Forewarned is Forearmed: Anticipating Big Changes for the Legal Profession

I don’t know about you, but I am sucker for technology and “Big Data” stories. I was glued in front of my television when IBM’s Watson took on Jeopardy’s reigning champion Ken Jennings–and won.  I am interested in the work of scholars such as Dan Katz and initiatives such as ReInvent Law™ and LawWithoutWalls.™  When NPR and the New York Times ran stories about how technology may do a better job than lawyers for certain tasks such as e-discovery, I emailed those stories to friends and colleagues. My ears perk up when I read about the coming “disruption” to the legal profession. I often recommend to others Richard Susskind’s book entitled The End of Lawyers? about the impact of technology on legal services.

Regardless of whether you share my fascination for these kinds of topics, I encourage you to read the article entitled The Great Disruption: How Machine Intelligence Will Transform the Role of Lawyers in the Delivery of Legal Services which Professors John McGinnis and Russ Pearce contributed to the Fordham Colloquium on The Legal Profession’s Monopoly on the Practice of Law. In my view, regardless of one’s field of expertise, everyone should read this article and begin to reflect on this phenomenon that will revolutionize the practice of law, and dramatically change all of our lives.

This article begins by describing the rise of machine intelligence. It provides details that may be as new to other readers as they were to me. For example, IBM has created a division around Watson, has invested $1 billion in its development, and is using its program to aid in medical diagnosis. The authors explain that in a “recent competition on how to make use of Watson, the winning entry centered on the legal field, using Watson to search for relevant evidence in data and predict how helpful the evidence will be to winning the case.”

After noting acceleration in the development of machine intelligence, the article identifies five areas of legal practice that will change dramatically in the near future as a result of machine intelligence:  (1) discovery; (2) legal search; (3) document generation; (4) brief and memoranda generation; and (5) prediction of case outcomes. The section on discovery, for example, focuses on the role of predictive coding in large scale litigation, which has already been used in some antitrust cases with the U.S. Department of Justice’s approval.

The section on legal search explains not only that machines will soon have the capability to search all legal precedents, but also notes the expanding role of semantic search, the increased ability of machines to make “judgments” about the strength of precedents, and their future ability to identify the issues implicated by a given set of facts. It predicts that machine intelligence will replace the legal search function of lawyers.

Concerning document generation, the article suggests that as machine intelligence grows, computer-generated forms will have an even broader scope in legal practice. The authors predict that within ten to fifteen years, computer-based services will routinely generate the first draft of most transactional documents. The authors cite the example of a law firm based in Silicon Valley that has developed a program that automatically creates the documents for incorporating startups. This program has significant reduced costs by reducing the billable time from an average of 20-40 hours to a handful of hours: “In cases with even extensive documents, we can cut the time of document creation from days and weeks to hours.”

The article predicts that although briefs and memorandum are more difficult than forms, in the future, machines will become more and more adept at generating useful first drafts. This section discusses the current ability of machine intelligence to generate news stories based on data and the likelihood that there will be continued improvement in this area.

This fifth development the article discusses is predictive analytics, which is a new discipline that combines data with analysis to make predictions. The article notes that using big data to guide decisions is one of the most important trends of the last decade and that it has now come to the field of law. Professor Pearce and McGinnis’ article provides several examples of the use of legal analytics. These examples include Lex Machina, which has gathered data from thousands of patent litigation cases and is being used to predict outcomes in that field. They also cite the 2002 Supreme Court Forecasting Project, in which a model of Supreme Court decision-making, which was based on previous Court decisions, more correctly predicted outcomes than a set of Supreme Court experts.

The concluding sections of the first part of the article are entitled “Future Trends” and “Answers to Common Objections.” The authors predict that because machine intelligence will permit clients to better compare price and performance, lawyers may lose market power to non-lawyers who provide what traditionally might have been thought of as “legal services.” The authors note, however, that “super-stars” may earn even greater returns than previously because data will make it easier to determine who is a superstar and because these superstar lawyers may use technology to deliver innovative solutions to problems faster and to a broader range of clients. The “answers” section anticipates criticisms about the predictive value of big data and about the degree to which machine intelligence will be able to replace human judgment. Anticipating those who might argue that the legal profession has always adapted to technological change (e.g., from carbon paper→copiers  or from pens→typewriters→computers), the authors respond that machine intelligence is a different kind of technological change than previous technological changes because it substitutes technology for core legal skills and because the rate of change is faster than previously.

Having addressed the nature of the changes in the first part of the article, the second part asks whether regulatory barriers are sufficient to prevent machine intelligence from undermining lawyers’ traditional monopoly. It concludes that these regulatory barriers will not hold back the advance of machine intelligence. The authors find significant the degree to which U.S. consumers and businesses already are “voting with their feet”  by selecting individuals or services other than lawyers to provide what traditionally was regarded as legal services. They also observe that the legal service market has become de facto deregulated with regard to machine intelligence and that increased enforcement of unauthorized practice of law is unlikely to stem the delivery of legal services through machine intelligence. Among other things, the authors point out the degree to which the legal profession already has accepted machine intelligence as an “input” and changed the regulatory rules to accommodate this input, citing the recent amendments to the comments of ABA Model Rule of Professional Conduct 1.1 – Competence. The article disagrees with commentators such as Larry Ribstein, Gillian Hadfield, Ray Campbell and Bill Henderson to the extent those commentators have argued that unauthorized practice of law or UPL provisions will hinder the application of machine intelligence to legal services.

The third and final section of the article discusses why opposition to machine intelligence delivery persists. The article asserts – quite boldly – that the exponential development of machine intelligence in legal services is inevitable and that the application of machine intelligence to legal services will result in better quality legal services at a lower cost. It posits that opposition to machine intelligence comes from fear of machine intelligence or fear of the implications for lawyers’ monopoly. The article describes the first “fear” as lack of trust regarding the competence of machine intelligence or concerns about the inability of the legal profession’s competence to evaluate machine intelligence. As to the second, the legal profession’s monopoly is implicated because if you accept the article’s starting premises, which are listed above, then the rise of machine intelligence might lead the public to believe that the current monopoly is unnecessary as a matter of “expertise” and that it impedes rather than promotes the public good because it hinders a broader more cost-effective distribution of the competent legal services.

In my view, the third section of The Great Disruption would have been stronger if it had addressed more directly the competing visions of machine intelligence. For example, it might have been helpful if this section had labelled some of the potential reactions as “skepticism” rather than “fear.” While I agree with the authors regarding the likely future abilities of machine intelligence, I know that others are more skeptical about whether machine intelligence can deliver what has been promised. Some may believe that lawyers are fundamentally more suited than machines to provide the customization that distinguishes legal services and legal advice from legal information. Labelling these reactions as “skepticism” rather than “fear” might have promoted greater dialogue about the nature of legal services and the capabilities of machine intelligence.

The third section of the article would also have been stronger if it had addressed the perspectives of those who think that machine intelligence might turn out to have results that are less beneficial than the rosy picture described by the authors. For example, this section might have referred to concerns about the lack of transparency and accountability that can occur when the values and assumptions that underlie machine intelligence algorithms are not clear or concerns that machine intelligence algorithms may be “gamed” by those with the most experience or power. These types of issues have been discussed in the context of online dispute resolution. In defense of the article, however, while an expanded discussion of these kinds of issues would have been useful, the article was subject to strict word limits and it clearly has laid the groundwork for ongoing dialogue.

In sum, not all readers will agree with the article’s concluding sentence, which states: “Ultimately, therefore, the disruptive effect of machine intelligence will trigger the end of lawyers’ monopoly and provide a benefit to society and clients as legal services become more transparent and affordable to consumers, and access to justice thereby becomes more widely available.” All readers should agree, however, that this is a thought-provoking article that deserves serious study. The implications of the developments the authors discuss are profound.  While I am agnostic about whether machine intelligence ultimately will be deployed in a way that helps the public or whether it has the potential to be harmful, I am not agnostic with respect to the significance of these developments. Professors McGinnis and Pearce have convinced me that dramatic changes inevitably will occur in the very near future. In my view, it would be a colossal mistake if lawyers – and those who teach aspiring lawyers – ignore the issues implicated by Professor McGinnis and Pearce’s article.


The Forgotten Promise of Professionalism

Sida Liu, Lily Liang, & Terence C. Halliday, The Trial of Li Zhuang: Chinese Lawyers’ Collective Action Against Populism, 1 Asian J.L. & Soc’y (forthcoming 2014), available at SSRN.

