Law School or Not?

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A little off the normal subject, but we will get around to fees eventually. Would or should you recommend a child or a friend’s child going to law school these days?

There has been a change in the legal profession over the past few years. As the housing bubble burst and the economy slowed down, things have happened in law schools great and not so great. Graduates stopped getting jobs that paid wages with little tie to the general economic forces.

New lawyers with little legal value to add to the work done for clients were being paid wages greater than the professors who taught them what they knew. Law firms apparently were buying into the concepts promoted by author Malcolm Gladwell’s book Outliers, where expertise comes in the early immersion into a field. Sometimes considered the 10,000 hour rule, a person has a chance to become extraordinary at a subject after spending more than 10,000 hours working on the skill.

One firm is alleged to demand 3,000 billable hours from its young lawyers. A legal billing expert, John Conlon asserts that a lawyer will normally spend about 3 hours in the office for every two billable hours properly produced. With the firm apparently requiring 4500 hours out of the total annual 8760 hours (8784 during the leap year), 51.3% of the year must be at the office.

I am not an alarmist, and I do not think the legal profession is falling apart. Thirty years ago people were making the same kinds of claims, such as there are too many law students, the law students are spending too much money going to law school, they are taking on too much debt, and there are not enough good jobs to feed all the graduates. I trust the marketplace over the long haul. Yes Congress has recently made the debt nondischargeable, and the amounts are bigger than they were (my educational debt was about 1/2 my first year wages). And for the recent graduates, it is tough out there. Many will leave the field of law, but they leave it with an education that will benefit them in whatever they do.

Good law grads are now moving into positions that mediocre lawyers once took, and that is good for the retail clients who need legal services. When the best and brightest went into wholesale law (working on projects that affected small parts of business operations) the retail practice (dealing with the people who actually live with the result of the legal service) suffered. Now it should get stronger, and that is good for the clients.

What does this have to do with fees? Excess supply of a fungible product drives prices down. Legal services are marginally fungible, in that for some things it does not pay to have the best and brightest. The fees for those fungible services are now more negotiable, and trending flat. The more expertise a lawyer has in the field, approaching the Outlier standard, the more value the lawyer brings to the client, and the fees are holding steady or moving up.

I might recommend to a high school student to keep the law as one option, but for the college junior I may suggest culinary school. It seems to be a good choice for the short run. Law school can wait and many good schools want students with real life experience. Having worked in a restaurant a few times, I know the owners and managers learn how to work and work hard. That is the true skill a potential law student needs to know coming into law school.

addendum

A great new article came out in the January 2012 American Bar Association Journal, written by Professor Bill Henderson at Maurer Law, and Rachel Zahorsky of the Journal.  It focuses on the economics of the law student loan programs and future of the profession. The Law School Bubble focuses on the issue from a different angle.  Good job Bill and Rachel. 12-30-11

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Who is the experienced one: When the client meets the lawyer

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If the lawyer is a professional in her relationship with a potential client, shouldn’t she show it by demonstrating her knowledge of the issues and the scope of the client’s legal matter by setting a proposed legal fee for the representation that she can stand behind?  A firm fee in an amount where the lawyer makes a good living for the work done, and the client can count on the fee as quoted?

As a lawyer, I need to share my professional judgment and knowledge with each potential client, to educate the potential client about the scope of the problem they are faced with, whether a lawsuit or a business transaction. Often a client thinks that the legal matter is easier to handle than my prior experience has taught me that it will turn out.  It is my duty and challenge to explain and make clear the scope of the issues involved. If I can do that, and the client realizes the potential issues that need to be tackled, then I should be able to price the legal services, to a reasonable degree if the scope of the services offered are not required to change.

If the client cannot see the potential issues or scope of complexity that will or could happen, then we may not get to an agreement for representation. There are times when a potential client gets sticker shock, cannot believe that the legal issue could cost as much as I  offer to handle the issue for. I will lose some of those clients, but they do have a good sense of what the scope of the case is, and on occasion I have had that person come back to say that I had a better explanation than the next lawyer they talked to, so I get hired. Then I have an educated client who has faith in my understanding of the matter, and a fee that finally makes sense.

The final question is whether I have a duty to price my services so the client can afford them? For most people affordability is a choice of priorities.  Is the legal issue more or less important than other expenses in the client’s life? That is a matter for the client to decide. I can change the value of the legal services, to a small extent.  I am bound by the Rules of Professional Conduct, and the skills I apply cannot be reduced even if the price is reduced, but there may be things we might be able to do, such as operate on a “no deadline” basis for your work.

My experience as a consumer and as a provider of legal services is that the client who disagrees about the importance of the work I am asked to do will not agree about the important aspects of the services I provide. A potential client who wants to have a million dollar estate plan crafted for the price of a ten thousand dollar estate plan will not be satisfied with either the product or the price, if I were to agree. Don’t worry though, I won’t.