employment market.” If these statistics are found by bar officials to be manipulated or intentionally misleading, they may violate the ABA Model Rules of Professional Conduct; law school employees who are members of the bar and who engage in dishonest marketing practices would be at risk for disciplinary action.

Corporate Counsel

The Asian Lawyer

In-house recruitment of Bengoshi, or Japanese-qualified lawyers, has been on the rise in Japan. The economic downturn after Japan’s devastating earthquake and tsunami has led companies to hire more in-house counsel in order to cut costs. However, according to Yasushi Murofushi, the president of the Japan In-House Lawyers Association, the rise in in-house positions is due to an oversupply of young lawyers looking for jobs.

Wall Street Journal and Wall Street Journal Law Blog

The Securities and Exchange Commission’s whistleblower program, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, guarantees that whistleblowers will collect a bounty of up to 10% to 30% of penalties if their information leads to an enforcement action resulting in penalties in excess of $1 million. According to the Wall Street Journal, this can create a major issue for GC as they work to create internal programs and a corporate culture that encourages the reporting of offenses such as bribery and fraud. Don Liu, general counsel for Xerox Corp states, “The law provides people big incentives to ignore internal compliance programs and rush straight to a regulator.”

Innovation & New Models

The Asian Lawyer

Co-CEOs David Perla and Sanjay Kamlani relinquished control of Pangea3 LLC in November 2012 after selling the company to Thomson Reuters Corporation for what some estimate to be $40 million. Their exit has led to speculation about whether the outsourcing industry has reached its peak. Deepti Krishnan, an analyst at the Indian research company ValueNotes Database Private Ltd., says that outsourcing will produce huge changes in the culture and business processes at law firms, but only after a significant pushback.

Editor: Daniel L. Ambrosini
Managing Editor: Nicola Seaholm
Contributing Editors: Nathan Cleveland, Bryon Fong, Rachel Gibson, Nicholas Haas, Hakim Lakhdar, Pavan Mamidi, Mihaela Papa, Erik Ramanathan

Diversity

Saudi Female Lawyers to Practice Law

Al Arabiya News

The Saudi Ministry of Justice will now allow female lawyers to obtain licenses to practice law, and they will have to meet the same conditions as men. The Ministry is preparing a database of licensed female lawyers and installing a fingerprint system in all courts so that their identity can be verified without showing their faces. Women who graduated from law schools were previously allowed to work as legal consultants in companies or banks, but could not represent clients in court, open law firms in their names, or be officially considered lawyers. Several factors motivated the policy change: female legal consultants could not be held accountable in case of violations; women lawyers intensified a campaign on social networking websites; and some Saudi women expressed discomfort with hiring male lawyers especially in personal status lawsuits.

Gender Disparity in Law Firms in Old Blighty

The Careerist

Only 9.4% of equity partners in UK law firms are women. This is significantly less than the stagnant 15% of partners in American law firms who are women. Reasons for the low rates of partnership have been attributed to a slow pace of change in the legal profession by Suzane Rab, a partner at King and Spalding. She thinks that the “all boys” network is a superficial reason. The legal profession changes slower than society, and unless something makes business sense, things will not change. The Times reported that the law firm Hogan Lovells is aiming for 25% female partners by 2017 and 30% by 2022.

Globalization

Foreign Law Firms in Malaysia

The Lawyer

Foreign law firms can now practice law in a controlled manner in Malaysia after the Legal Professional (Amendment) Act was passed in June of this year. They may practice as qualified law firms or in partnerships with Malaysian law firms, and are allowed to practice in prescribed areas. While it is difficult to predict the effects of the new legislation on market conditions and on local firms, there is a view that, like in China, Japan, and Singapore, the entry of foreign law firms need not be detrimental to local law firms.

Canadian Firms Enter the Global Market

Wall Street Journal Law Blog

In February 2013, the Canadian firm Fasken Martineau DuMoulin LLP will broaden its presence in South Africa by merging with Bell Dewar Inc. of Johannesburg. Fasken Martineau represents major Canadian banks and specializes in mining and project infrastructure as well as work in the oil and gas extraction industries. According to Fasken’s managing partner David Corbett, “our firm’s philosophy has been to look for opportunities internationally…[and we] see Africa as a very natural place for us to be.” The move follows the January 2012 merger of the Canadian wing of London-based firm Norton Rose with Calgary-based Macleod Dixon, with offices in Venezuela, Colombia, and Kazakhstan.

Permission to Speak in EU’s Top Court

Wall Street Journal Law Blog

If advocates before the European Court of Justice want to make oral arguments, they will now have to convince the court of their necessity. This new measure was designed with the aim of saving time and decreasing the backlog of cases. The court took on 688 cases last year, up from 581 in 2007 and primarily hears competition cases. The change, “will allow the court to concentrate its resources on those hearings which will bring added value to the handling of a case.”

Legal Education

NYU Law Revamps the 3L Year Encouraging Specialization and a Global Focus

New York Times (also see this related article)

In response to guidance from law firm leaders and the debate over whether a third year of law school is necessary at all, New York University School of Law is revamping its 3L curriculum by focusing on several themes or “professional pathways.” Students will have the opportunity to work on specialized studies, and more importantly, to choose from several off-campus opportunities including studying abroad or working at a government agency. The new programs are optional, and students may still choose a more traditional 3L experience, but NYU Law Dean Richard Revesz hopes they will be popular, and says that “students will not maximize their final year if they just take a random set of courses.” In response to the move toward a more specialized legal education, Dealbook’s Victor Fleischer goes one step further arguing that “law schools should play matchmaker, guiding students toward specialties that are likely to endure [including] bet-the-company litigation,…mergers and acquisition and securities work.”

Marketability of the LLM Degree

The Guardian

As the market for junior lawyer jobs has tightened in the UK—and as firms no longer view an applicant with a masters degree in law (LLM) as intrinsically better than one with a year of industry experience—prospective LLM students are demanding more “bang for their buck.” Universities are augmenting traditional LLM courses with options that reflect shifts in the professional marketplace. For example, many are combining their LLM programs with language training requirements—a direct indicator of the increasingly international legal marketplace and demands of their students to be competitive in it. Others, such as Northumbria University, are broadening part-time options to complete the LLM so that participants can combine in-classroom knowledge with practical work experience.

Too Many Lawyers with Too Much Debt

The Washington Post

As concerns continue to mount for recent graduates and their futures as lawyers, so does the amount of debt being accumulated by unemployed law school graduates. Law schools like University of California at Irvine tout a whopping $77,000 as their average annual cost per student, yet claim that students pay for quality that will allow them to beat out other graduates for positions as lawyers. According to the US Bureau of Labor Statistics, it was estimated there would be 73,600 new jobs for lawyers between 2010 and 2020, yet three years into the decade there have been 132,757 new lawyers in the job market.  

Public Interest Lawyering

All Lawyers in Singapore May Need to Provide Community Legal Services

Today Online

The Singapore Academy of Law has proposed that all lawyers who hold practicing certificates, including those who work in foreign law firms, provide Community Legal Services (CLS) to low-income and disadvantaged Singaporeans. It proposed that lawyers contribute a minimum of 16 CLS hours per year and those who do more can carry forward a maximum of eight hours to the next year. The Law Society of Singapore’s Pro Bono Services Office will administer the CLS, which will initially comprise criminal and civil legal aid, community mediation, and legal advisory work to institutions and charities.

Public Interest at Harvard Law School

The Crimson and ABA Journal

Even if law school graduates can afford to take lower paying public sector jobs, there may not be enough legal positions to fulfill demand in this sector. Harvard Law School’s hiring rate only fell 4.3% during the downturn, indicating the relative ease in which HLS students can obtain private sector positions. The effects of the downturn on the public sector have hit more gradually than for the private sector, and the recovery is slower. HLS has made efforts to encourage students interested in the public sector, including the creation of the Holmes Public Service Fellowships in 2009, the Redstone Fellowships in 2010, a new program of study entitled “Law and Social Change”, and Dean Martha Minow’s Public Service Venture Fund. HLS sees this support as essential in order to cultivate and maintain students’ interest in public sector work in the face of external obstacles.

Are Public Interest and Public Sector Careers Worth the Cost of Law School?

ABA Journal

The National Association for Legal Professionals (NALP) released a study indicating that salaries in public interest and public sector careers have kept pace with inflation; the increase in cost of law school education has far exceeded the rate of inflation. According to NALP, the median entry-level salary is almost $43,000 for legal services attorneys, $45,000 for public interest lawyers in groups with issue-driven missions, $50,500 for public defenders and $50,000 for local prosecutors. With 11-15 years of experience, these salaries increase to $65,000 for legal services lawyers, $75,000 for public interest lawyers, $78,600 for public defenders, and almost $76,700 for local prosecutors. NALP Executive Director James Leipold notes, “Despite favorable changes in the federal loan repayment options available to law school graduates working in the public interest, there are still significant economic disincentives at play as law students consider whether or not to pursue public interest legal careers.”

Law Firms & Practice Management

Law Firms Used Technology to Take Care of Business during Hurricane

The Connecticut Law Tribune and Reuters

Connecticut law firms used technology to keep deals on track and clients happy amidst a natural disaster that closed roads, flooded homes, and left millions without power. One firm implemented a text messaging system among the team to keep business going as usual. Another firm utilized an offsite server, cloud-based appointment calendars, and e-mail calendars. Some firms gave staff a USB WiFi generator that does not require electricity. In New York City, many top firms were forced to evacuate their buildings but lawyers nonetheless worked remotely. Cadwalader, for example, provided attorneys updates via email and an emergency telephone hotline; calls and faxes to the New York office were rerouted to the Charlotte, North Carolina office.