Perhaps all the lawyer jokes are not such bad a thing.1 Rather than trying to make lawyers more appealing, we ought to protect the profession from the sometimes-inevitable popular resentment. By telling the shocking story of defense attorney Li Zhuang’s prosecution in China, Sida Liu, Lily Liang, and Terence Halliday remind us of the power of professionalism and the need, at times, to resist both government pressure and public anger at lawyers.

In America, we are living through a time of radical change in the profession and in professional education. The market seems, in many ways, to be winning out. The concept of professionalism is assuming a sort of hazy anachronistic aura. Some scholars even declare the notion defunct and celebrate its demise.2 While the profession has always experienced itself in a state of crisis, the suggestion that we abandon the notion of an independent legal profession is relatively new.3 Perhaps it is changes within the profession, such as its growing size and competitiveness, which have led to the decline in professionalism. Broader cultural trends toward consumerism and away from collective approaches to social problems must also contribute to this shift. If we accept the general momentum, the question remains whether to embrace or resist it.

There is no doubt that professionalism has been used to combat progressive change. It has been invoked to justify racism and anti-Semitism and to prevent outsiders from challenging the norms of the profession.4 But as the authors of this article remind us, it can also serve as an important break, a valuable check on the accumulation of power. Lawyers can force the government to abide by the law and defend the rights of individuals when the popular mood turns against them. Comfortable in our relatively secure democracy, it is easy to forget how fragile rights and liberties truly are. Among other things, the authors of this article remind us that while flawed, an independent legal profession is fundamental to a democratic system.

Liu, Liang, and Halliday define professionalism as an ideology, which prioritizes formal rationality over substantive justice and procedures over outcomes. Populism, to the contrary, favors public accountability and political legitimacy. In vivid terms, this article demonstrates that populism—while appealing in theory—is often dangerous. The will of the people can be manipulated. It is susceptible to propaganda, political campaigning, and mass mobilization. Individuals or unpopular minorities can often fall prey to the changing tide of public opinion.

The Trial of Li Zhuang: Chinese Lawyers’ Collective Action Against Populism takes us half way around the world and recounts a trial and legal drama in China. It depicts a rapidly developing legal profession (there were only a few hundred lawyers in 1979 and now the number exceeds 200,000) struggling to establish its independence amidst assaults from the government, the media, and the public. At the center of this drama, Li Zhuang, a criminal defense lawyer, faced two criminal prosecutions and spent eighteen months in prison for what he—and most of the legal profession in China—insist was representing his clients well.

In 2007, communist party politician, Bo Xilai, had just taken charge of Chongqing, a municipality in Western China. Ambitious and, according to some, ruthless, Bo swore to revolutionize a city plagued by poverty and organized crime. Gong Gangmo, who was charged as part of Bo’s campaign to clean up Chongqing, hired Mr. Li in late 2009 to defend him against charges related to organized crime. Within a month, Li had been tried and sentenced for advising Gong to testify falsely that Gong had been brutally beaten by the police. Bo mobilized the press to support the prosecution. The cards were stacked against Li from the start. Among other things, prosecutors doctored photographs and fed the press stories about how Li had frequented houses of prostitution. Confronted with misinformation and propaganda, the public sided with the government and demanded a conviction.

Li faced two-and-a-half years in prison for violating Article 306 of the criminal law, which delivered harsh penalties for lawyers who falsified evidence. Li’s sentence was ultimately reduced to eighteen months. Prosecutors claimed that the reduction was in exchange for his cooperation. But after the sentence, as he was being taken from the courtroom, Li angrily shouted that he had been framed and coerced into a confession.

In 2011, while he was still in prison, Li was charged, again, for inducing witnesses to testify falsely. But this time, the case involved a client whom Li had represented in Shanghai in 2008. Most Chinese lawyers and scholars believed that the new indictment was in retaliation for Li’s outburst in court. It was odd, after all, that Chonqing authorities would handle this case when all the alleged conduct occurred in Shanghai. The second set of charges against Li was ultimately dropped but his license was revoked.

The authors of this article use the case to explore two competing ideologies in China. The government and media invoked populism, which values public accountability and political legitimacy, to condemn Li. Bo’s political campaign and propaganda drew on populist rhetoric to mobilize the population to pursue its conception of substantive justice over formal legal procedures. Li and his colleagues, on the other hand, invoked professionalism, a faith in process, formal rationality, and independence from political actors to defend Li and counter the force of the populist appeal.

As we know from our own history, professionalism can be used for self-serving and fundamentally anti-democratic ends. As I mentioned, it has been invoked to justify state supported monopolies and deny immigrants, women, and racial minorities access to the profession.5 But Liu, Liang, and Halliday remind us of the dangers of populism. They remind us that for all the failures and abuses committed in its name, professionalism is critical for ensuring rights and liberties in a democratic society.

What, other than the importance of professionalism, can we learn from the experience the authors recount of the very young legal profession in China? It seems to me that the opposition between professionalism and populism that is crystalizing around Li Zhuang’s case is not necessary to the survival of an independent legal profession and is, perhaps, inadvisable. Lawyers in our modern democratic state ought to conceive of their role as promoting a positive political or social participation and protecting against the kind of manipulation and propaganda that allow political minorities to oppress individuals or groups in the name of the public opinion.6

  1. Marc Galanter, Lowering the Bar: Lawyer Jokes and Legal Culture (2006). []
  2. Thomas Morgan, The Vanishing American Lawyer (2010). []
  3. Robert W. Gordon, The Independence of Lawyers, 68 B.U. L. Rev. 1, 48–68 (1988). []
  4. Richard Abel, American Lawyers (1989); Jerold Auerbach, Unequal Justice: Lawyers and Social Change in America (1977). []
  5. Richard Abel, American Lawyers (1989); Jerold S. Auerbach, Unequal Justice: Lawyers and Social Change in America (1977). []
  6. Richard Parker, Here the People Rule: A Constitutional Populist Manifesto (1994). []

The Importance of Context

Lawyers in Practice: Ethical Decision Making In Context (Leslie C. Levin & Lynn Mather eds., 2013).

Context matters to lawyers. The representation of clients, advice-giving, advocating, drafting, and negotiating—indeed, the very exercise of professional judgment—all take place in a context that shapes and informs lawyers’ decision-making. Context, however, plays only a minimal role in the American Bar Association’s Model Rules of Professional Conduct (“Rules”). While some comments to the Rules often provide contextual examples, an underlying theme of the Rules is their universal appeal: the Rules are explicitly meant to be a one-size-fits-all model for all lawyers, irrespective of context. Some argue that the universal nature of the Rules renders them conceptually anachronistic and practically useless, and have called for the promulgation of rules of conduct more in tune with the increasingly diverse realities practicing lawyers face. Such a contextual critique consists of two steps. The first is empirical. Promulgating rules that meaningfully address the realities that lawyers face in practice requires an empirical understanding of these very realities. The second step is normative. Once empirical evidence is gathered, one has to decide what to make of it and whether and how to incorporate it into the Rules.

Lawyers in Practice: Ethical Decision Making in Context, a new volume of empirical work edited by Leslie Levin and Lynn Mather, significantly contributes to this universal-contextual discourse. It consists of sixteen excellent chapters examining in detail lawyers’ decision-making processes across thirteen different legal contexts including family, immigration, and personal injury, as well as corporate, securities, and IP law. “[T]he organized bar and many law schools,” write the editors, “continue to focus their discussion of legal ethics primarily on bar rules of professional conduct. That approach, this book suggests, is a serious mistake.” (P. 4.) Such a focus on the Rules is a mistake, assert Levin and Mather, because it ignores the importance of context: “[t]he chapters in this book look at lawyers’ decisions from the bottom up—that is, from the perspective of lawyers in practice—and not from top-down rules that often reveal more about the aspirations of the profession than the reality.” (P. 11.) “We hope,” conclude the editors, that “this book will help narrow the gap between what sociological scholars are learning about lawyers’ ethical decision making in context and the legal profession’s approach to the teaching and regulation of lawyers.” (P. 21.)

