In-House Counsel, Law Schools, Media and Journalism, New York Times, Student Loans

Inside Straight: Whiffing At The NYT On The Future Of Legal Education

Columnist Mark Herrmann, an in-house lawyer and former law firm partner, offers his thoughts on reforming legal education.

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I reported back in October that the New York Times had asked me to write an op-ed piece about the future of big law firms, but a Dealbook special unceremoniously preempted my piece.

I figured the editor at the NYT might think she owed me one, so I cranked out a replacement piece proposing to reform legal education. I’m pleased to report that this op-ed piece was not preempted! No, no, no: It was rejected on the merits. The editor said that my article made too many points and felt like a “report, rather than an opinion piece.”

But she was wrong. And, in any event, you should judge for yourself.

So here’s my recently rejected op-ed piece proposing how we should reform legal education. (I do believe this is the last in my short-lived series of “crap I wrote for the Times that the Times didn’t publish.” It’s an awful lot of work to produce 1,200-word pieces that become mere fodder for another column here at Inside Straight.) . . .

The American legal system faces three inter-related crises – one apiece facing law students, law schools, and law firms. With a single bold stroke, academia, legal employers, and the American Bar Association could begin to solve all three of these problems simultaneously.

The issue confronting law students is that the price of a legal education has grown exponentially in recent years. In 1980, the cost of a legal education was comparable to other types of graduate-level training, and most law students graduated with little or no debt. By 2011, those same three years of law school often cost more than $150,000. The amount of debt law students are assuming to pay for their educations has similarly skyrocketed – to an average of more than $100,000 per student.

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Debt can of course be managed if one has the resources to pay for it. But law students who successfully chase one form of paper – a diploma – may be less successful chasing another – a paycheck. Only 55 percent of recent law graduates now find full-time jobs that require a law degree, and that situation will not improve any time soon. While law schools crank out roughly 45,000 new graduates annually, employers are likely to hire only 22,000 new lawyers each year for the next decade. This will leave many recent graduates unemployed and unable to pay their monstrous law school debts. Although Professor Kingsfield had the wrong reason in mind, he was entirely correct to offer Mr. Hart “… a dime. Take it, call your mother, and tell her there is serious doubt about you ever becoming a lawyer.” In today’s job market, those words ring all too true.

Those economic realities pose problems not just for law students, but for law schools, too: Law schools are producing too many lawyers, at too high a price. Some law schools (such as the University of California, Hastings College of the Law) are affirmatively shrinking the sizes of their entering classes to restrict the production of new lawyers. But those baby steps are unlikely to suffice; experts predict that law schools will fail in increasing numbers over the coming years as prospective students realize that playing the law school game is no longer worth the economic candle.

Despite the length and cost of a legal education, the end results are seemingly unimpressive. Many law firms complain that recent graduates have been trained only in theory, and they lack the clinical skills needed to actually practice law. Clients have echoed that refrain: Many now refuse to pay for time worked by first- or second-year law firm associates, because clients are convinced that the hours charged by those new lawyers add only cost, and not value, to the services rendered. Law firms – many of which now find themselves with an overcapacity of lawyers in a time of decreased demand for traditional legal services – are thus caught on the horns of a dilemma: They can choose to suffer either the reputational damage caused by laying off new lawyers or the economic loss caused by continuing to employ at high cost new lawyers who are neither productive nor profitable.

What’s a legal system to do?

Law school deans, law firm managing partners, and the ABA should hold their collective breaths and take a plunge across the Atlantic Ocean. Although the English system (of both law and legal education) is not exactly analogous to ours, there are lessons to be learned there. In England, students can obtain law degrees as part of an undergraduate program, but they then sign on as apprentices – “trainees” – at law firms for another two years of education before the students qualify as solicitors. Unlike newly minted American associates who earn $160,000 per year at white shoe law firms, those trainees are paid a substantially reduced salary – ranging from about £20,000 to £40,000 (or $30,000 to $60,000) – for their first two years of work experience, which are also their last two years of legal education.

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Think what a similar approach would achieve in the United States: For students, the cost of law school would decrease by one-third, dramatically reducing both the economic cost (tuition) and the opportunity cost (foregone employment) of attending law school. Students would graduate with less debt and would enter the work force – and begin to pay off their debts — more quickly.

For law schools, shortening a legal education from three years of classroom education to two would cause some short-term economic distress, as schools would forfeit one-third of their tuition revenue. But schools would also pass on to law firms some of the more expensive parts of legal training – the one-on-one sessions needed to teach students legal writing, or the clinical programs in which small groups of law students now practice law under the close supervision of lawyers. If law schools instead focused on what they do best – a single professor using the Socratic method to teach a large class of students how to analyze cases – those schools could teach students the fundamentals of law at relatively low cost.

How would this reformed model of legal education affect law firms? Instead of hiring largely untrained lawyers for $160,000 per year and trying to convince clients that those pretenders are lawyers, the firms could be more honest. Firms would concentrate on training the new lawyers for one or two years, would pay an apprentice’s salary of only roughly $50,000 per year, and would thus be able to charge out the trainee’s time at substantially reduced rates, which clients might be willing to bear.

Moreover, an apprenticeship system may offer tangential benefits to both firms and students. Law firms now hire beginning lawyers on the basis of essentially no information. Firms see a student’s law school grades – hardly a perfect predictor of professional talent – and may have worked with the student during a six-week summer internship — hardly sufficient time to get a true sense of an aspiring lawyer’s skills. If firms instead worked with new lawyers during an extended apprenticeship, the decision whether to offer those lawyers full-time employment at the end of the apprenticeship would be far more informed.

Students, too, might benefit in unexpected ways. The brightest stars among recent law school graduates – those who have multiple job offers from which to choose — now often select their employers based largely on two factors (other than geography): Does the law firm pay the “going rate” of $160,000 per year in salary, and is the firm sufficiently “prestigious” in the eyes of either the student or the various law firm rankings? Almost no one chooses to work for a law firm because the firm is known to have an outstanding training program.

If students were selecting firms based in part on the training the firms provided, some law firms might choose to build reputations for themselves – and attract superior job applicants – by providing great training. Increased competition in the field of legal education could hardly be a bad thing.

Law students, law schools, and law firms are all now suffering under our current system of legal education. By shortening law school to two years of classroom training, but then requiring an apprenticeship at a law firm to complete the education, the legal establishment could reduce the debt load imposed on students, avoid the impending demise of many law schools, and rationalize the salary and billing structure for new associates at law firms.

Maybe Mr. Hart could become a lawyer, after all.

Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at [email protected].

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