Big Law Associates Deferred, but Getting Air Time.

Worth listening to.  

Compare and contrast that with this article, entitled "Law Firms Express ‘Growing Enthusiasm’ for Contract Lawyers."  In this article, it states:

This year, 10 percent of the firms plan to cut associates, 38 percent plan to reduce or discontinue hiring first-year associates, and 54 percent plan to shrink their summer programs.

At the same time, law firms are instead expressing a “growing enthusiasm” for a staffing alternative—contract lawyers, according to an Altman Weil press release. Last year, 39 percent of the law firms used contract lawyers. This year, 53 percent will or might do so, while 52 percent expect that contract lawyers will become a permanent part of their staffing plans.

Yes.  The connection is clear as June 21st is long.  Law Firms are capsizing and/or imploding.  The lawyers of today will be contract attorneys, working for 70 hours a week and no benefits.  I laugh when I hear young lemmings talk about the economy improving and how jobs will be available once that happens. It won't happen.  Law firms are on a permanent trek to finding a cheaper way to provide legal services and contract attorneys are the glaringly obvious solution.  And the contract attorneys of yesteryear, TTT and TT graduates, will be pushed out in favor of T14 contract attorneys.  If anyone from the ABA is reading this blog, I implore you to do something about this.  Our industry is sinking fast.  Does someone in the basement of BigLaw need to go postal on a firm to get the ABA to stop accrediting law schools?   They should be taking accreditation away from TTT sewer schools.  With every unemployed graduate put out in the market, the value of our work decreases to pennies on the dollar.  The ABA has the power to stop this madness.  UGH. I can't handle this type of news anymore.

Happy Tuesday.

Top Law School Grad Sells Movies and Music On-Line From Parent's Basement!

I love mainstream press covering the Black Death of the Legal Profession... but they are so late to the Party. I cannot say it enough, people that decide to go to law school in the next few years are total idiots. Idiots!

Fabian Ronisky thought he was on track last summer to become a high-powered corporate lawyer. He was an intern at a leading firm in Los Angeles, earning about $3,000 weekly. But the firm didn't offer him a permanent job.

So Mr. Ronisky, a 25-year-old student at Chicago's Northwestern University School of Law, spent the fall sending 50 resumes to law firms and government agencies, to no avail. Now, just days shy of graduation and with $150,000 of student loans, he plans to move back to his parents' home in San Diego and sell music and movies online.

I really feel for this guy, because he didn't know this was coming when he was a 1L. Now the mainstream press has jumped on the story that I could have covered 5 years ago.

Part of the problem is supply and demand. Law-school enrollment has held steady in recent years while law firms, judges, the government and other employers have drastically cut hiring in the economic downturn.

Large corporate law firms have been hit particularly hard. The nation's 100 highest-grossing corporate firms last year reported an average revenue decline of 3.4%, the first overall drop in more than 20 years, according to the May issue of The American Lawyer magazine.

I am wondering what the 3.4% decline in revenue would have been if they hadn't fired so many associates? Anyone venture to guess?


I think that the whole model has been screwed for many years. People/Lawyers have always focused on landing that big firm associate position right after law school. What no one ever talks about, and what was always true regardless of the economy, is that one's days are numbered when working for BigLaw. It's just a matter of time before it's obvious that MOST of the associates are not "Partner Material" and they have to go on their merry way to other pursuits. Many of these pursuits are not nearly as profitable as BigLaw--non-profits and government positions, mostly. So many of these BigLaw associates never see it coming either, so they live high on the horse and DO NOT make headway on their loans. They don't see the end of the tracks for the gravy train, and they have to downsize drastically when it stops. This is when things were good. The reason for all of this? There has always been an overabundance of attorneys--at least since the dot.com bubble burst and maybe before--so it's always been a wiser economic choice to hire in a new flock of attorneys than pay the older ones more.
So, that's reality in a nutshell.

You Are Not Alone: England Suffers Toooooooooooooooooo!

I've always been under the impression that the mainstream media in  England is a bit less partial than mainstream media in this country.  Especially during the election, and for the years that I followed the war, I would tune into BBC before Fox and CNN.  Actually, BBC was my home page for the longest time.  That being said, it's no surprise that this article was posted in a major English Newspaper--and I haven't seen anything nearly as honest and fact-filled in our papers.  Just as the British Tabloids are the first to expose the nasties on all the stars, I learned all sorts of dirty things about how legal outsourcing works.  I have to admit that I had NO IDEA that England was allowing for outsourcing to India as well.  There is no mention in the article, but I'd like to know when the British equivalent to the ABA agreed that outsourcing was a suitable alternative to hiring attorneys educated in England. I am really sorry that your ABA sold you out, my British readers. I thought ours was the lowest of the law--oops, LOW.  They must be happy to know that they have company down there in the lowest level of Dante's Inferno.