Lawyers in Practice persuasively demonstrates how context matters to lawyers. Consider the seemingly straightforward matter of communicating with clients. “Divorce is all emotion” said one attorney that Lynn Mather and Craig McEwen interviewed for their chapter on the challenges of divorce practice (P. 72), and such emotional turmoil matters because “communication with bewildered, distraught, and legally inexperienced clients [typical divorce clients] must take different forms than communication with legally sophisticated clients with well-defined objectives.” (P. 69.) Or consider the familiar “where were the lawyers?” complaint leveled against outside and in-house lawyers following corporate scandals. The kind of advice in-house lawyers give, shows Sung Hui Kim in her chapter, depends in part on the role that they play within their institutions. For example, in-house “entrepreneurs” who embraced the company’s business values “discounted their role in policing management . . . and displayed a tendency to minimize their gatekeeping role.” (Pp. 207–08.) “Cops,” on the other hand, who “identified most strongly with their status as lawyers . . . understood their primary job as policing the conduct of management.” (P. 213.)

This book will be of great interest not only to practicing attorneys, students, and scholars of the legal profession but also to policy makers and regulators. Consider the ongoing debate over the accountability problem of public interest lawyers. The accountability problem, explains Scott Cummings in his chapter on public interest practice, is commonly understood as the usurpation of weak clients’ exercise of control and authority over the objectives of the attorney-client relationship by strong powerful lawyers. (P. 341.) But this problem, argues Cummings, well-documented in the traditional context of the civil rights model, does not apply to new emerging models of public-interest law that feature relatively strong clients, or strong lawyers who play only a limited role in the representation of their clients. (P. 355.) Attempting to understand and address the problem of public-interest lawyers’ accountability to clients outside of relevant context, cautions Cummings, risks treating old problems in situations where they no longer exist and missing new problems altogether.

Given the insights that emerge from Lawyers in Practice, regulators might worry about whether the Rules’ universal one-size-fits-all approach well suits an increasingly multifaceted and diverse profession. Levin and Mather, for example, assert in their conclusion that “[t]he one-size-fits-all approach of the Rules . . . needs to be revised. At a minimum, the Rules should recognize and encourage compliance with codes for specialty practices . . . Specialty bar codes should be written to reflect the true challenges of the practice specialties . . .” (P. 370.) Others are not as certain. David Wilkins, for example, suggests that the ongoing trends of increased mobility, the rise of information technology, the use of unbundling and repackaging of legal tasks, the deregulation of organizational forms through which law can be practiced, the institutionalization of pro bono, and globalization may have blurred old practice lines and destabilized the profession to the extent of rendering contextual rules of professional conduct impossible. (Pp. 33–42.)

Lawyers in Context powerfully demonstrates how context matters to lawyers. It is essential reading for anyone interested in the practice of law and the future of the regulation of the legal profession.


Defending Defending, with Integrity

How Can You Represent Those People? (Abbe Smith & Monroe H. Freedman eds., 2013).

Every criminal defense lawyer has been asked The Question: “How can you defend those people?” Even lawyers who do not represent persons accused of crimes have undoubtedly had to deal with the indignation directed at the lawyers representing the most recent high-profile, presumed-guilty defendants—O.J. Simpson, the detainees at Guantánamo Bay, alleged “American Taliban” terrorist John Walker Lindh, the Oklahoma City federal building or Boston Marathon bombing suspects, the man accused of being the guard known as “Ivan the Terrible” at the Treblinka concentration camp. The Question is about moral agency. How can you, an ordinary person, not only associate with but also actively assist terrible people in escaping punishment for terrible crimes?

Abbe Smith and Monroe Freedman have both written eloquently in answer to The Question.1 Now they have compiled a number of essays—some in the form in which they were previously published, some updated for this book, and some entirely new—written by advocates and academics who take seriously the problem of giving an account for one’s actions within a professional role. All of the essays, in one way or another, address the persistence of moral agency. Inside a criminal defense lawyer there is an ordinary person, with ordinary-person values, committed to non-violence and respect for the rights of others. What is it like to be that person? In this way the essays move beyond justification to consider the issue of motivation. In a classic essay reprinted in this recent book, Barbara Babcock surveys a number of responses, including:

  • The Constitutionalist’s Answer. Criminal defense lawyers protect the bedrock individual rights of our constitutional order. The role of the criminal defense lawyer gains not only justification but also nobility from this effort. This is the answer that Monroe Freedman has steadfastly given to The Question.
  • The Civil Libertarian’s Answer. If we do not protect the rights of people accused of awful crimes, we—as a society—will lack the commitment to protect the rights of all people. As Martin Niemöller puts it in his poem, “First they came for the communists, and I did not speak out—because I was not a communist . . . .”
  • The Legal Positivist’s Answer. Truth and justice are law-dependent concepts, so there really is no role-independent way of concluding that a client is guilty and, therefore, no role-independent foundation for condemning the actions of criminal defense attorneys. A less-sophistical version of this answer appeals to all that is uncertain and unknowable about an event, including the very-real possibility that an accused defendant is innocent of the crime charged. In one of the most arresting essays in this volume, Joseph Margulies describes the horrific odyssey of an Australian Muslim who happened to be picked up in Pakistan soon after the 9/11 attacks, was repeatedly subjected to torture, and was released three years later, never having been charged with any wrongdoing.2
  • The Humanitarian’s Answer. Criminal defendants are human beings, too—children of God, as Sister Helen Prejean would note—and deserve compassion and to have someone standing by them as they are processed through the dehumanizing machinery of the criminal justice system. In a more secular idiom, a jury needs to be able to see the inner, vulnerable, 11-year-old boy who lived through unspeakable abuses to become a capital defendant.3

Significantly, all of these arguments are intended to generate reasons that can be endorsed from the point of view of the lawyer—to constitute what Daniel Markovits calls a first-personal approach to ethics.4 Even lawyers in common-law systems with a cab-rank rule, in which declining representation on the grounds of the reprehensibility of the client is unethical, can appreciate the additional need for a first-personal justification. It is one thing to say a legal norm, like the cab-rank rule, requires representation; it is quite another to endorse, from the point of view of one’s own moral agency, the representation. Markovits’s approach to legal ethics requires two separate justifications: (1) An impartial, or third-personal, argument showing that a social role is justified and that an action taken by an occupant of that role is required by the role for the realization of the ends for which it is constituted.5 Much of the traditional debate in theoretical legal ethics is over whether these arguments can succeed. (2) A first-personal argument appealing to the concern all persons have for living a life characterized by integrity, where integrity means, essentially, having a life worthy of commitment, endorsement, and a kind of pride of authorship. Integrity is a way of representing the moral agency that persists while people act in social roles. In terms of The Question, it places stress on the person to whom it is addressed: “How can you represent those people?” You, in light of the kind of person you are, and the other things that you believe constitute a life well-lived.

One of the highlights of the book is the dénouement of the Freedman-Tigar debate, between Freedman and Michael Tigar—a celebrated civil rights attorney who represented, among other notorious clients, one of the accused Oklahoma City bombers, Terry Nichols. The occasion for the debate was Tigar’s representation of John Demjanjuk, accused of having committed atrocities as a guard at a Nazi concentration camp. Freedman pointed out that Tigar had once criticized a large law firm for representing General Motors in an environmental case, urging them to ask this version of The Question:

Which side are you on? The decision is whether or not you will commit your skills, your talents, your resources to the vindication of the interests of the vast majority of Americans or the vindication of the interests of . . . the minority of Americans who own the instruments of pollution and repression.6

Freedman asked the obvious follow-up question: If a law firm is morally accountable for its decision to commit its talents and resources to defending the owners of the instruments of pollution and repression, what then can one say about the decision to represent someone whose conduct was so infamous that he was known as “Ivan the Terrible”? Tigar responded with a moral argument:

We must remember the Holocaust, and we should pursue and punish its perpetrators. We dishonor that memory and besmirch the pursuit if we fail to accord those accused of Holocaust crimes the same measure of legality and due process that we would give to anyone accused of wrongdoing. Precisely because a charge of culpable participation in the Holocaust is so damning, the method of judgment whether such a charge is true should be above reproach.7

Is this an argument that one can endorse from the first-personal point-of-view? Can a lawyer represent John Demjanjuk with integrity? It is one thing to believe that a person accused of a serious crime is entitled to a fair trial. It is another to decide to commit one’s own skills and talents to defending that person. In effect, Tigar concedes Freedman’s point. A lawyer does owe an obligation of justification. But there are abundant opportunities for justification when one is living and practicing law in a society characterized by inequality, abuses of power, active and unconscious racism, and a sclerotic and unaccountable political system.