UK Firms Serving Overseas Markets

Bloomberg

The distribution of revenue for legal services in the UK is highly skewed in favor of the 10 largest law firms. They account for almost 50% of the revenue for legal services among the top 100 firms. A sizeable 40% of this revenue comes from providing services in growing overseas markets. While investing in international markets can bring higher revenue, it has not yet offset the downturn in revenues since the financial crisis began in 2008.

Attorney Regulation & Ethics

Keeping Client Information Confidential

Lawyers Weekly

An Australian survey was conducted among 80 risk professionals from 30 of the largest law firms in the country with approximately two-thirds of respondents reporting that information about clients is openly accessible to all staff. According to Andrew Fisher, Clayton Utz’s national manager of technology/infrastructure services, “We are increasingly being asked by our clients to be ISO 27001 certified and that hasn’t been something we have been asked for in the past.” Several firms have started to offer their staff additional training in order to avoid commercial conflicts of interest and meet increasingly stringent regulatory requirements.

Corporate Counsel

GCs’ Regulatory Expertise Leading to Executive Presence and Higher Salaries

Wall Street Journal

With regulatory developments including the Foreign Corrupt Practices Act, the Affordable Care Act, the Dodd-Frank financial law, and the unfamiliar cultures and laws in emerging markets, highly sophisticated in-house attorneys must navigate complex laws and assure compliance—and more frequently, they are now joining the ranks of top executives making business decisions and setting goals. GCs are leading teams specifically designed to monitor compliance issues and prevent violations. The need for increased expertise has fostered highly competitive salaries, with pay for GCs increasing 12.8% in 2011, a rate twice as high as that of CEOs, whose pay grew 6.2% in 2011. According to a recent poll of 48 executives conducted by Consero Group LLP, nearly 50% reported adding compliance staff in 2011.

Survey Shows Chief Legal Officers Reducing Costs

Philadelphia Business Journal

A survey by Altman Weil of more than 200 chief legal officers reveals that they are taking steps to control costs without waiting for law firms to change their business models. According to the survey, 71% negotiated price reductions with outside counsel, 47% shifted work from law firms to in-house lawyers, and 41% shifted work to lower priced firms. Furthermore, 39% of law departments decreased their outside counsel budget in 2012. The top factor in selecting outside counsel appears to be “demonstrated understanding of your business/industry” followed by colleagues, personal contacts, and written material showing a lawyer’s expertise.

Innovation & New Models

UK Law Firms Concerned about Private Equity Investment

Reuters

Since UK law firms have been allowed to seek external investment by converting from partnerships into Alternative Business Structures (ABS), private equity firms have shown interest in the legal industry that is worth nearly $40 billion a year in fees. Yet, according to a recent Thomson Reuters Sweet & Maxwell survey, 88 of the 100 largest law firms thought that raising money by selling shares on the stock market was inappropriate for them; only one out of 20 law firms that have converted to an ABS so far has taken private equity investment. Law firms have been concerned that pressure from shareholders to deliver short-term returns would radically alter the firm culture, and allowing fee-earners to cash in their stakes in the business could be a disincentive to others.

Program Notes

Linklaters India Internship

This year, Linklaters India Internship, the Program on the Legal Profession’s J-Term research program for 2L and 3L students, has accepted 15 interns. These interns will spend three weeks in Mumbai conducting original research while interning at prestigious law firms, general counsels, and courts. The placements include Amarchand & Mangaldas, AZB, the chambers of Justice Chandrachud, Khaitan & Co, Nishith Desai Associates, Talwar Thakore Associates, and the Tata Group. Interns’ research proposals cover a broad range of topics, including energy development, Bollywood and intellectual property, the All India Bar Exam, slum revitalization, sentencing for gender-based crimes, and India’s conception of freedom of speech.

Executive Education: Emerging Leaders in Law Firms

Harvard Law School Executive Education will host Emerging Leaders in Law Firms, an intensive, five-day program specially developed for attorneys who have entered equity partnership within the past two years. As partners, this group of lawyers is taking on larger managerial responsibilities and is expected to exert greater leadership. The program offers them leadership and managerial perspective and skills to transition to partnership successfully. The program will be held at Harvard Law School from March 10 – 15, 2013. To learn more, please visit the Executive Education website.

Executive Education: Leadership in Law Firms

Our flagship program, Leadership in Law Firms, offers law firm leaders insights into the challenges they face, and provides concepts and skills to be effective leaders. Participants in previous cohorts of our programs have been leaders of highly regarded law firms from around the world, holding executive positions such as senior partner, managing partner, chairman, practice group head, and office head. The program will be offered twice in 2013 at Harvard Law School, May 19 – 24 and September 8 – 13. For information, please visit the Executive Education website.

Colloquia: Leading During Challenging Times

Led by the world’s top law school faculty, Harvard Law School Executive Education will host one-day colloquia in New York and London on critical topics for law firm and corporate counsel leaders. The upcoming Colloquia for Law Firm Leaders are designed for leaders of law firms worldwide (including managing partners, senior partners, chairmen, chief executive officers, chief operating officers, executive directors, executive committee members, office heads, practice heads, and sector heads) and will be held on January 8, 2013 at the Harvard Club of New York, and January 24, 2013 at the Honourable Society of Lincoln’s Inn in London. For more information, please email Karen Travelo.

The upcoming Colloquia for Corporate Counsel Leaders are designed for leaders in corporate counsel offices who currently have or will assume the role of general counsel or chief legal officer in their corporations and have teams of professionals—in particular specialties, sub-functions, practice areas, geographies, divisions, or the entire corporation—reporting to them. These events will be held January 9, 2013 at the Harvard Club of New York and January 25, 2013 at The Honourable Society of Lincoln’s Inn in London. For more information, please email Shironda White.

Globalization

Shanghai Bar Association Admits Foreign Lawyers as Special Members

The Asian Lawyer

Six years ago, the Shanghai Bar Association was the key advocate for strong protections against foreign law firm competition and was eager to “purify” the Shanghai foreign legal services market. This year, however, it became the first bar association in China to admit foreign lawyers and international firms as members. The benefits of membership are primarily a social and networking advantage and do not give members practice rights. The special memberships reflect a new balance between Chinese and foreign lawyers; many foreign firms have given up trying to compete during financial crisis and focus on outbound work.

Freshfields Broadens Focus in Euro Zone and Emerging Markets to Stay on Top

New York Times

Like many of its competitors, the London-based firm Freshfields Bruckhaus Deringer has experienced a drop in net profits since 2008, but adaptability and a focus on global strategy have kept the firm relevant and competitive. Freshfields is advising various banks and restructuring companies in the wake of the European debt crisis; according to Thomson Reuters, Freshfields has been involved in nearly 25% of European-related mergers and acquisitions in the first half of 2012. The firm has aimed to increase its cross-border business and worked to “stay at the front of the pack,” according to Freshfields worldwide corporate practice head Edward Braham, who also states that “about one third of what we’re doing now is connected to emerging markets” including China.

New Arbitration Center in Hong Kong

Channel News Asia

The China International Economic and Trade Arbitration Commission (CIETAC) established its first center outside mainland China—in Hong Kong. The government has been eager to establish Hong Kong as an international arbitration hub, and it expects increasing demand for high-end legal and dispute resolution services from Chinese enterprises going global. Rimsky Yuen, Hong Kong’s Justice Secretary, states, “As the mainland’s economic development continues to mature, more and more enterprises are going. There will be an increasing demand for high-end legal and dispute resolution services from these enterprises.”

The Changing Landscape of the South African Economy in a Global Market

American Lawyer

This past summer fifteen top South African corporate partners were interviewed by the American Lawyer as part of an in-depth report on the rapidly changing South African legal profession. In recent years, there has been heavy global investment in the region as international firms are drawn by the continued investor interest despite the global recession. Chinese companies signed $5 billion dollars in deals last year alone, and India announced similar plans for $5 billion in investments over the next three years. This rapidly changing landscape has particularly benefitted the three largest independent South African firms: Bowman Gilfillan, Webber Wentzel and Edwards Nathan Sonnenbergs Inc.

Diversity

ABA Formally Petitioned to Make Diversity the Responsibility of All Lawyers

National Law Journal

The Institute for Inclusion in the Legal Profession (IILP) recently sent a letter to ABA President Laurel Bellows asking the organization to amend its Model Rules of Professional Conduct. Their goal is to have the model rules include a provision stating that lawyers have an obligation to promote diversity and inclusion. According to the IILP executive director Sandra Yamate, it would be a formal way “for the ABA to meet its goals,” a reference to nonbinding Goal III, which calls for the elimination of bias in the profession and enhancement of diversity. An ABA spokesperson said “the proposal would work its way through the ABA’s legislative process.”

Diversity Report Highlights Lack of Diversity among Biglaw Firms in Texas

AboveTheLaw

According to the 2012 Law Firm Diversity Report, Biglaw firms in Dallas, Texas did not make the grade. According to the report, eighteen of the twenty largest firms in Dallas received failing grades on diversity and the highest grade overall was a C+. Only 1% of the 840 equity partners at these firms are black and thirteen of the firms have no African-American partners at all. Additionally, nine firms lack any Hispanic partners. The results are troubling for diversity advocates and corporate clients alike, as many companies are showing an increased interest in giving work to firms with a strong commitment to diversity.

