In Cambridge, Lawyers Debate Future of Their Profession

April 10, 2015, 8:37 PM

“There is widespread agreement that the legal profession is in a period of stress and transition; its economic models are under duress; the concepts of its professional uniqueness are narrow and outdated; and, as a result, its ethical imperatives are weakened and their sources ill-defined.”

That’s the premise put forth in a paper that was presented at Harvard Law School’s Center on the Legal Profession conference on April 10.

Authored by former general counsel of the General Electric Corporation Benjamin W. Heineman, Jr., Wilmer Hale partner William F. Lee, and Harvard Law School Vice Dean of the Legal Profession David B. Wilkins, the paper contemplates lawyers’ ethical responsibilities and their role as the profession grows increasingly competitive.

“We all live in a period when economics are transforming the profession,” Heineman told several dozen firm leaders, general counsels, top professors and students who assembled at Harvard Law School, “but we should not let the economics transform the time-honored role of the lawyer as a wise counselor.”

Brad Karp, Chairman of Paul, Weiss, Rifkind, Wharton & Garrison and Kim Koopersmith, Chairperson of Akin Gump Strauss Hauer & Feld were both in the audience. (Comments from some of the participants are excerpted below.)

Globalization is a key force that the authors cite as changing the legal profession. But they also note that the growth of the legal profession – from around 250,000 U.S. lawyers in 1960 to more than one million today – has injected new competition into the profession.

Starting in the 1980s, the traditional relationship between law firms and corporations ruptured as corporations began building internal legal departments that took work in-house and away from outside counsel. By 2000, this trend had accelerated as globalization and increased pressure to cut legal costs spurred law departments to “unbundle” work, such as a class-action lawsuit, into its component parts, which were farmed out – not always to law firms, but sometimes to outsourcing companies and other organizations, according to the paper.

The authors argue that law firms responded to these changes by making more frequent lateral hires, rather than hiring straight from law school. This helped spawn a free agent market for lawyers, which was nurtured by a legal press that started reporting profit-per-partner figures for the first time. These pressures also infected law schools, where rising tuition costs and a tighter job market, caused deans to focus on teaching only “core” competencies demanded by employers, and not other skills that would make lawyers more well-rounded.

As a result, short term economic goals became more important.

“Can the next generation have a capacious vision of what it means to have the fullest life in the law?” Heineman asked those assembled.

Below are a few excerpts from the conversation that took place throughout the day, including during a breakout session at lunchtime focused exclusively on law firm economics.

Kim Koopersmith, Chairperson of Akin Gump Strauss Hauer & Feld: “The message of public service ... it’s in the fabric of our firm and yet if I were to go to some of the younger associates, and ask them if that’s what drew them to the firm, to the profession – I don’t think I’ve done a good job communicating that to them.”

“My perspective on having some hope, and I’m not generally a ‘glass-half full’ kind of gal, is we just engaged in a long term strategy session at our firm. The goal was really a business goal – to think beyond tomorrow. Where do we need to be? How can we deliver services better? What can we do to improve our relationships with clients? It overlaps [a lot] with some of the goals that are being articulated in terms of how to be better citizens.”

Bruce Kuhlik, Executive Vice President and General Counsel, of Merck:“I used to say I hire lawyers, not law firms. That was because I didn’t sense a stronger culture at the firms. When lawyers are moving from firm to firm, chasing dollars, I have to chase dollars. This is just a plea for a strengthening of firm cultures that could lead to fewer lateral moves and stronger closer ties with your clients.”

Brad Karp Chairman, Paul, Weiss, Rifkind, Wharton & Garrison : “ I graduated [from HLS] in 1984 and at that time, you did not join a law firm because it was economically successful. Beginning in 1987, when the American Lawyer first reported on law firms revenues, that has dramatically changed the way lawyers think about their firms. There’s a tremendous undue emphasis on achieving short term economic gain. Every year it seems that phenomenon becomes more acute.

“What really makes a law firm great? I’m not foolish. I’m not naive. Clearly, economic success is one of the things a great law firm should strive for, but it need not be an end all value.

“I would think the most important thing at any law firm in the world that really cares about these values is how you compensate your partners because that really drives all value. If you compensate your partners in an ‘eat what you kill’ manner, you’re going to create a very different firm than if you compensate in an lockstep manner, where everyone has a culture of collaboration, working together. The world now is trending much more toward ‘eat what you kill’ and that is a huge problem.

“In our system, we send a memo out every fall to all our partners asking them to write a 10-page memo outlining their contribution to the firm. Our compensation is pretty lockstep, everyone knows what everyone else makes.

Larry Thompson, former Executive Vice President, Government Affairs, General Counsel, Corporate Secretary, Pepsi : “We need more effective leaders...We have a professional responsibility, yes to serve our clients, but also a professional responsibility to make society better.”

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