Lawyers may be tempted to roll their eyes when hearing yet another version of The Question. Hasn’t enough been said already to establish, for once and for all, that lawyers like John Adams and Clarence Darrow are authentic American heroes for a reason, because they embody our commitment to treating everyone as equal under the law? The importance of this book is, in part, the reminder to lawyers that every generation has to answer The Question again, and that the process of doing so is an opportunity to reflect not only on the values of the legal profession, but on more fundamental matters such as the meaning of human dignity, compassion, justice, and mercy. The reflection itself may be agonizing, as explained by two capital defense attorneys:

[O]ur consciences are heavy for so many reasons—the double-edged nature of our “successes” (most often, saving a client from the death chamber means he will vanish into prison for the rest of his natural life), the permanency of our failures, the constant gnawing guilt that we could have done more—but, for us, it is the pain we inflict every day that is our deepest wound: if we want our clients to live we will inevitably end up hurting them, their families, and ourselves in the process . . . . [A]s much as we want to help them with their other needs, we need their stories more. So we start asking questions. We dig. We probe. And we push onward, even when it’s obvious that what we are unearthing hurts: a client so addicted to drugs that he traded the car he’d been living in for two hits of crack; a client who was forced to watch his stepfather rape his younger sister and then dump her body in a tub of cold water in an attempt to stanch the bleeding; a client who, as a small child, slept on the floor of a crack house surrounded by rotting garbage and strangers trading sex for drugs; a client so defaced by a childhood illness that his father would not touch him; a client who “permitted” grown men to perform sex on him for slices of pizza.8

After encountering many of the essays in this volume, a reader comes away with a new version of The Question—how can one not represent these people? This book ultimately succeeds because it asks both the justification and the integrity question and does so by moving readers to experience the values of defending accused persons from the first-personal point-of-view. It is difficult to come away from the book feeling anything other than intense gratitude and admiration for the lawyers who are called to be criminal defenders.

  1. Abbe Smith, Defending Defending: The Case for Unmitigated Zeal on Behalf of People Who Do Terrible Things, 28 Hofstra L. Rev. 925 (2000); Monroe H. Freedman, The Lawyer’s Moral Obligation of Justification, 74 Texas L. Rev. 111 (1995). []
  2. Joseph Margulies, Ruminations on Us and Them, in How Can You Represent Those People?, supra, pp. 101–07. []
  3. William R. Montross, Jr. and Meghan Shapiro, Wrecking Life: When the State Seeks to Kill, in How Can You Represent Those People?, supra, p. 113. []
  4. Daniel Markovits, A Modern Legal Ethics (2008). []
  5. This structure is from David Luban’s fourfold root of sufficient reasoning, in Lawyers and Justice. []
  6. Quoted in The Lawyer’s Moral Obligation of Justification, supra, p. 113. []
  7. Michael E. Tigar, “Setting the Record Straight on the Defense of John Demjanjuk,” Legal Times (Sept. 6, 1993), reprinted in Monroe Freedman & Abbe Smith, Understanding Lawyers’ Ethics (4th ed., 2010), Appendix A, p. 371. []
  8. Montross and Shapiro, supra, pp. 114–15. []

Patterns and Problems in Professional Discipline Cases

Leslie Levin, Misbehaving Lawyers: Cross-Country Comparisons15 Legal Ethics 357 (2012), available at SSRN.

Commentaries on lawyer discipline often refer to practice areas that are involved in grievances. Discussions of lawyer discipline devote far less attention to examining the circumstances of particular grievances or the characteristics of the lawyers facing disciplinary charges. That is one reason why I especially liked Professor Leslie Levin’s Misbehaving Lawyers: Cross-Country Comparisons. This article was published in a special issue of Legal Ethics—the preeminent international legal ethics journal.

In his preface to the issue, Richard Abel described the premise of the special issue as follows: “we can illuminate the nature of and explanations for lawyer misconduct and the relative advantages of different regulatory responses by comparing case studies of lawyers disciplined a variety of countries.”1 In the special issue, experts presented fascinating case studies of lawyers disciplined in the authors’ home countries. Following these case studies, Professor Levin’s essay identifies similarities and differences among the cases studies written by experts from Canada, the Netherlands, the United Kingdom, Australia, and New Zealand. Anyone interested in lawyer conduct should read Professor Levin’s essay because it provides a concise and thoughtful analysis of patterns and problems that emerge from the accounts presented in the articles in the special issue. Legal profession scholars, lawyers who defend and prosecute disciplinary cases and malpractice cases, jurists, educators, and individual practitioners can learn a great deal by reflecting on Professor Levin’s observations.

Although case studies have their limits, Professor Levin points out that an examination of case studies suggests common conditions that lead some lawyers to misbehave. One common characteristic relates to the context of representation. Generally speaking, the lawyers in the case studies represented individuals facing some personal plight, such as persons facing criminal charges or family difficulties. (P. 358.) Other similarities relate to the psychological profile of individuals facing serious discipline. Each of the lawyers in the case studies appeared to be highly motivated by money. Professor Levin explains that the “love of money” is positively related to manipulative behavioral disposition. (P. 367.) To maintain their own self-esteem, the lawyers engaged in rationalization—shifting the blame to others. (Pp. 368, 370.) Consistent with this mindset, the lawyers did not show remorse. (P. 371.)

The lawyers’ self-deception may have been checked or tempered had peers or colleagues discouraged the misconduct. Professor Levin explains that positive peer influence was less likely to occur for the lawyers in the case studies because they largely practiced on their own or with others that were “ethically challenged.” (P. 358.) Outside of their own offices, lawyers did not appear to associate with “communities of practice,” defined as groups of lawyers with whom practitioners interact and to whom they compare themselves and look for common expectations and standards.2 Rather than adhere to community norms, these lawyers tended to rely on their own personal ethics. This can be particularly problematic when lawyers, especially litigators, set their own boundaries and feel pressure to “play as close to the line” as possible.

The case studies should also be of interest to legal educators who believe that that law school plays a role in shaping students’ professional identity and development.3 As Professor Levin points out, lessons from early in a lawyer’s career continue to influence that individual’s ethical decision-making. (P. 362.) Therefore, those of us in the academy should reflect on what we can do to help new graduates start off—and continue—on the right foot.

The essay should also motivate legal educators to consider their role as gatekeepers. In our dealings, we may occasionally encounter students who appear to be “pushing the ethical envelope,” even if they do not violate applicable rules. Query whether failing to deal with “ethically challenged” law students contributes to them feeling emboldened, believing that they can avoid consequences for acts and omissions that are inconsistent with professional norms.4

Finally, Professor Levin’s discussion of recidivism raises serious questions about the failure of the disciplinary systems to protect the public. Although there are numerous steps that may be taken to avoid and deal with misconduct, the essay clearly communicates the value of improving transparency so that members of the public can obtain information and protect themselves.

It is for these reasons that I would like to thank Professor Levin for continuing to prod us to reexamine how we discharge our responsibilities to police the legal profession.

  1. Richard Abel, Comparative Studies of Lawyer Deviance and Discipline, 15 Legal Ethics 187 (2012). []
  2. P. 362 (quoting Lynn Mather, Craig A. McEwan, & Richard Maiman, Divorce Lawyers and Work: Varieties of Professionalism in Practice 6, 14 (2001). []
  3. See Neil W. Hamilton, Fostering Professional Formation: Lessons from the Carnegie Foundation’s Five Studies on Educating Professionals, 45 Creighton L. Rev. 763 (2012) (providing insights on professional formation). []
  4. “Ethically challenged students” refers to those who engaged in questionable conduct, but escaped formal discipline in school. []

Resistance is Futile?

Jakob Weberstaedt, English Alternative Business Structures and the European Single Market, Humboldt U. Berlin Working Paper (2013), available at SSRN.

In the last several years, alternative business structures (ABS) have been a top agenda item regarding the legal profession in the United States and Canada. Moves in Australia and England to liberalize legal markets—including the introduction of non-lawyer ownership of law firms—have inspired and influenced conversations about whether ABS should be introduced into the North American market for legal services. Most North American lawyers, however, don’t likely know much about how these overseas reforms have also fuelled the debate about ABS in Continental Europe. Fortunately, in his recent article, Jakob Weberstaedt provides an engaging account of this very issue.