Gender Differences in the Boardroom

Corporate Counsel

A new study from Harvard Business School explored whether men and women on corporate boards think alike in most respects. Men and women respondents were similar in their outlooks on top political concerns, corporate challenges to strategic growth, and concerns about talent management. The only gender differences that show up in their study relate to succession planning on boards, adoption of new technologies, and boardroom diversity. According to the study, 35% of women said “traditional networks tend to be male-oriented” compared to 21% of males who thought so.

Attorney Regulation & Ethics

Nonlawyer Investments in Law Firms

ABA Journal

Nonlawyer investments into and ownership of law firms is prohibited in every US jurisdiction, with the exception of the District of Columbia, which allows for it in a limited way. Australia, Canada, and the UK have already made changes to allow for nonlawyer ownership of law firms. US law firms doing business in foreign countries therefore must deal with how to reconcile flexible rules concerning business structures overseas. The ABA House of Delegates voted to postpone indefinitely a resolution to reaffirm that nonlawyers should not have an ownership role in law firms and should not share legal fees with lawyers.

Are Internal Investigations into Corporate Wrongdoing Good Enough?

New York Times

Companies are now responding to reports of corporate misconduct by pledging to cooperate with authorities and hiring law firms to conduct investigations. This arrangement is ideal for both government prosecutors and companies in that the government can avoid spending taxpayer money on investigations that may or may not lead to prosecution while the company retains control over information and protects itself from potential surprises. One suggestion is to expand whistle-blower programs that reward individuals who report corporate violations directly to the government.

Corporate Counsel

Broken Relationships between Firms and Clients

Corporate Counsel

A recent report by Acritas, a UK-based market research firm, investigates why law firms are losing important blue-chip clients. The reasons include poor quality work and sending too many invoices; poor service coupled with delays and disconnect between price and quality; and loss of partners from the firm who were managing the client relationship. One health care client reported, “[We stopped using them] mostly because of cost and efficiency” and “they put their own interests ahead of their client’s interests.”

Advice for In-House Lawyers from One Recently Acquitted

Wall Street Journal Law Blog

Lauren Stevens, formerly vice president and associate general counsel for GlaxoSmithKline PLC, was acquitted last year on charges of making false statements to the Food and Drug Administration. She recently expressed fears that her case signals the “criminalization of the practice of law,” and shared some advice for in-house lawyers who might feel targeted by the government. First, if you hire an outside firm, make sure they know all the facts, make sure they sign all the documents, and make sure other parties know you have hired outside counsel. Second, take accurate notes and recognize that they could end up in court or even newspapers. Third, be careful in your correspondence with adverse parties, and if possible, express your more zealous statements verbally and not on paper; statements on paper can be used in court and taken out of context.

Innovation & New Models

Solo Practitioners and Incubator Models

ABA Journal

As part of an incubator model, with an admissions process, the City University of New York School of Law offers solo practitioners the ability to rent Manhattan office space for only $500 a month in exchange for a commitment to work at least 12 hours per month representing underserved populations. The solos work at a rate of $75 per hour for up to 18 months. In addition to helping solos overcome the feeling of being on their own, according to CUNY law professor, Fred Rooney, “it’s also great for the lawyer because it offers a startup solo practice with guaranteed, paying clients.”

Jacoby & Meyers Starts Online Legal Forms Business and Continues Fight to Allow Non-Lawyer Investors

Wall Street Journal Law Blog; also see this related post

Even as the New York law firm Jacoby & Meyers redoubles its efforts to reverse a rule prohibiting outside investors in law firms, the firm is now entering the online legal forms market currently led by LegalZoom.com. Jacoby & Meyers new venture, LegalForms.com, will provide customers with access to legal templates and documents such as wills for a small fee. According to national partner Keith Givens, LegalForms plans to distinguish itself from LegalZoom by offering a three-tiered system that will allow clients to opt for inexpensive do-it-yourself forms; a mid-range service where clients use the do-it-yourself forms with some assistance from a Jacoby & Myers attorney; or the “full-service model” where the attorney handles the entire transaction.

Career Planning and Law School Innovation

The Huffington Post

Law schools can no longer only provide educational services that enable students to become legal professionals. In the current economic climate, law schools must also provide career support to ensure that students, upon graduation, are able to obtain a job and pursue a career. In order to encourage students to take advantage of its career services, Valparaiso Law School has created VOLT, an interactive website that provides career-tracking services to law students. At its core, VOLT is a checklist of steps students should take throughout their time at law school to land a job upon graduation. VOLT also includes job postings, the school’s calendar of events, newsletters, and the school’s LinkedIn site.

NerdWallet Introduces Law School Comparison Resources

New York Times

The financial website NerdWallet.com has launched a new education-related resource tool to compare law schools. Users of the website can choose up to four law schools and compare statistics such as class size, long-term employment figures, judicial clerkships, industry sectors, and salaries of graduates. One can also view longer ranked lists sorted by various categories and geographical criteria. The tool is designed to help prospective law school students choose a school based on career paths and where they want to live after graduation.

Law Firms & Practice Management

Law Department Spending on the Rise

Law Technology News

Companies around the globe are increasing their legal spending and approaching pre-2009 levels, according to a recent Harvard Business Review Consulting survey. The survey, now in its 26th year, reveals that both inside and outside counsel spending have increased in the past year. The survey follows two additional reports recently unveiled that also indicate increased legal spending among departments. The International Legal Technology Association (ILTA) and Inside Legal both indicate that technology spending at more than half the 114 ILTA firms has increased 2%, and that firms spending more than $26,000 per attorney rose to 9%.

Smaller Firms find it Easier to Make Deals

ThomsonReuters

The number of law firm mergers and acquisitions continues to climb but the trend seems to be towards smaller regional firms taking all the action. In a recent article from ThomsonReuters, three Florida firms were highlighted for their recent activity in the Southeast and along the East Coast. Where several of these transactions were handled by larger firms in the Northeast, these smaller Florida firms have recently acquired firms in New York, Virginia, and other parts of the state. The belief that larger M&A transactions are just too complicated has increased the appeal for these smaller firms to enter the race.

UK’s Biggest Law Firms Hire Senior Teams from Rivals

Financial Times

Some UK law firms are seeking to bolster their bottom lines by poaching other firms’ partners or teams who have established revenue streams they can bring with them. Sweet & Maxwell’s research finds that 64% of finance directors at the top 100 firms ranked by turnover said they were more likely to hire senior teams from rivals over the next year, compared with 29% last year. The practice is risky, however, when it uses methods like guaranteeing salaries over time; the role of guarantees in the collapse of Dewey & LeBoeuf is a case in point.

Legal Education

Preparing Law Students for Careers as In-House Counsel

Corporate Counsel

The cover story of November’s Corporate Counsel features a growing trend in legal academia—the value of experiential learning in preparing law students for the role of in-house counsel. At Harvard Law School, a new course entitled “Challenges of General Counsel” is being taught by former GC and secretary of General Electric, Ben Heineman and Professor David Wilkins, faculty director of Harvard Law School’s Program on the Legal Profession. The innovative course teaches law students about how GCs deal with complex legal and ethical problems at the intersection of law, business, and various other disciplines. Heineman states, “This is really a course about how to be a lawyer when the law is only part of any question you’re dealing with.” Similar courses are being offered at Stanford and Yale.

Legal Education and the Perfect Storm

Huffington Post

Legal education is at critical point, an almost “perfect storm”, thereby requiring an innovative outlook of where it will land in the next few years. In an opinion piece, Professors Oliver Goodenough and Rebecca Purdom of Vermont Law School reimagine what legal education could look like in the next few years, particularly with developments in the world of e-technology and distance learning. “Imagine a book that includes both content, access to a content guide (a teacher), and interactive games at certain levels to ensure that both knowledge and skills…grow as information becomes more complicated.” Legal educators need to be willing to experiment with new approaches and embrace opportunity for change.

Stanford Lands $7.2 Million Federal Grant to Support Afghan Legal Education

The National Law Journal

The US State Department awarded Stanford Law School’s Afghanistan Legal Education Project $7.2 million to assist in the creation of a law degree program in Afghanistan. The student-led Afghanistan Legal Education Project began in 2007 and has produced textbooks for Afghan law students and assisted in the development of certificate program in legal studies at the American University of Afghanistan in Kabul. The grant money will be used to create a five-year BA/LLB program at the same university. The grant signals an expansion in legal education in Afghanistan as well as a small but significant step in mending US-Afghan relations.

Law Schools Increase Recruitment amidst Dropping Applications

LJWorld.com

For the second straight year of declines, the number of people applying for law school admission fell by 13.7% in 2012. Nonetheless, the Kansas University School of Law announced earlier this month that it recorded a 19% increase in applications. Much of Kansas’s success can be attributed to their increase in out-of-state recruitment and a new campaign called “Change the Conversation.” The campaign involves informing potential students that a law degree does not have to lead to a traditional career such as an attorney for a law firm, and there are career paths with government, corporations, or nonprofit groups.

Economics of a Law School Education

New York Times

According to Professor Steven Davidoff of the Ohio State University Moritz College of Law, the type of law school reforms that best prepare students for the real world, such as smaller class sizes with practitioner-instructors, may actually increase costs. Reducing salaries of law school faculty would help bring down costs, but may end up reducing the quality of legal education, since highly qualified candidates with law review leadership or Supreme Court clerkship experience will likely be wooed to firms offering large signing bonuses for those sought-after credentials. Acknowledging the “qualitative difference between the top 15 law schools and the rest,” Davidoff addresses the idea that law school is a good long-term investment, pointing to statistics indicating that “the average lawyer will earn about $4 million—or twice as much as someone with a bachelor’s degree—over their lifetime of employment.”