So, let's figure out what we are commiserating about.  In the article, I found out the following:

"...an army of young Indian graduates, most of them from the country’s top law and engineering schools, sits before a barrage of computer terminals. Many are working on legal documents digitally accessed from the servers of blue-chip Western clients via transcontinental fibreoptic cables. Others are engaged in research for upcoming litigation to be fought out in American courtrooms, or are analysing patent filings registered by British companies." [Emphasis added]

Wow.  So, until reading this, I had no idea that Indian lawyers could legally do anything aside from simple document review.  As it turns out, they are ready, willing and able to create legal documents, do legal research and, presumably, writing and patent law??!!!  So, why are doc reviewers the only ones that are up at arms?

I think that patent lawyers, general practitioners and transactional attorneys should join in on the march against legal outsourcing to India.  Will they be installing video telephones in courtrooms so that Indian Attorneys can make court appearances too????  This is the definition of a slippery slope and I can't say that any area of the law is safe any longer.

"Much of the work that Pangea3 and similar firms deal with, such as drafting derivatives contracts or conducting due diligence for mergers and acquisitions, was once the preserve of trainees and associates at big City law firms. Some of those firms racked up annual revenues of more than £1 billion during the boom years, in part by billing out teams of junior lawyers for up to £300 an hour for even the most routine tasks."  [Emphasis added].

As a side note, Pangea is owned by American Companies:
"The company's investors include Sequoia Capital, the same venture capital firm that once backed a little Silicon Valley upstart called Google. (Other big names in the legal process outsourcing -- or LPO industry -- include Clutch Group, CPA Global, Integreon and Mindcrest.)"


Back to the original discussion...

So, these Indian Lawyers aren't messing aound with pedley nonsense.  They are doing due dilligence and drafting derivative contracts??? Really?!!  I am shocked and appalled that Partners in big law firms in England, after years of only wanting the best graduates and training them through patience and mentoring, willingly throw work to Indian Lawyers living half a world away, of whom they know nothing.  That is definitely out of line with the boy's club model of lawyering which has been dominant in both England and the United States for decades.  I pray that they are hit with Angel's death curse... and the Indians screw up something extremely important and cost each big law firm millions more than British/American counsel would have cost.  From my fingertips, to God's ears!

"... in a drive to cut costs, are beginning to send that sort of work to cheaper jurisdictions, such as India, South Africa and the Philippines."

Once again, my jaw dropped to find out that South Africa and the Phillippines were also vying for outsourcing work???  How did we miss this????  We were so distracted by Indian Outsourcing Companies and Nigerian Lawyers who are notorious for seizing document review jobs, despite their lack of an American Legal Education--that we didn't even realize that there are a couple of other countries that are prepared to take what little work we have off of our hands!

"That sort of cost-saving has proved compelling in the wake of the economic downturn and is causing demand for Indian outsourcing providers to soar. Studies suggest that there are as many as 10,000 lawyers in the country working for outsourcing providers, and total revenues in the sector are expected to double this year to $1 billion (£613 million) and rise to $4 billion within five years." [Emphasis added].

Isn't it ironic that they have 10,000 gainfully employed attorneys in India, considering that nearly 2,000 lawyers were laid off from just the top 10 law firms in the country. The rest of the industry probably lost at least 8,000 jobs.  We just packed all of those jobs up and shipped them to India where 10,000 Indian Lawyers are prepared to do what we have done for hundreds years, for a fraction of the price and cost it takes to practice the law.

"The commercial legal market was badly shaken by the downturn and many senior partners expect that the double-digit growth of the boom years will not return for some time. Instead, the sector is reshaping itself. Some top firms believe that they will have to be leaner to retain profitability, with fewer associates for every partner. They plan to focus exclusively on high-end work for which clients will continue to pay top rates, while less valuable work will be farmed out."

I'll go ahead and say the obvious; if law firms reshape themselves into a top-heavy model where the work is farmed abroad and the partners focus on "high-end" work and rain-making, the quality will suffer.  There is very little supervision in Bangalore.  Senior associates are no longer valued, along with new grads--and they are the real workhorses of any law firm.  So, once again, the law firm model may implode because of the revamping in this economy.  Between outsourcing, laying off senior associates and charging flat fees, the PPP is sure to drop to the single digits.

So, thanks to ABA Un-Ethics Opinion 08-451, American Lawyers are suffering from the consequences of outsourcing.  It's good to know that England is too.  Not because I want the legal profession to fall apart in two countries, rather than one... but it's nice to know that you are not alone.

Hourly Billing vs. Flat Fee

The WSJ poses the question, which type of case makes an attorney work harder?

I have done both types of cases before and I need to think about this one.

When I did a flat fee case, I would try to be effective, i.e. take as little time as possible to close the case.  My superiors would put pressure on me to complete the case as soon as possible because flat fee cases were considered low yield, and were only taken on as a means to get referrals for more lucrative cases, i.e. cases billed hourly. 

The goal of taking on any case was to do it in the amount of time it would take to remain on par with your billable rate.  For example, if you were doing a complicated real estate closing for $3000 and you typically charged $225 an hour--you had to accomplish the closing in 13 hours or you have lost money for your firm.  So, we still tracked the billable hours to measure profitability and as a means of putting pressure on an associate.

So, effectively, by keeping tab on the time it takes you to do a flat rate case--you are working harder and faster.  But I can't say that you're doing a better job.  After all, you're rushing and many mistakes happen when you are rushing.