Weberstaedt focuses on the reaction of the German Federal Bar to reforms introduced in England and Wales by the 2007 Legal Services Act, which allowed for law firms to be wholly-owned by non-lawyers (“English ABS”). The German reaction is, as he notes, of particular interest given both its forcefulness and the size of the German market for legal services (approximately 22% of the total revenues of the legal services sector in Europe). To provide some background for his analysis, Weberstaedt begins his article by outlining “[a] brief history of the Continental resistance to English ABS.” In this section, a number of interesting factual tidbits are offered, including the fact that, even before English ABS reforms were finalized, the German Federal Bar, via a 2006 letter from its president to a UK parliamentary committee considering the draft Legal Services Bill, made it clear that it “did not like the proposed reforms and that English ABS would not be allowed to operate in Germany.” A similarly negative position was subsequently taken by the Council of Bars and Law Societies of Europe (CCBE), which argued that provisions in a European Union directive1 addressing lawyer mobility would allow the Continental European bars to prevent English ABS from operating within their national jurisdictions. In turn, this analysis made its way into a response from the German Federal Bar to a 2011 American Bar Association issues paper on ABS. The background provided by Weberstaedt is both an informative summary of the events leading to the current debate about English ABS in Continental Europe and also a helpful reminder that the once-parochial issues of lawyer regulation now have an unprecedented global reach.

At the heart of Weberstaedt’s article is a detailed analysis of the legal ability of English ABS to enter other European markets. He first considers a number of “small European ABS cases”—ranging from, for example, a relatively simple hypothetical involving German lawyers investing in an English ABS to more complex hypotheticals involving cross-border online legal services and English ABS providing services in Continental European markets—before tackling the “big European ABS case” (i.e., what happens “if an ABS with non-lawyer investors seeks to establish a presence on the Continent”). In considering these scenarios, Weberstaedt is attentive not only to the applicable legislative context and case law but also to the relevant political background.

The conclusions that Weberstaedt reaches suggest that the future of English ABS on the European Continent may be lively despite protestations of the Continental European bars. The law, he observes, is in many ways favourable to the “pro-ABS” side of the debate. With respect to the “small European ABS cases,” he concludes, for example, that Continental European bars will not be able to successfully invoke the current regulatory regime to prevent English ABS from offering services outside the scope of reserved activities or from engaging in the temporary provision of legal services in Continental Europe. Although he acknowledges that the fate of an English ABS that wants to more permanently establish itself in another European jurisdiction is “uncertain,” he also suggests that “the English side could improve its odds in the ECJ by developing a comprehensive litigation strategy taking maximum advantage of its influence over the facts and timing of the ‘big ABS case’ in the ECJ.”

Weberstaedt’s analysis of the various scenarios that may play out regarding the entrance of English ABS into other European markets is both comprehensive and accessible. As such, it will likely be of interest to those both familiar and unfamiliar with the European debates. His article also helpfully offers broader lessons for non-European jurisdictions grappling with the issue of ABS and how far to liberalize legal markets.

One of Weberstaedt’s major critiques is that the CCBE and the Continental European bars “could have done a better job of recognizing what is going on in England . . . [and that] [t]he failure to see beyond the self-painted cartoonish picture of ‘banks, insurance companies and supermarket chains’ moving into legal services was at the origin of a deplorably incomplete legal analysis.” Although Weberstaedt credits the American Bar Association2 and the Law Society of British Columbia3 for a more sophisticated and consultative approach to the ABS question in their jurisdictions, North Americans are still wise to heed his warning about not allowing the “Tesco law” model to disproportionately dominate the conversation about ABS and fuel knee-jerk negative reactions.

Weberstaedt also helpfully reminds us that arguments for and against the introduction of ABS take place in what is largely “a data-free zone”. As time passes and more empirical data is available from England to complement the several existing Australian studies,4 speculation on predicted outcomes of introducing ABS will be replaced by reference to actual outcomes. If Weberstaedt is correct that this future data is unlikely to strengthen anti-ABS arguments, we may see an acceleration of reform measures globally. Although bar organizations in many jurisdictions continue to rebuff calls to introduce forms of ABS, one wonders if developments over the next few years will quickly render such resistance futile.

  1. As explained on the European Union website: “a ‘directive’ is a legislative act that sets out a goal that all EU countries must achieve. However, it is up to the individual countries to decide how.” []
  2. As Weberstaedt observes, although the ABA has, to date, rejected the introduction of ABS (i.e. the types of business structures now permitted in England and Australia) into the United States, the approach taken by the ABA is laudable for being broadly consultative. []
  3. The Law Society of British Columbia, Alternative Business Structures in the Legal Profession: Preliminary Discussion and Recommendations (2011). []
  4. See, e.g., Susan Fortney & Tahlia Gordon, Adopting Law Firm Management Systems to Survive and Thrive: A Study of the Australian Approach to Management-Based Regulation, 26 St. Thomas L. Rev (forthcoming 2014), available at SSRN; Christine Parker, Tahlia Gordon, & Steve Mark, Regulating Law Firms Ethics Management: An Empirical Assessment of an Innovation in Regulation of the Legal Profession in New South Wales, 37 J.L. & Soc’y 466 (2010), available at SSRN. []

Reimagining a New Ending to “Reimagining Legal Services”

Spoiler alert: This Jotwell review reveals the plot of Mitchell Kowalski’s book, Avoiding Extinction: Reimagining Legal Services for the 21st Century.

In recent years, those of us who are interested in legal services market innovation and disruption are often presented with two different types of source materials to satisfy our curiosity. First, there is blue-skies thinking—ideas that might ultimately become mainstream but not in the immediate future. Secondly, there is research, which examines innovative market behaviours, delivered by actual providers to real clients. However, what is generally missing from such works are discussions about how either of these changes will impact existing lawyers who find themselves caught up in this period of transition. And this is the main attraction of Mitch Kowalski’s approach: By writing a novel, Avoiding Extinction: Reimagining Legal Services for the 21st Century, Kowalski is able to offer a human-focused examination of these mega-market changes—from the perspectives of individual clients and private practice lawyers.

When we first meet Maria Fernandez, general counsel for Kowtor Industries, she is clearly intended to act as an emblem of client frustrations with current Big Law service providers. Indeed, within the book’s first few pages, Kowalski reveals that Fernandez has recently received a budget-busting invoice from one of the traditional law firms she previously worked with. Naturally, therefore, Fernandez becomes intrigued by a YouTube video that focuses on the activities of an innovative legal practice called Bowen, Fong & Chandri (BFC). In the video, BFC chief executive and chairman Sylvester Bowen sets out what he believes is wrong with the existing model of legal services and how BFC is different. What she hears clearly arouses her interest: By chapter three, Fernandez is taking her company’s CEO, Harry Kow, along to a BFC tender presentation.

Mark Reynolds first appears in chapter four. His main role in the novel is to act as a disoriented and burnt out, “big law” refugee, cautiously trying to come to terms with the realities of the new legal market as BFC’s newest recruit. Indeed, Stephen Boulder, the very first BFC employee he encounters on day one, points out that Reynolds’ three-piece suit is “overdressed” for BFC’s laid-back approach. But this is just the start of the cultural challenges Reynolds faces, as he progresses through BFC’s induction programme. BFC’s use of cloud-based IT systems initially causes him to worry about possible ethical and confidentiality-related issues. He is also concerned about the firm’s use of an Indian-based legal process outsourcing operation. Naturally, he is reassured by his fellow BFC coworkers that all possible ethical and regulatory challenges have already been overcome.

As you may now have guessed, many aspects of BFC’s culture and working practices are revealed through discussions between characters in Kowalski’s novel. They cover, among other things, the perfidious billable hour, virtual working, the unbundling of legal services, and the importance of results for clients. On many occasions, this approach works: In my mind, I imagine many of these conversations being delivered in the rapid style that was pioneered on the West Wing television series. But, on other occasions, this method feels somewhat laboured. For example, when explaining BFC’s approach to knowledge management (KM), the discussion between KM head Barry Spunker and Reynolds comprises lengthy tracts of explanation by the former, punctuated by a succession of two-word responses by the latter. Thankfully, Kowalski uses humour and self-awareness to alleviate (some) incidences where over-long monologues may cause the reader’s attention to wander. For example, as Rachel Nguyen, BFC’s senior vice-president of professional development, enthuses about the firm’s tension-avoiding air circulation system, Reynolds is revealed as thinking: “She sounded a little like a bad office brochure . . . particularly when . . . gushing over the special coating of the offices’ large windows.”