Public Interest Lawyering

Lippman Unveils Rule Detailing Bar Admission Pro Bono Mandate

New York Law Journal and
New York Times

Chief Judge Jonathan Lippman unveiled a new 50-hour pro bono requirement for applicants to the New York bar. While current third year law students are exempt, first and second year students will have 34 months to fulfill the requirement. Hoping the mandate will “set the pace in the country,” Judge Lippman feels the change “makes sense, for new lawyers, for the profession as a whole, for the legal services providers, for the judges.” In order to qualify, the service hours must be law-related and within a variety on non-profit settings, including school clinics, government clerkships, and public interest groups.

Training Young Lawyers in Asia to Defend the Poor and Powerless

Christian Science Monitor

Bruce Lasky, a lawyer originally from New York, founded Bridges Across Borders Southeast Asia Community Legal Education Initiative (BABSEA CLE) 10 years ago to train young lawyers across the Asia-Pacific region to defend the poor. While law schools in Southeast Asia place little emphasis on helping the less fortunate, Lasky’s organization has worked with over 40 universities in nine countries to develop programs to teach lawyers the need for their services in at-risk communities. The group takes a neutral stance on politics to avoid conflict. Lasky tends to work within existing power structures instead of relying on donors with explicit human rights agendas.

Program Notes

Case Development Initiative: New Publication

The Case Development Initiative has released a new case series, Workers’ Rights in the Hudson Valley (A) & (B). The case series details the career path of two non-profit lawyers as they consider which organizational platform would allow them to have the greatest impact in the farm worker community in upstate New York. It highlights the challenges faced by lawyers in the public service sector as they adapt to the constrained resources that public interest law generally involves, reconcile personal and institutional values and objectives, and reflect on the opportunities and dilemmas posed by different options in diverse employment settings. Could a two-lawyer team successfully break out of an already-established organization to provide higher quality services, while at the same time obtaining funding and building the organizational infrastructure? The case allows participants to reflect on what is involved in starting up a legal organization from scratch—including the crucial foundational questions about funding, management, and strategic direction. The case is available for purchase at the Case Development Initiative website.

Executive Education: Emerging Leaders in Law Firms

Harvard Law School Executive Education will host Emerging Leaders in Law Firms, an intensive, five-day program specially developed for attorneys who have entered equity partnership within the past two years. As partners, this group of lawyers is taking on larger managerial responsibilities and is expected to exert greater leadership. The program offers them leadership and managerial perspective and skills to transition to partnership successfully. The program will be held at Harvard Law School from March 10 – 15, 2013. To learn more, visit the Executive Education website.

Executive Education: Leadership in Law Firms

Our flagship program, Leadership in Law Firms, offers law firm leaders insights into the challenges they face, and provides concepts and skills to be effective leaders. Participants in previous cohorts of our programs have been leaders of highly regarded law firms from around the world, holding executive positions such as senior partner, managing partner, chairman, practice group head, and office head. The program will be offered twice in 2013 at Harvard Law School, May 19 – 24 and September 8 – 13. For information please visit the Executive Education website.

Editor: Daniel L. Ambrosini
Managing Editor: Nicola Seaholm
Contributing Editors: Nathan Cleveland, Rachel Gibson, Nicholas Haas, Hakim Lakhdar, Pavan Mamidi, Mihaela Papa, Erik Ramanathan

Legal Education

Law Students Battle Increased Competition for Big-Law Summer Jobs

Wall Street Journal

According to the Wall Street Journal, fewer students are getting the positions they want through traditional channels. Among law school graduates from the class of 2008, 41% worked in a large law firm (one with more than 100 lawyers) one year after graduation; among the class of 2011, only 27% were employed by large firms. To compensate for the increased competition, many current 2Ls are getting creative by actively networking long before the traditional application season begins, paying their own way to travel to interviews, and seeking other alternative paths to the most prestigious and highly paid summer jobs.

Law School: Still a Good Investment for African Americans

The National Law Journal

Currently, only 4% of lawyers are African-American, and with the pool of prospective law students shrinking, this percentage could fall even farther. The rising cost of tuition, coupled with dwindling job prospects, are leading many to question whether entering law school is a wise choice. African-American students with few economic resources should focus their school search on programs that offer merit-based and need-based financial aid, according to the National Law Journal. If such students can keep their costs of living relatively low, obtain financial aid, and look beyond practicing law post-graduation, the costs of attending law school may be worth it.

Best Law Schools for Bargain Hunters

Wall Street Journal Law Blog

The National Jurist has compiled a ranking of law schools based on their value to students using metrics such as tuition, bar passage rate, and employment rate. The University of Alabama placed in first with tuition at $18,030, a bar passage rate of 95.5% and a weighted employment rate of 90%. Georgia State University came in second, followed by Louisiana State University, University of Nebraska, and University of Georgia. Due to high tuition rates, many Ivy League law schools did not make it onto the list, despite high weighted employment rates.

More Promotional Mailings Don’t Lead to Higher Law School Rankings

Wall Street Journal Law Blog

Law schools aim to improve their standings in the US News & World Report by producing expensive promotional materials such as magazines, postcards, and letters. But “most of this stuff is not making a difference,” according to Larry Cunningham, the author of a new study and associate dean for student services at St. John’s University School of Law. Although law schools that send promotional materials are more likely to be ranked higher than schools that do not, the number of pieces sent does not have a significant impact on overall rankings.

Globalization

Foreign Law Firms Seek Access to Lucrative Singapore Law Market

JD Journal 

Foreign law firms are lining up to apply for licenses that would allow them to practice Singapore corporate law and hire local lawyers. Singapore’s law ministry grants licenses for Qualifying Foreign Law Practice depending on the quality of applications. Without the license, foreign law firms can advise on Singapore corporate law only through joint ventures or refer clients to local lawyers or law firms. The benefits to getting a license appear significant: while mergers and acquisitions fell in Europe and the US, Singapore saw a 25% increase. Many of the foreign law firms that received licenses in Singapore back in 2008 have already doubled their revenues in the country.

European Firm’s US Office to Provide European Counsel

The Silicon Valley/San Jose Business Journal

A European law firm, Field Fisher Waterhouse, focused on IP and technology has opened its first US office in Palo Alto, California. The firm’s new US managing partner, Phil Lee, will spearhead generating business in the US and the firm will focus on advising Silicon Valley clients on European matters. With previously acquired clients in the US and many other future clients doing business in Europe, Field Fisher Waterhouse will be liaising with clients from the US with their European counterparts.

Landmark Case for Indian Arbitration Overruled

Legally India

The 2002 landmark case Bhatia International v Bulk Trading SA & Anr held that Indian courts had exclusive jurisdiction to test the validity of an arbitral award made in India even when the appropriate law of the contract is from another country. The constitutional bench heard the appeal of Bharat Aluminium Company against Kaiser Aluminium Technical Services—the test case relating to Bhatia International, where Bharat Aluminium Company argued that the seat of arbitration was not the basis on which the jurisdiction of the courts were defined under the Indian Arbitration Act. The Supreme Court has overruled the doctrine underlying the Bhatia case with the court stating that part 1 of the Arbitration Act does not apply to international arbitration and that the seat of arbitration will determine jurisdiction of the court.

US Firm Secures Strategic Paris Merger

The Wall Street Journal Blog and The Lawyer

Law firms from the US continue to expand globally, as DLA Piper has merged with a small French boutique firm located in Paris. The 26-person French firm provides a base for operations and work located in neighboring North Africa, Middle East, neighboring European countries and even Asia. The firm described the merger as “an illustration of DLA Piper’s commitment to expand its presence in the key global markets [which] is representative of its strategy to add quality and credibility in the G20 economies.”

Russian Legal Battles Mean British Pay Day

The Guardian

Thanks in a large part to new Russian business, combined profits at London’s top 100 law firms increased 8% last year, to £5.4bn. The legal battle between Roman Ambramovich and exiled oligarch Boris Berezovsky is expected to carry legal fees of over £100m. And there is more to come; in a few weeks, the High Court will hear a case between Russian billionaire Oleg Deripaska and Uzbek-born businessman Michael Cherney. Russians typically prefer to have their cases heard in the UK, which is thought to have “a fair playing field and…very good judges and lawyers,” according to Mark McAteer, national editor of Legal Business magazine.

Law Firms & Practice Management

New Report on Law Firm Information Governance

Law.com

Iron Mountain has released a 52-page report for the broader legal community on Law Firm Information Governance Framework “as a catalyst for strategic discussions at your firm on how to build an information governance program that fits your needs.” The report aims to help lawyers meet their professional obligation on how to handle client information. According to Rudy Moliere, director of information governance and records management at White & Case, “There are so many different definitions for information governance out there, but none that were very specific to a law firm environment” and “…[t]his will provide them with a road map.”

Some Former Dewey Partners Agree to Settlement Deal

New York Times

About half of Dewey & LeBoeuf’s former partners have signed an early settlement and will pay back more than $60 million of their 2011-12 compensation towards the more than $300 million owed to Dewey’s creditors. The amount of money to be returned to the estate by each former partner is “tied to their compensation [and ranges] from a minimum of $5,000 for retired partners to $3.5 million from the firm’s highest paid lawyers.” A group of retired partners has refused to sign on and others are calling for an impartial review of the situation in order to place more financial responsibility on the firm leadership at the time of the downfall. The bankruptcy team is also seeking $200 million from outstanding client bills.