Segments of clunky dialogue aside, perhaps the biggest challenge for any reader of Kowalski’s novel is in its plotting. Having introduced Maria Fernandez as an in-house counsel considering retaining BFC, and Mark Reynolds as a new BFC recruit, I came to regard it as inevitable that Fernandez and Reynolds would ultimately work together.1 But remarkably, this storyline never materialises. The last we hear from Reynolds, in the book’s penultimate chapter, is that he has been selected to write BFC’s pitch document for the Kowtor tender.2 Yet, having dominated the first three chapters of the book, Fernandez’s character simply vanishes, without the reader ever learning about the outcome of her meeting with BFC. Instead, the book concludes in a wholly unexpected manner: BFCs’ CEO and chairman, Sylvester Bowen, announces his resignation at a directors’ dinner.

In truth, I found it difficult to care about Bowen’s resignation. After being featured in the YouTube video watched by Maria Fernandez in chapter one, his character does not reappear to any significant extent until chapter six, when he takes Reynolds out to lunch. Indeed, Kowalski’s novel ends so abruptly that I was genuinely surprised to be confronted with “Appendix A: Kowtor Industries Outside Counsel Expense and Disbursement Policy” just four pages after Bowen’s big announcement. I even checked the book’s page numbers, to reassure myself that a section of the book wasn’t missing from the novel I was reading. Nothing was. The ending was just plain odd.

However, if my criticism of Kowalski’s dialogue and story-telling has left you feeling that you could comfortably give this novel a miss, I urge you to reconsider. Like Bruce Macewen’s new book Growth is Dead: Now What?, Kowalski’s book will, in just a few hours of light reading, provide you with a clear overview of the possible future direction of the legal services market, in a way that a series of research papers on discrete research topics would not. And, while Kowalski’s novel is lightly referenced, I noticed it name-checked at least two well-known legal profession academics, discussed various principles of process reengineering, innovative ideas regarding approaches to learning, and (briefly) mentioned a well-known case history regarding technology-driven market disruption. I’m sure other well-known concepts were also referred in the book’s narrative, but simply passed me by.

As already mentioned, I believe that the book’s major failure is its abrupt ending, which fails to unify two key story arcs. But, hopefully, now that I’ve managed your expectations on this point, that shouldn’t be a problem. There’s no need to emotionally engage with either Mark Reynolds or Maria Fernandez, because you now know it’s unclear if they will ever end up working together—unless Kowalski plans to write a sequel. Let’s hope he does.

  1. I even absent-mindedly wondered if Reynolds and Fernandez would have an affair. []
  2. Partially in order to offer a “point-of-view” perspective, the novel does not consistently follow a linear timeline. []

It’s the System, Stupid?

Mitu Gulati and Robert E. Scott’s new book, The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design examines the pari passu clause, a clause designed to ensure a debtor’s creditors rank against each other equally. It asks why a standard clause in cross-border financial contracts remained in sovereign debt contracts after a well-known but minor judgment in a Belgian court suggested that the clause should be amended or removed. The book reveals that the majority of practitioners designing and drafting these contracts did not have a coherent and consistent explanation of the origin, purpose, or meaning of the term in sovereign debt contracts. How can it be that sophisticated legal practitioners can put forward contracts, worth millions or even billions of dollars, where they do not understand a term common to, and prominent in, the contract? And once a court decision, albeit an ‘unreliable’ ex parte Belgian decision, threatens to undermine received wisdom on the overall effect of those sovereign debt contracts, posing not insignificant risk that the clauses will be litigated, how is it that these terms remain largely unaltered? Moreover, why is the clause not removed if, as many seem to think, it performs no discernible and certainly no predictable function in the sovereign debt arrangements?

These are some of the fascinating questions explored in Gulati and Scott’s excellent book, The Three and a Half Minute Transaction. Part empirical project, part theoretical exposition of securities law, and part detective novel reaching back to Bolivia in 1870, it is a highly readable and nuanced account of how elite lawyers approach the drafting of sovereign debt contracts. The account is theoretically and empirically rich. Its conclusion is that modern legal practice poses significant challenges to the evolution of professional practice. It also raises questions about whether and how systemisation works. Systemisation is the idea that legal practice can be disaggregated into component parts and automated through processes (checklists, software and the like). As a favourite theme of innovators keen on developing legal practice beyond the inefficient artisan model— the book serves as a reminder as to how systemisation needs to cope with the complexity and stickiness of clients and markets.

As such, the book raises important challenges to the old guard (largely now the professional bodies) that holds to the notion of bespoke professional service delivering excellence. The book suggests that in sovereign debt contracts that it does not. It also challenges the new guard, those advocating disruptive innovation, such as Richard Susskind and Daniel Katz, to suggest how systems will overcome complexity and stickiness as a social phenomena embedded within client networks.

The story this book tells begins with the pari passu clause. We are told that the clause has been a feature of sovereign debt contracts for many years. As part of the contract’s boilerplate, such clauses are assumed to have survived and developed by reason of their utility and efficiency. An evolutionary theory of contracts casts out bad clauses while simultaneously ensuring that good clauses survive. The authors’ carefully critique the idea that there is a process of intelligent design at work. There are charismatic elder statesmen who do research, theorise, and innovate in contractual design in some of the firms under consideration, but the authors point out that these Wise Men—they are all men—are dying out and are apparently not being replaced. Additionally, these Wise Men have not used their influence to resolve the pari passu problem.

Instead, the story that we hear is of how large firms rely on precedents and computerised systems, which generate “horseshoe” contracts—standard forms that come close to a client’s needs and can be marked up with minimal effort to meet those needs. Lawyers are required to draft these contracts quickly, and—so the lawyers say—have no incentive under hourly billing and increased client pressures to conduct the research needed to replace the flawed clauses. More worryingly still, such lawyers miss out on the once traditional practice of having a partner explain mark ups and amendments of agreements. They do not learn the effect of the agreements they are working on. As one mid-level associate told the researchers:

Most of what we mark up and send round, we don’t understand at all.

The story is of agreements that are both mechanical and resistant to change. There are a variety of “herd instinct” biases that inhibit lawyers from suggesting changes. Changes require time and money to be invested. Conservative clients are said to resist them. Change brings with it risk; if a contract is changed there is a risk of unsettling the wisdom accumulated over years of practice.

A strength of the book is that it is simultaneously possible to both understand and be alarmed by the way in which such explanations are offered by practitioners without any coherent justification for their approach winning out. Particularly alarming is that the elder statesmen within elite firms specializing in securities law offer explanations as to the function of pari passu clauses that are contradictory (i.e., different lawyers do not agree with each other) and are—in Gulati and Scott’s view—often indefensible. Their views and continuing practice in the area appear to be ignorant of the major court decisions and policy stances bearing on the continuing use of pari passu clauses. The authors never explicitly state as such, but there is an alarming sense that—as regards this particular clause—the practitioners are simply making up explanations for their actions, or more often inactions, as they go. Far from the expert and forensic professional judgment being applied to the design of such high value contracts, habit and the rituals of practice replace deliberate thought.

Thus, the study quotes one practitioner saying:

why a standard clause in cross-border financial contracts, now . . . one that a junior associate can go to and plug the relevant parameters into—you know, type of issuance, type of issuer, which side we are representing, etc.—and the computer generates a standard contract. The firm spent [a large amount] on putting together this system. Associates can now produce a contract for one of these deals in three and a half minutes. This is the future of contracting in these markets.

The benefit of systems is that they produce predictability and uniformity. Gulati and Scott’s book thoughtfully develops an account of the benefits of predictability. Complex systems benefit from predictability. Clients prefer it. Changes in standard documents may breed suspicion and create negotiating costs. Thus, there is benefit in inertia within any particular system. So, when in Elliot v Peru an Belgian judge interpreted a pari passu clause in an unusual way, one might not be that surprised that law firms did not quickly change their sovereign debt agreements. Yet, clauses that once seemed obscure and harmless suddenly posed a litigation risk. Why did firms decide to do nothing about their pari passu clauses?

The book carefully dissects the reasons for not changing sovereign debt agreements in light of Elliot v. Peru and finds them wanting. Although, the rationale that most often appears to surface has a plausible ring to it: the transactional lawyers were worried about prejudicing future litigation. If you change a clause in response to a potential litigation threat, then it may be seen as an admission of doubt about the original clause. The problem with this argument is twofold. First, the opposite is as likely: if a court—even an obscure Belgian court—has interpreted a clause in a particular way and you have not taken prudent steps to clarify the meaning of the clause in the light of such a decision, then you might be taken to have accepted the Belgian court’s interpretation. Second, and here the book is worryingly convincing, the firms need to be able to show that the clause used has a plausible meaning, which they cannot do because the firms do not understand the meaning of the clause.

For the new guard the challenge that this poses is that a systemised, efficient contract process needs to have someone in full and proper control of the system. This book suggests that the operation of client markets and organisational theory both suggest that systems can become overly fixed—sclerotic and harmful to client interests. For me, one of the telling critiques made by the book is the way in which lawyers within the study had both diagnosed the underlying problem (firms drive lawyers only to do work for which they can bill) and sought to distance themselves from it. One partner, for example, bemoans the costs of associates: If they were paid less, his argument goes, the firms might be able to train them more. This begs the question, why do they need to compete for associates in a market that rewards newly qualified lawyers with high salaries if those same lawyers are drafting contracts that they (and their supervisors) do not understand? Moreover, how are their elders and betters going to train them, anyway, if they don’t understand these contracts either?

Of course, this may be going a little far. We are only talking about one clause in one type of contract. Other types of contracts and practice may be different. For the book to be able to go both deep and wide in its data collection, it had to concentrate on one type of contract. There is also the possibility that lawyers ignored the Belgian court decision because it was wrong, as most practitioners agreed it was, and irrelevant. The authors point out that the problem with this interpretation is that two subsequent cases suggest that other judges may be inclined to agree with the Belgian judge, or at least go some way towards agreeing. Both the Greek debt crisis and an Argentinian case suggested there is unpredictable life in the pari passu clause that practitioners would have been wise to address when Elliot suggested a problem. It looks possible that when securities lawyers offered the explanation that the Belgian decision was wildly wide of the mark, they let complacency and the habits of practice get the better of them.




The Persistent Gender Wage Gap in Legal Practice: What We Know and What to Do

Joyce S. Sterling & Nancy Reichman, Navigating the Gap: Reflections on 20 Years Researching Gender Disparities in the Legal Profession, 8 Fla. Int’l. U. L. Rev. (forthcoming, 2013), available at SSRN.

Nearly twenty years ago, the Colorado Bar Association and the Colorado Women’s Bar Association published a study that identified, among other things, a significant wage gap between male and female lawyers practicing in the local Denver community: the “average woman working full-time earned only 59 cents to the dollar earned by the average man working full-time.” (P. 4.) This finding led to a commitment by the Colorado Bar to sponsor additional research on the “the mechanisms that produced the gap.” (P. 4.) To the good fortune of the Bar and the community of scholars interested in issues related to gender and the legal profession, two University of Denver professors agreed to undertake this additional research with the “expect[ation that they would]… be able to expose the sources of bias, make recommendations, and move forward to remove the barriers to women’s success in law.” (P. 4.) Thus began the collaboration by Joyce Sterling and Nancy Reichman that has produced more than 25 published articles, working papers, and presentations on the gender gap. Taking an empirical approach to the problem, they have drawn on numerous sources, settings, and theoretical frameworks, all the while with quantitative and qualitative data at the core of their work, to produce both foundational research and cutting-edge insight.

In Navigating the Gap: Reflections on 20 Years Researching Gender Disparities in the Legal Profession, one of their newest papers, Sterling and Reichman reflect on the continuing presence of the gender gap, and lament that their research has not led to the eradication of the wage gap much less other barriers to gender equality in legal practice. The article does more than lament, however. It is a call-to-arms, of sorts, that offers important ideas for advancing equality and simultaneously provides a comprehensive overview of what they have learned from their research and that of others about gender disparities in the legal profession. The dual focus of looking back and forward makes this article particularly significant. It offers an entrée to those unfamiliar with research about gender inequality in the legal profession and a map for those interested in joining research with activism.

First, the facts borne out by their research:

  • The wage gap has neither been eliminated over time, nor does it disappear over the course of women’s careers as they gain experience and stature in practice. A threshold measure of a gap of 59 cents to the dollar, based on a study of lawyers practicing in Denver in 1994, “had improved by one percent [by 1999, but] . . . the gap increased for women with more years of experience.” (P. 11.) More than ten years later, in a new and unrelated study that drew from a national sample of law graduates who passed the bar in 2000, the gap clearly remained. Even women who had been practicing for only three years suffered lower earnings of 5% less than their male colleagues, while by seven years after graduation women earned 13% less than men. That is, the gap is evident very early in lawyers’ careers and increases with years of practice.
  • The wage gap is not explained by issues related to work-family balance. Instead, “gender matters more than parenthood when predicting compensation and hours worked.” (P. 17.) By focusing explicitly on the “endowments” of lawyers, including credentials, hours worked, and other factors, Sterling and Reichman have clarified the role of gender. They find that it continues to matter: for example, “fathers had more opportunities to work with high-profile clients than both mothers and women without children…” (P. 17.) Their current work focuses on bonus compensation, and while their study of the subject is not yet complete, it, too, indicates that “women were significantly more likely to receive either no bonus or a bonus less than $10,000, while men are significantly more likely to receive bonuses over $10,000.” (P. 17.)
  • The explanation for the wage gap relates to the gendered nature of law firms. Sterling and Reichman explain that “[a] gendered organization is not necessarily populated predominately by men. Rather, it is an organization defined, conceptualized, and structured in ways that puts a premium on masculine characteristics, including a willingness to work ‘on demand,’ free from domestic responsibilities.” (P. 4.) This is not to suggest an intentional conspiracy among male lawyers; rather, the firms are “infused with stereotypes about the appropriate roles for men and women that . . . slow or prevent upward mobility of women . . . within them.” (P. 5.) The organizational characteristics structure—and limit—review and advancement, too. These organizational factors do not indicate malicious intent; rather, as Sterling and Reichman explain, “Even in gendered organizations, management may aim to increase the number of women in the workplace but throw up their hands, rather than contemplate change, when the women they recruit decide to move to other work, organizations, or drop out of the labor market because work structures and culture are inhospitable to them.” (P. 5.) Consequently, they view this character of firms as central in addressing the wage gap as well as other factors related to gender disparity in practice.

Second, the diagnosis:

  • One approach to neutralizing the influence of the gendered nature of law firms is suggested by research on non-law professional services firms. Sterling and Reichman draw on work investigating gender inequality in engineering, among other services sectors, to suggest that “formalized procedures for hiring, evaluation and promotion” will help law firms address the wage gap, if not also other challenges to women lawyers. (P. 6.) Their research provides a substantial basis for concluding that law firms now do not rely on “formalized procedures.” (P. 6.) While there may be some uncertainty regarding whether differences between law practice and non-law professional services will prevent law firms from completely transforming themselves to the extent accomplished by engineering firms, there clearly is much that law firms can do to advance the objective of formalizing their career-related procedures.

Finally, proposals for going forward:

  • Solving the problem of gender disparity requires a combination of two elements: information and responsibility.
  • Information is key to addressing the wage gap and gender inequality more generally. As Sterling and Reichman put it, “You can’t change what you don’t observe.” (P. 20.) Promotion and hiring decisions in law are shrouded in mystery. In contrast, work on firms in other services industries suggests that transparency in this process is central to eliminating the wage gap and gender disparity generally. To address this, Sterling and Reichman refer to a proposal by Rachel Grand that would impose on law firms an obligation to disclose their standards for promotion; for each partnership decision, a firm would either disclose that it has abided by its stated standards or explain its variation from them. Grand’s proposal stems from the regulation of publicly held corporations regarding the nominating process for members of the board of directors. Sterling and Reichman do not delve into the details of how such a proposal might work for law firms or whether there are examples of law firms that already have adopted more explicit and formal processes for partnership decisions. It would be interesting to know whether such firms, if they could be identified, have had more success with regard to both the proportion of women in their partnerships and eliminating the wage gap. Perhaps future research will investigate this issue and related variations among law firms.1
  • Explicitly prohibiting law firms and lawyers from discriminating on the basis of gender and race/ethnicity is a second element of Sterling and Reichman’s prescription for the future. They recommend an amendment to the Model Rules of Professional Conduct to specifically prohibit discrimination “both in the practice of law and in determining conditions of employment.” (P. 21.) Minnesota and New York already have adopted such a provision, and in New York the rule applies specifically to law firms as well as to lawyers. (Pp. 20-21.) While Sterling and Reichman do not specifically address the absence of regulation of law firms, as opposed to lawyers, in most U.S. jurisdictions, this vacuum presents a practical challenge to their proposal. Nonetheless, addressing discrimination by amending Rule 8.4, as they suggest, even if applied only to individual lawyers, would provide a basis for disciplinary action. This may be of more symbolic than practical significance, but perhaps the signal is important in itself.