Half of Washington State’s Lawyers Want Out of the Profession 

Puget Sound Business Journal

Thousands of Washington State’s attorneys are leaving the profession faster than they are replaced for both demographic and economic reasons. The Washington State Bar Association’s (WSBA) survey found that almost a quarter of the state’s practicing attorneys are considering retirement within five years; 32% are considering whether to leave the profession or cut back on their practice during the same period; and, between 2007 and 2011 there has been a 13% drop in the annual number of attorneys admitted to the state bar. This succession-planning crisis is a result of several factors including declining law school enrollments, attractive opportunities in the internet sector, and increasing desire for work-life balance. To facilitate the succession, the WSBA is creating a clearinghouse that matches older attorneys with young lawyers who are looking for entry-level positions.

Australian Law Firms Still Prefer Paper over Electronic Documents

IDM

A new study commissioned by Fuji Xerox Australia, and conducted by market research firm Colmar Brunton, finds that although 38% of legal professionals work remotely at least once a week, 80% of firms print some or all electronically received documents. While 43% report “force of habit” as the reason for the continued printing of electronic documents, 42% cite “legal requirements” and 31% cite “easier access.” Researchers interviewed representatives from more than 100 Australian law firms with 300 or fewer employees. According to Fuji Xerox Australia marketing programs manager Elizabeth Leslie, although more firms are embracing technology and mobile working, growth is hampered by “several significant challenges, including the continuing dominance of printed documents and a lack of integration between home, work and mobile devices.”

Attorney Regulation & Ethics

Foreign Lawyers Gaining Increased Freedom to Practice in US

The ABA Journal

The ABA’s Commission on Ethics 20/20 is drafting recommendations that would make it easier for foreign lawyers to practice in US jurisdictions. By October 2012, a decision will be made on section 5.5(d) of the ABA’s Model Rules of Professional Conduct on the issue of allowing foreign lawyers to provide legal services in the US. For example, this may allow state courts to admit a foreign lawyer to act as co-counsel with an in-state lawyer, or to serve in an advisory role in a particular proceeding. According to the draft report, “It is clear that as communications and commerce have become increasingly globalized so too have clients, their families, businesses, and other assets.”

Lawyers Fees at $35,000 per Hour

Wall Street Journal Law Blog

The Delaware Court of Chancery ruled 4-1 to preserve a lower court decision by awarding two plaintiff law firms one of the largest attorney fee awards in the history of shareholder derivative suits—$300 million. The fees were for legal work on a mining case where attorneys were awarded 15% of a $2 billion judgment. Lawyers from the opposing law firm argued that Chancellor Strine of the lower court abused his discretion by awarding fees that amounted to $35,000 per hour. Justice Holland wrote, however, “The challenge of quantifying fee awards is entrusted to the trial judge and will not be disturbed on appeal in the absence of capriciousness or factual findings that are clearly wrong.”

Canadian Firms Test Ad Restrictions with New Marketing Campaign

The Globe and Mail

The Personal Injury Alliance is a group of Ontario law firms who have joined a growing international trend to release new advertisement campaigns that feature high-quality television, radio, and online platforms. Some have found the degree of emotion in the advertisements controversial. One advertisement, for example, features the emotional story of a woman who credits her lawyers with helping her achieve a productive life after a spinal cord injury. The alliance believes that although the advertisements contain emotional content, they comply with the Law Society of Upper Canada’s advertising rules prohibiting “qualitative superiority to other lawyers” or testimonials “which contain emotional appeal.”

Corporate Counsel

Increase in Requests for Proposals from In-House Law Departments

Law.com

In-house law departments are formalizing their methods to identify, vet, and engage outside counsel in order to compete for corporate business. A recent LexisNexis RFP Activity Survey of 185 different law firms found that 42% have seen an increase in RFPs from in-house law departments this year. Both small and large law firms find the proposals time-consuming and the return on investment uncertain. The largest law firms in the survey dedicated 4,800 hours to law department proposals per year. As the GC’s approach becomes increasingly commodity-driven, some observers are concerned that law departments are using the process to shop for ideas and keep their existing firms from becoming complacent.

Diversity

UNC Study Examines Benefits of Law School Diversity

JDJournal

A new study, conducted over a 10-year period at UNC-Chapel Hill, has found evidence that a diverse student body offers numerous advantages to law schools. Participants were tracked from their enrollment to law school through to graduation with data taken from across 50 ABA accredited law schools. Researchers “identified race/ethnicity as a significant factor associated with differences of sociopolitical attitudes, experiences, discrimination histories, behaviors during law school, and professional aspirations.” The results of the study will be published in Rutgers Race & the Law Review.

Canadian Law Schools Reach Out For Diversity

Brandon Sun

Universities across Canada are taking a variety of steps to boost diversity among their law students. The University of Toronto, for instance, is currently offering free LSAT courses to low income students, attempting to remove a financial hurdle to law school admissions. Similarly, the University of Victoria has opened up twenty-five spots per year for students from indigenous or diverse backgrounds. Discussing the program, law dean Donna Greschner called her school’s approach to diversity “a holistic one. [We’re] not just looking at academics but what life experience do they bring? Have they overcome a challenge in their life?”

Energizing the Legal Diversity Movement

Corporate Counsel

Three years ago, General Mills GC Roderick Palmore was a founding member of the Leadership Council on Legal Diversity (LCLD), an organization aimed at getting GCs and law firm managing partners together to talk about and strategize on increasing diversity in the profession. As president of LCLD, Palmore has seen membership grow from 19 firms and legal departments to 209 today and has overseen the launch of several successful initiatives, especially the LCLD Fellows program designed to mentor high-performing minority attorneys. Palmore cautions against “diversity fatigue in the decades-long struggle” for greater minority inclusion and promotion.

Microsoft General Counsel Discusses Efforts to Increase Diversity in the Profession

Law.Com

In the context of the recent Leadership Council on Legal Diversity regional meeting in San Francisco, Brad Smith, GC of Microsoft Corporation and the chair of the organization’s pipeline committee discussed the council’s and Microsoft’s efforts to improve diversity. The council has over 200 members—law firms and companies seeking to build a pipeline that will make law firms as diverse as the nation’s graduates by informing college students about opportunities for a legal career and coaching them on how to apply to law school and by matching practicing lawyers with diverse law students for mentoring. Microsoft also pays their outside counsel a diversity bonus that is equal to 2% of the fees they charge if they make quantifiable progress in diversity either in population or number of diverse representatives working on their behalf.

Work-Life Balance of Top Concern for Law Firm Employers and Employees

Inside Counsel

According to a 2008 survey with New York University Law School students, the number one priority was work-life balance. Recently, the Minority Corporate Counsel Association held a conference in New York to address the challenges of creating work-life balance for employers and employees. Although 40-50% of law school classes are female, only 15% of equity partners in law firms and 18% of top legal positions within corporations are held by females. For some, going in-house may seem to escape the billable hour but presents other challenges such as triaging emergencies. Some law firms have started to implement written work-life balance policies that apply to all lawyers in the firm.

Innovation & New Models

Law Students Study as ‘Virtual Apprentices’

US News and World Report

Students earning their JD are increasingly utilizing LawMeets.com, a website offering “virtual apprenticeships” created by Drexel University’s Earle Mack School of Law Professor Karl Okamoto. Students watch videos of fictional client scenarios and upload three-minute video responses. Website users vote on the most effective responses, with the ten most popular responses receiving critiques from legal experts. As transactional law becomes more prevalent, professors are interested in using the site to help their students gain hands-on experience in client interactions.

New Service Connects Small Firms with Part-Time Lawyers

The ABA Journal

A Maine lawyer, Nicole Bradick, founded Custom Counsel in January 2012 to provide small law firms who need the help with access to lawyers who are available for contract assignments. Although the service originated from a mother’s need to establish work-life balance, not all Custom Counsel’s part-time lawyers are parents. The lawyers often work between 10 and 30 hours a week and their pay averages $100 per hour to conduct research and writing and/or appear in court.

Cloud-Based Services and Rules of Professional Conduct

Wisconsin Lawyer

The American Bar Association’s (ABA) Model Rules of Professional Conduct and state ethics rules were drafted at a time when the Internet did not exist, and may no longer provide adequate guidelines on the confidentiality and privacy issues that arise due to cloud computing in legal practice management. While storing a document on Dropbox can help a lawyer access it anywhere, making it a more efficient way of accessing, storing, and exchanging data, it continues to raise ethical questions of how to manage risks of unauthorized access and third-party storage locations.

E-Discovery’s Unresolved Questions

Corporate Counsel

Social networks, cloud services, and portable devices are likely to have an impact on e-discovery and pose complex legal challenges in the future. Social media such as Facebook and Twitter are storehouses of information on members who use these media. Extraction, collation, and usability of information obtained from such media are fraught with problems because they may not meet criteria of admissibility in courts. Similarly, information stored in the cloud suffers closely related problems. The question of who owns information stored or transmitted from portable personal devices, such as personal computers, tablets, and smart-phones poses a third unresolved challenge for lawyers.

Professional Development

Training Lawyers with Business Skills

The Lawyer

Recognizing that changes in the legal market have made it necessary for lawyers to act as business consultants in addition to legal advisors, some law firms have started to require MBA courses for their lawyers. Simmons & Simmons recently decided to change its MBA in Legal Business course from voluntary to compulsory for all of its trainees, citing higher qualification scores for trainees who had taken the course when it was voluntary. Not everyone agrees that business courses are necessary early in one’s legal career. Other law firms offer similar MBA courses for their associates and high-level managers.

Mid-Level Associates and Happiness

The American Lawyer

According to the American Lawyer’s annual associate’s survey, midlevel associates in the country’s biggest law firms are happy with their jobs. The survey asks associates to rank their firms on a scale of 1 to 5 in twelve areas related to job satisfaction, including interest of work, training, and partner relations. Results reveal that, among other things, firms are making more efforts to be transparent regarding compensation and advancement, to provide alternative work schedules and options, and to create mentorship opportunities for younger attorneys.

Globalization

A Feud among China’s Arbitral Institutions Increases Uncertainty for Stakeholders

Reuters

China’s main arbitration body China International Economic and Trade Arbitration Commission (CIETAC) suspended its branches in Shanghai and Shenzhen because they refused to comply with new rules stipulating that all arbitrations had to be administered by the central Beijing commission unless contracts explicitly stated an alternative venue. Shanghai and Shenzhen branches tried to preserve their independence, but this move means that investors such as private equity funds are uncertain about the validity of existing contracts supporting their investments. They may need to change the contracts or be drawn into highly public court battles; and CIETAC may lose, as legal advisors will encourage clients to seek alternative commissions that promise greater certainty.

Israel Liberalizes Legal Market, but No Consensus on How Global Firms Will React

The Lawyer

In May of this year, Israel’s finance minister signed into law a directive that decreased regulation in the Israeli legal market. Before the new directive came into effect, foreign lawyers could only perform business development roles in Israel; now they can practice foreign law on-site, hire Israeli lawyers, and merge with Israeli firms. Because competition is so high in the Israeli market, billing rates are relatively low and bureaucracy is still a significant barrier.

Australian Law Firms are Becoming LPO-Friendly

Lawyers Weekly

Globalization of the Australian legal market appears to be making law firms in the country more receptive to legal process outsourcing. The chief operating officer of Legal Resources, Clare Matthews, stated that the growing demand for LPOs led her company to re-enter the Australian market. When the company was established in 2007, local firms were unreceptive. A combination of UK and US law firms’ treatment of LPOs as “the norm,” in-house counsel experience with savings through LPO use, and watershed events like King & Wood Mallesons public signing of a contract with an LPO provider in October 2011 have changed Australian views of LPOs.

Scotland Tries to Lure London-based Firms to Open Legal Support Service Center

The Lawyer

Scottish Development International (SDI), Scotland’s international economic development arm, is trying to seize on an initiative that has worked in Northern Ireland to attract top London-based law firms to the country in return for public funding and lower operating costs. SDI hopes to lure law firms, legal process outsourcing providers, corporations, and banks with large in-house counsel—with savings of 20-40% on each employee.

Legal Education

Declining Number of Law School Applicants and Increased Scholarships

The Wall Street Journal

Due to the declining number and quality of applicants at law schools, some are resorting to negotiating scholarships, flexible application deadlines, and offering additional “perks” in order to fill their seats. Potential students now have unprecedented power in negotiating the cost of their education as law schools scramble to attract a shrinking pool of highly qualified applicants. The University of California at Los Angeles, for example, actively encouraged admitted applicants to negotiate their tuition rates in a March 2012 letter, which states, “We very much hope you find this offer competitive with others you have received.” Scholarships have nearly tripled in the past ten years as law schools struggle to adapt to the changing economy and job market.

Qatar Partners with HLS on Legal Education

The National Law Journal

With the growth of commerce in Qatar and United Arab Emirates, there is a need for a more robust legal education curriculum for young Arab lawyers. Harvard Law School’s Institute for Global Law and Policy has formed a partnership with the Qatar Foundation to help start a graduate law school in Doha and strengthen legal education in the region. Professor David Kennedy at Harvard Law School stated, “It’s an honor to have been asked to help advise the Qatar Foundation as it develops its plans to build a world class law school in Qatar.”

ABA Focuses on US Legal Education, Not Accreditation of Foreign Law Schools

The ABA Journal

There has been conversation recently at the ABA about whether to begin accrediting “American” law schools beyond US borders. At the ABA’s annual meeting in Chicago earlier this month, the Section of Legal Education and Admissions to the Bar voted nearly unanimously to not pursue the idea of accrediting foreign law schools at this time. Many section members and shareholders felt that during this time of significant change in the US legal education system, and the difficulty of maintaining standards abroad, resources would be better served on domestic legal education.

University of Illinois Law School Fined for Publishing False Data

Wall Street Journal

The University of Illinois Law School will pay a $250,000 fine and public censuring by the ABA for allegedly publishing false admissions data. Following months of investigations, the ABA detected errors in LSAT and GPA statistics for entering law school classes. These statistics are critical for college rankings. The ABA said the problem arose because the law school did not give importance to the connection between “setting aggressive recruiting goals” and giving authority to a single individual “who stood to benefit from meeting those goals and the publication of false data.” In 2011, the ABA censured Villanova University School of Law for misrepresenting data but did not impose a fine.

Starting Salary for Law School Graduates Hits Record Low

The Association for Legal Career Professionals

The National Association for Law Placement (NALP) Employment Report and Salary Survey reveals that the salaries of the Class of 2011 fell by 5% from 2010 and 17% from 2009. Less than 50% of graduates obtained jobs in law firms. According to the report, the national median salary at law firms was $85,000 in 2011, compared with $104,000 the year earlier. According to NALP’s executive director, James Leipold, “we are starting to see a measurable impact from lower paying non-partnership track lawyer jobs at large law firms.”

Lawsuit Dismissed Against Cooley for Misrepresentation of Job Placement

Wall Street Journal Law Blog

According to the Wall Street Journal Law Blog, a Michigan court has dismissed a lawsuit by students from Cooley Law School against their alma mater for misrepresenting job placement statistics. The Cooley law graduates were seeking $250 million in damages. According to Judge Gordon Quist, the case was dismissed in part because a legal degree is not protected under Michigan’s Consumer Protection Act. The decision follows another dismissal of an earlier lawsuit by former graduates of New York Law School against their alma mater.

Recent Law Graduates Skeptical of New Yale Law PhD

US News

According to US News, recent law school graduates are skeptical of the benefits and practicality of Yale’s new PhD in law, aimed at individuals who already hold a JD from an American institution seeking faculty positions. Citing the current job market in legal academia, some recent graduates wonder if pursuing the professorial track is a wise decision. Dean Robert Post of Yale Law School, believes the new PhD program will enable would-be-professors ample time and support to strengthen their resumes before pursuing faculty positions. Law professors usually have a JD and a PhD in another subject, such as history. “We’re reclaiming law as a discipline,” says Post.

Study Seeks to Measure Intellectual Excitement of Law School Faculties

Wall Street Journal Law Blog

A recent study published by the University of St. Thomas School of Law ranked the scholarly impact of the top third of American law schools by calculating the mean and median of total law journal citations by tenured faculty over the last five years. Harvard ranked second in the “Scholarly Impact Score,” trailing Yale but surpassing Chicago, Stanford, and New York University. Gregory Sisk, co-author of the study, said the new measure could be important to prospective students as it measures “whether there’s an intellectual excitement” in the faculty.

Corporate Counsel

2012 GC Compensation Survey Results Indicate Declining Pay, Increased Scrutiny

The American Lawyer

The latest edition of Corporate Counsel’s annual survey on GC compensation reveals a general trend of declining pay across the board. According to the results, every component of pay that was measured declined from the previous year—in some cases by double-digits. The report cites a number of potential factors including the economy, poor share performance, and increased shareholder scrutiny. According to Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, the issue is one of supply and demand, where the greater supply of lawyers willing to fill GC positions the more pay will be driven down.

Law Firms & Practice Management

Revolving Door Lawyers between SEC and Law Firms Don’t Compromise Enforcement

New York Times

A question is often raised about whether lawyers revolving between government positions and the private sector may create networks that lead to conflicts of interests and influence peddling. Based on data gathered from the career paths of 336 Securities Exchange Commission (SEC) lawyers involved in 284 SEC enforcement actions between 1990 and 2007, it was found that revolving-door lawyers who went from SEC to private law firms produced “more aggressive enforcement outcomes” while they were still at SEC than lawyers who never left the SEC. There was no evidence that law firms who hire SEC alumni can obtain more lenient enforcement outcomes from the agency.

Infographic Shows Legal Industry Trends

Wall Street Journal Law Blog

The telephone answering services company TelAssistant recently published an infographic that illustrates trends in the legal industry, specifically, the problem of lawyer oversupply and industry reactions to that problem. In 2012, only 27,639 of the 43,979 law school graduates gained employment. The graphic was created using publicly available data and shows nearly a five-fold increase in the number of law graduates from 1963 (9,638) to 2010 (44,004). The four major trends reshaping the legal industry are globalization, alternative legal service providers, virtual law firms, and legal process outsourcing.

Lawyers Fall for Email Scam

Wall Street Journal

Small to mid-sized law firms that work to solicit new business over the internet are the target for a common email scam in which foreign clients contact an attorney for assistance with claiming a legal settlement or insurance payout in the US. A check is mailed to the lawyers who “deposit [it] into the firm’s trust account … subtract their fee and then wire the balance to an overseas bank account, before the firm’s bank realizes the check is a fake or can stop the wire transfer.” The elaborately forged checks are often accompanied by corroborating settlement documents, creating a false sense of authenticity. According to US Postal Inspector Louis Di Rienzo, an estimated $70 million has been stolen from law firms by way of this fraud since 2009.