In their closing remarks, Sterling and Reichman briefly identify the need for research in new directions, to “fill the gap in our knowledge of the inner workings of law firm practice.” (P. 21.) My hope is that they will continue to investigate lawyers’ careers while also pursuing new research on law firms as organizations. It is only by pursuing both lines of inquiry that the interaction and significance of individual and firm choices, policies and practices will be clear.

  1. In addition, research on non-law professional service firms may offer important comparative insight for purposes of understanding law firms and related practice organizations. One example is Paul Coombes’ study of women physicians, which suggests that women prefer certain practice areas and settings that offer certainty regarding scheduling and greater patient interaction. While current research on lawyers’ careers such as the After-the-JD research study does not support similar findings in law, this may reflect differences in fields related to the proportionate representation of women and the investment required for participation. []

How Are Professional Service Firms Governed?

The leadership role in law firms and other professional service firms (PSFs) tends to be either a residual characteristic or is defined by the “great man” ideal (think of Paul Cravath and his vaunted system). Modern versions exist still: the recently departed Joe Flom of Skadden and Marty Lipton of Wachtell were exemplars of visionary law firm leaders who created great law firms. However, since around 1985, PSFs and law firms have become more anonymous in their leadership as the bureaucratized firm supersedes the charismatic individual.

Usually when scholars study PSFs—and for purposes of this review I focus on law firms—the entire firm is the unit of study rather than its management or governance. If we think of Nelson’s Partners with Power, Starbuck’s Keeping a Butterfly and an Elephant in a House of Cards, or Wald’s Smart Growth: The Large Law Firm in the Twenty-First Century, leaders, senior partners, and others flit by, but they essentially subsist in an environment that is expressed as collegial and lacking in explicit hierarchy.

Despite the apparent nature of partnerships as collegially minded organizations sharing resources and profits motivated by the good of the common weal, the great recession of 2008 displayed a different aspect of firm leadership in PSFs. The reactions to the crisis showed management to be hard-headed and dirigiste when it came to laying off “redundant associates and partners.” In 2009, for example, Linklaters created its “New World” strategy to lose 120 lawyers and 150 support staff “to match the headcount of the firm to actual demand.” And by 2012, Linklaters was committed to its third round of restructuring in a decade. All of this is quite different from the “organic” days of Cravath.

Laura Empson, Professor in the Management of Professional Service Firms at Cass Business School, London, has spent the last three years studying this ignored aspect of PSFs and shows that leadership is a nebulous and fragile phenomenon in PSFs lacking the image of the “single heroic leader.” (P. 5.) Indeed, she says, without irony,

The problem with portraying yourself as a leader in a professional service firm is that your most valuable colleagues are likely to resent being cast as your followers. (P. 5.)

The converse of leaders is followers and where formal hierarchies are perceived not to exist the latter is a label that no one wishes to entertain. How then are management, governance, and leadership possible? Empson starts with partnership, which necessarily limits the exercise of formal power: primus inter pares in a law firm is not the same as being a CEO in a bank. Partners who become leaders find themselves in the perverse position of potentially losing power rather than gaining it. What gave them power—rain-making and work distribution—are set by the wayside as they assume positions of responsibility without much formal power. One question, which is not answered in Empson’s study, is do the most powerful rainmakers vie for executive power in firms or do they prefer to exert their influence more in the shadows? Furthermore, we don’t learn how particular lawyers decide to run for election. Her study focuses then on those who already occupy these managerial positions and the extent to which they can exert power.

Power here is plural, processual, and persuasive and is located within the “Leadership Constellation,” (Pp. 6-7) which consists of nodes that interact with each other. The key components are the senior executive dyad (senior and managing partners), heads of major practice areas (e.g., banking, litigation), heads of business services (e.g., HR, finance, IT), and key influencers (e.g., rainmakers and eminences grises). They are not a team but articulate the “informal power structure of the professional services firm.” (P. 8.)

Empson bases her research on an empirical study of three PSFs in law, consulting, and accounting. We are able to make occasional educated guesses on which is which. They are large and global with a mixture of eat what you kill to lockstep remuneration. Empson interviewed partners and had access to partnership agreements, board minutes, and records of leadership elections. A word of caution: Empson denatures her case studies in such a way that we aren’t sure if she is referring to a law firm or an accounting firm or anything else. This is necessary to keep them anonymous. But it means that we lack some of the rich, thick description that would really make the case studies fully comprehensible.

The report takes particular events in these PSFs and follows them chapter by chapter. In the first case, PSF A underwent an organizational crisis. The structure of PSF A gave no formal constitutional powers to the senior and managing partners nor to the Executive Board. Although partners were elected to these positions, they had to govern by their credibility and natural authority, or as Empson characterizes it: ambiguous authority. Beyond the senior dyad, management gets fuzzy. PSF A, however, celebrated this ambiguity since it enforced flexibility and went against dogmatism. It was a partnership that had grown together organically with relatively little lateral hiring.

The crisis came out of the global banking crunch. The senior and managing partners could see that work would decline and the partnership would have to shrink and be restructured. The question was: how to do it when there was no formal power outside a partnership vote? The leadership constellation was called on to analyse then recommend candidates for expulsion. It was a reiterative process that took months by which time a list had been drafted. Fifteen per cent of the partners were offered redundancy or de-equitization and all accepted the terms. The remainder of the partnership agreed.

Despite the resistance to formal hierarchy, there clearly was an inner circle of leaders, who through their social and cultural capital, were able to command influence and engineer results. The ambiguous authority cloaked a harmonious conflict. The senior dyad was able to steer the leadership constellation into believing in a plural system of leadership that had capacity beyond its individual components. One of the central reasons the strategy worked, according to Empson, is what she terms the “paradox of social embeddedness.” (P. 17.) The long-term organic nature of the firm had created high levels of trust between the partners through “intuitive working relationships” (P. 17), which reduced conflict and augmented active decision making.

Empson’s example of PSF C illustrates how leadership can fail when globalization runs amok in the firm without considering how different cultures might be integrated. The UK partners in particular were resentful because they thought they weren’t reaping any benefits from the expansion. This firm had a clearer leadership structure than PSF A with a chairman and CEO and an executive committee (Excom).

The chairman focused full-time on the global mergers, leaving the UK day-to-day management to the CEO. Excom seemed to be made up of warring factions with no sense of firm unity. The CEO reduced the size of Excom but those dismissed went to the chairman and were reinstated. No faction was pulling from strength.

Matters came to a head when the chairman resigned and an election was announced. Members of Excom put themselves forward as candidates but because of the dissension a group of firm elders organized meetings in which the candidates had to answer questions on their skills and responsibilities as chairman and the direction they would take the firm in. These meetings aired many complaints and began to salve the difficulties. The new chairman eventually came from outside the warring factions. He held one-to-one discussions with partners and he managed to rebuild trust. Although Empsom doesn’t say it, it appears the “outsider” was elected because he had no connection to the warring factions of the old Excom.

PSF C was a victim of its own inability to work in teams rather than the pressures of the outside world. Despite the breakdown PSF C finally recovered.

In other chapters, Empson explores the remainder of the leadership constellation and shows that all of its elements have important roles to play in the successful process of PSF leadership. One element that comes through in her study is the role of social embeddedness where trust has been built up over many years of working together. But as PSF C demonstrates, that trust can be easily lost. Ambiguous authority also enables leaders to “duck and dive” in their firm machinations, achieving results that may be more credible to the partners than if simply imposed from above, assuming they could be.

There is a similarity with some of Dezalay and Garth’s findings about notable international arbitrators in Dealing in Virtue. Effective leaders have to be highly respected, inspiring loyalty and commitment, able to build consensus, comfortable with ambiguity, yet not appear to want the position. Global professional service firms are now large organizations and therefore becoming increasing unwieldy to govern. PwC has over 160,000 professionals worldwide; DLA Piper has more than 4,000 lawyers, with the result that for some PSFs governance has to face up to the questions of formalized authority, constitutional power with consequent diminutions of ambiguity, collegiality and partnership. For Empson there are three overarching themes that emerge from her research. Firstly, power in ambiguity where structures are fuzzy can be effective as shown in PSF A. By contrast the leaders in PSF C, which had formal structures, found themselves effectively powerless. Secondly, social embeddedness is invaluable because of the trust it engenders; PSF C lacked this dimension but PSF A had it in full. Thirdly, political skills are absolutely necessary to hold the organization together even when politics is abjured as in PSF A. Yet we can ask if Empson’s study is one of an industry in transition to a new, less democratic age or a cri de coeur for a golden age past?