Attorney Regulation & Ethics

ABA to Consider Ethics Rule Change to Help Young Lawyers

ABA Journal

The ABA Commission on Ethics 20/20 has proposed a series of changes to the ABA Model Rules of Professional Conduct to better serve the needs of young lawyers in today’s job market. Most significant is a proposal to allow lawyers to move jurisdictions without retaking the bar exam if they have actively practiced for only three of the last five years. Another proposal would allow lawyers to practice in a new jurisdiction for up to a year while seeking admission to the bar. Other proposals seek to adapt current rules to account for the increasing impact of technology in communicating with prospective clients.

Court Considers Lawyers’ Ability to Pay Sanctions for Litigation Misconduct

The Recorder

The US Court of Appeals for the Ninth Circuit overturned a lower court decision that a lawyer must pay $360,000 in sanctions for litigation misconduct because he could not afford to pay. The lawyer was a solo practitioner with no assets, earning $20,000 a year. Judge Reinhardt of the Ninth Circuit stated, “Imposing sanctions in an amount many times greater than the attorney will ever be able to pay may in some instances represent only a futile gesture that does little either to compensate victims or to deter future violators.” The Court of Appeals’ decision turned on the interpretation of the statute that attorneys “may”—not “shall” or “must”—be required to pay sanctions.

Diversity

Top UK Law Firms Improve Maternity Leave Policies

Legal Week

The issue of maternity leave has traditionally been a hurdle for female lawyers seeking to progress in their careers. Many top UK law firms are now offering generous packages to non-partner level lawyers. The packages include monetary benefits (Linklaters has one of the most generous policies), return to work bonuses (at Eversheds and Freshfields), and other incentives like emergency childcare or flexible working hours. The impression that women should wait until they make partner before having children is becoming outdated, and some firms are implementing programs to ensure female lawyers return to work.

Data Indicates Regional Growth of Minority Partners

The Legal Whiteboard

According to data published by the National Association for Law Placement (NALP) in their July 2012 Bulletin, in certain large and important markets diverse lawyers are ascending to partnership in significant numbers. The aggregate-level statistics do not paint a rosy picture of partner diversity as a whole, as less than 5% of partners at the firms were minorities. When disaggregated though, data indicated that specific geographic markets are showing substantial minority partnership growth. African-Americans saw strong gains in Atlanta and Washington DC; Asians were prevalent in Los Angeles, San Francisco, and the Pacific Northwest; and Hispanics showed encouraging growth in Houston, Dallas, Miami, and Los Angeles.

InterLaw Survey Highlights Disconnect on Perceptions of Diversity

The Lawyer

Based on a recent InterLaw diversity survey, 86% of legal professionals (lawyers and non-lawyers) feel their firms have well publicized and effective diversity strategies but the firms’ programs are not having the desired effects. Only 73% of male lawyers and 63% of female lawyers believe these policies are effective. Based on their findings, the authors of the survey recommend creating financial incentives for diversity targets and penalties if firms fall short of their goals. According to the data, 41% of female lawyers believe their pay is less when compared to others on the same pay scale with the same responsibilities.

Innovation & New Models

Law Firms Interaction and Collaboration in the Layout of Offices

Wall Street Journal

As law firms renovate thier offices, many are leaving behind the old model of private corner offices and large law libraries in favor of smaller, sometimes shared offices, large glass walls, and hi-tech conference spaces. With an increased emphasis on collaboration and teamwork, many law firms have designed common spaces such as coffee bars, cafeterias, and meeting rooms equipped with videoconferencing and other telecommunications technology. At Holland & Knight’s Washington office, for example, individual offices were moved into the center of the building while “lounge-like” team spaces were shifted to the corners. Other firms have switched to open plan models. These changes reduce rent costs—which can be as high as $1 to $2 million a month for large urban offices—while also encouraging partners, associates, and staff to work more closely together.

Bi-Lingual Attorney-Translators Performing Document Review

Wall Street Journal

Although an overcrowded legal market has made it difficult for many law school graduates to find permanent employment, the globalizing economy has led to the creation of opportunities for lawyers with translation skills. Since law firms generally do not retain a large number of multi-lingual lawyers, demand has increased for contract attorneys with the ability to review documents in foreign languages such as Chinese and Korean. Staffing agencies specializing in translation and document review, such as TransPerfect Legal Solutions, charge firms $75 to $150 per hour for legal services while the contract attorneys earn $45 to $100 per hour based on their expertise.

Public Interest

Foreign Lawyers Not Allowed to Plead in Bangladeshi International Crimes Tribunal

Financial Express Bangladesh

The Bangladeshi International Crimes Tribunal (ICT) was established to investigate and administer justice regarding crimes committed during the Bangladeshi Liberation War of 1971. Despite the fact that ICT has an international title, it does not allow foreign or international lawyers to plead. When asked about opportunities for non-Bangladeshi lawyers, law minister Shafique Ahmed confirmed that only Bangladeshi lawyers could plead a case in any court of the country, and that there is no scope for engaging a foreign or international lawyer in the ICT.

Program Notes

New Case Study Series: Robinson & White

The Robinson & White cases raise the challenges faced by the leaders of a global law firm as they sought to mold the firm’s compensation system to align with the firm’s strategy of encouraging entrepreneurship as well as teamwork. The cases raise questions about the delicate balance between rewarding entrepreneurial “heavy hitters,” while also providing a culture where teamwork and collaboration are valued. They detail the process Robinson & White undertook to diagnose the issues related to the compensation system and to gain buy-in from partners to change the system. The cases are available for purchase online.

Legal Education

New Data Paints Dismal Picture of Law Market for Recent Graduates

Wall Street Journal

According to the Wall Street Journal, members of the law school class of 2011 had little better than a 50-50 (55%) chance of landing a full-time, long-term job (exceeding one year) as a lawyer within nine months of receiving a degree. Graduates’ chances of obtaining a job within that period were much more likely if they attended a top school: data shows that students from the top 14 schools had less difficulty landing jobs.

Pressure Mounts for US Law Schools to Adapt Curricula to Evolving Legal Profession

The ABA Journal

The ABA Section of Legal Education and Admissions to the Bar is preparing to release its most recent survey building on a 2002 study that examined changes in law school curricula from 1992 to 2002. The new survey extends from 2002 to 2010, and tracks those same changes in law schools. Preliminary results show that US law schools have increased their efforts to offer more clinical and professionalism programs while demanding that students focus more on pro bono work, improved legal writing and other “non-traditional” skills. The study found that 87% of ABA-approved law schools offered joint-degree programs in 2010.

New International Network of Law Schools Founded to Promote Global Discussion

National Law Journal

The Law Schools Global League represents the first formal, international network geared toward jump-starting legal teaching and research collaborations, according to the National Law Journal. Where law schools have traditionally focused on teaching exclusively national law, members hope that the league will operate as a forum for exploring projects of value to law students practicing in an increasingly global environment. Administrators from the 17 founding schools convened last month at Tilburg University in the Netherlands to form the group officially and hold a symposium on the globalization of law. The symposium focused largely on different approaches to legal education.

Yale Announces Nation’s First PhD in Law

National Law Journal

Yale Law School will offer the nation’s first PhD in Law to start in the fall of 2013. The degree is aimed at training individuals who already hold a JD from a US law school to become law professors. Approximately 10% of law professors currently teaching in the US received their legal education at Yale. Although other US law schools offer a PhD program that combines academic disciplines such as economics or social sciences, according to YLS Dean Robert Post, “[the degree] will offer a new, alternative route into a career in law teaching and legal scholarship.” Similar to many other schools, Yale offers a JSD and LLM degree but these are primarily targeted to students who received their basic legal education outside of the US.

Training Small Town Lawyers

Wall Street Journal

There has been a glut of lawyers and a slump in the legal industry since the 2008 financial crisis. The lure of small towns as target destinations to practice law is becoming more tangible given that jobs exist in small towns. Some Midwestern law schools are signaling to their students to look beyond high-paying, big-city law firms. The University of Nebraska’s law school has even created a special program of study that focuses on solo practice or working in small law firms. The shortage of lawyers in small towns in the Midwest has occurred because of educated young people fleeing to larger cities for cultural and financial opportunities.

Globalization

Foreign Lawyers May ‘Fly In, Fly Out’ of India

Wall Street Journal Law Blog

The Supreme Court of India has stated that while it weighs in on an appeal of a Madras High Court ruling, foreign lawyers visiting India are permitted to advise their clients on international laws although they still may not practice Indian law. The Madras High Court ruling from earlier this year states that “fly in, fly out” arrangements are permissible and that a ban would create “a manifestly absurd situation wherein only Indian citizens with Indian law degree[s]…could practice foreign law.” The Bar Counsel of India appealed the decision because of a conflict with a 2009 Bombay High Court Ruling that has been interpreted as a ban on foreign lawyers.

Legal Advice by Accounting Firms in India

Hindustantimes

A recent Supreme Court decision in India held that the expression “to practise the profession of law” under the Advocates Act, 1961 covers litigation and non-litigation matters that can be handled only by advocates. As a result, the Society of Indian Law Firms (SILF) has requested that major auditing firms in the country, including the big four—Ernst and Young, KPMG, PricewaterhouseCoopers and Deloitte—stop providing legal advice to their clients. According to Lalit Bhasin, president of SILF and managing partner of Bhasin & Co., Advocates, “In case the accounting firms including the foreign ones continue to provide legal advice to their clients, the government too must intervene.”

Foreign Firm Mergers Appear Unaffected by Changing Times, But for How Long?

The ABA Journal

A recent Hildebrandt Institute MergerWatch Report suggests that foreign law firm mergers are actually climbing steadily beyond those of US law firm mergers. Comparisons across the last three or four years indicate that US firm mergers have slowed down considerably, whereas foreign mergers have continued to develop, creating massive foreign law firms of more than 2,000 lawyers. Though the number of mergers continues to increase, the stability of new large law firms raises concern.

Corporate Counsel

Challenges of the General Counsel

Harvard Law Bulletin

The complex role of the GC in corporations has changed dramatically over the past 25 years. According to Alex Dimitrief, vice president and general counsel of GE Energy, “no two days are ever the same.” Benjamin W. Heineman Jr., distinguished senior fellow at Harvard’s Program on the Legal Profession (PLP) and former GC of General Electric states, “As you go up the chain, the skills you need extend far beyond being a technician in the law.” “The speed of things you’re doing has definitely accelerated,” states Laura Stein, Clorox’s senior vice president and general counsel, who adds, “when you’re hoping to manage risks and ensure compliance, the world moves very quickly these days.” Heineman and Professor David Wilkins, director of Harvard Law School’s PLP, will co-teach a new course this fall entitled, Challenges of the General Counsel, to help law students learn about the challenges and leadership opportunities facing GCs.

To In-House Law Departments, Corruption is “Mission Critical”

Wall Street Journal

A study by Laurence Simons and the Association of Corporate Counsel found that 29% of GCs in Africa, Europe, and the Middle East named bribery and corruption as “mission critical” in 2011, just behind commercial law at 65% and competition and IP law at 33%. The survey of 114 corporate legal departments found that “these were also areas that teams reported having strong expertise in-house as legal departments focus on managing the key risks and opportunities for their businesses,” according to Jim Merklinger, vice president and GC of the Association of Corporate Counsel.

Law Firms & Practice Management

Dewey & LeBoeuf Sued by Former Partner over ‘Ponzi Scheme’

New York Times & JD Supra

As legal profession pundits and bloggers debate the future of law firms’ business model through the lens of Dewey’s downfall, a former partner is suing the firm’s management team. Henry Bunsow claims that Dewey & LeBoeuf grossly exaggerated revenue, internally and to the media, and pressured partners to make capital investments that the firm never intended to repay. Bunsow describes the firm’s business model as a “Ponzi scheme,” and says that he was forced to invest a large sum of money into the firm as a condition of his employment; the investments were paid directly to current partners enriching the top managers and hiding “the dire condition of the firm from the public.” 

Merger with America’s Largest Consumer Bankruptcy Firm

San Francisco Chronicle

Jacoby & Meyers, LLC, America’s largest full service consumer law firm, and Macey Bankruptcy Law, PC, a Chicago based firm that represents consumer debtors in bankruptcy, have merged to combine their resources and strike strategic synergies in their operations across the US. With the merger, Jacoby & Meyers will have more than 135 offices with a much larger footprint in the country. The firm has been at the forefront of exploring alternative business structures by initiating legal action to allow non-lawyers to invest in law firms. While Washington, DC allows non-lawyer investments in law firms, it is banned in all 50 states.

Europe’s Economic Woes Hit UK Law Firms

Inside Counsel

According to a Reuters report, the troubled European economy is reflected in two of UK’s largest law firms, Linklaters and Freshfields, both reporting plateaus in revenues and a decrease in profits per partner (PPP) for the fiscal year end of 2011. Linklaters’ revenues rose by only 0.6% last year and the firm’s PPP fell by 3%; similarly, Freshfield’s revenue was down 0.7% and PPP were down by 1%. Smaller London-based firms Clifford Chance and Allen & Overy reported better financial results, which may be related to their aggressive expansion into new markets such as Casablanca, Istanbul, and Australia. Overall, however, “the more mature European markets have been pretty terrible this year,” stated Tony Williams, a former managing partner of Clifford Chance.

Survey of Alternative Fee Arrangements

Wall Street Blog

In a report by ALM Legal Intelligence sampling 141 in-house counsel and 194 law firms on alternative fee arrangements (AFA), it was found that most law firms continue to rely primarily on traditional billing arrangements. Just 6% of law firms said they used AFAs for more than half their legal work in 2011, and 12% use them to assign work to outside counsel. For legal departments, the three major benefits of using AFAs include cost/predictability, costs savings, and increased efficiency, whereas the benefits for law firms include attracting or maintaining clients, simplified billing and operations, and increased billing realization. Legal departments and law firms agree that the top three AFAs are flat fee; blended rated (all lawyers on a matter charge one agreed-upon hourly rate; and capped fee.

Innovation & New Models

Alternative Models of In-House Telecommuting

Law.com

In a 2012 National Study of Employers, 77% of companies polled in a survey either permit or encourage flextime in one’s schedule. Some legal departments are exploring alternative workspace options. American Express implemented a program, BlueWork, that offers telecommuting, flexible hours, and job-sharing. Employees can negotiate space with their managers through one of four models: “Hub” (dedicated workspace in office); “Club” (split time between offices); “Home Office” (primarily from home); or “Roam” (frequent traveling between offices or on the road). According to Todd Miller, vice president of general counsel office operations, “we believe that it’s less about where employees work here; it’s about the role they play in driving results and how work arrangements can best fit their working style and personal needs.”

Axiom Outsourcing and the Legal Services Market

American Lawyer

Axiom Global Inc. is changing the legal services market with its introduction of a new division to do legal outsourcing work, established in 2010.  The company calls the work “managed services” and the unit is growing quickly, representing 25% of the company’s revenue in 2011—up from 10% only a year earlier. The outsourcing unit is part of a greater development where clients are beginning to embrace nontraditional providers of legal services. Legal process outsourcers take on more of the low-end but at times profitable work that some AmLaw100 firms do such as document review assignments. However, Axiom is also attempting to provide solutions to some legal challenges that rise above document reviews.

Computers Will Find the Pin in the Haystack

Wall Street Journal

Predictive coding, a method by which large amounts of electronically stored data can be quickly searched and analyzed for pre-trial discovery, shows promise of cutting lawyers’ costs. Landow Aviation was faced with the task of sifting through two million electronic documents to examine evidence of possible liability when roofs of three jet hangers collapsed under heavy snow destroying 14 jet planes in Virginia. Loudon County Circuit Judge granted the aviation company permission to use “predictive coding” to make the task easier and less costly. Although predictive coding reduces the number of lawyers needed to analyze vast quantities of electronically stored data, it does not eliminate the involvement of lawyers.

Diversity

Power Appears to Play a Much Larger Role in Women’s Careers

Harvard Business Review Blog Network & ABA Journal

In a Harvard Business Review blog post and white paper, Lauren Stiller Rikleen and Linda Bray Chanow discuss how learning to navigate strategically through power situations in the workplace can help to improve the careers of many women. Power dynamics in the office provide opportunities not only to be successful but also to pursue power and influence in the workplace. The gender gap in the legal profession remains large due to the lack of comfort by many women to pursue certain power positions and instead accept the status quo within their firms, organizations, and corporations. “A necessary first step to building power is to understand the source of your discomfort with power so that you can address the discomfort and move beyond it,” states Rikleen.

Ethnic Diversity Provides Opportunity for Firms’ Self-Reflection

Opinion 250

A recent report addresses the growing concern that law firms in British Columbia lack a level of ethnic diversity that would be expected given its population. Although Aboriginal peoples represent only 1.5% of the legal profession, they represent 4.6% of the total population in the province. The Law Society of British Columbia is encouraging law firms to consider the local population and minority groups to ensure that minority lawyers are represented in law firms. Diversity can be increased by raising awareness of unconscious bias, developing and improving bias-free performance evaluations and work systems, promoting flexibility, and creating a culture of mentorship within the legal community.

Professional Development

How to Move into Law Late, and Why it Might be Worth it

Independent.co.uk

The best path to a successful career in law may not always begin with work in law. In England, some individuals sign up for a one-year full-time graduate diploma in law (GDL) before moving onto a legal practice course (LPC) taken by all solicitors. Many individuals who began their professional or academic careers outside of law, and chose to move into law only later, report that their prior work informs their work as lawyers now. According to Sarah Gale, deputy course director of the graduate diploma at the City Law School, City University London, “We also have doctors, engineers, surveyors or vets who are seeking a career change. If you’ve given up a career to return to education, your level of focus is extremely high.”

Attorney Regulation & Ethics

Law Firms at Risk for Cyberattacks

Wall Street Journal

Law-enforcement officials are seeing an increase in cyberattacks against law firms through various types of malware to access lawyers’ phone calls, text-messages, emails and other sensitive files. According to FBI veteran Shawn Henry, who now runs the security firm CrowdStrike Inc., theft of highly sensitive and confidential information is on the rise and underreported. The ABA is expected to address the issue of cyber security, specifically whether guidelines to protect clients’ information should be incorporated into the model rules of professional conduct. For now, security policies are left to law firms as they decide whether to use popular cloud services such as Dropbox while clients are demanding increased security.

Texas Takes on Barratry

Texas Tribune via New York Times

Barratry, or the incitement of litigation for harassment or profit, is on the rise in Texas according to Harris County prosecutor Wendy Baker. Texas lawmakers have attempted to slow the trend by passing a law that allows victims of barratry to sue lawyers who illegally solicit services. The action is targeted specifically at “ambulance chasers,” attorneys or case runners who offer legal services within 90 days of an accident, and other service providers such as chiropractors and telemarketers who work together to lure patients into frivolous law suits and insurance fraud by exaggerating injuries. The Texas Department of Insurance has hired two special prosecutors to enforce the new law.