If law firms want young hotshots who can walk off campus and onto a merger case, they'd better sit down with the nation's top law schools and explain that the days of on-the-job training are over.
American law schools are suffering a bit of an image problem. Thanks to a determined group of writers known as "scam bloggers," it's now an open secret that many schools admit far more students than will ever be able to find jobs after graduation. These students often leave campus with six figures of debt and, as a New York Times article argued this weekend, no ability to actually practice law.
The piece, by David Segal, delves into an issue that for years has been accepted as a fundamental fact of life in the legal industry: Law schools teach students how to think like a lawyer, but not how to be one. It's the difference between being able to parse a 19th century decision on states' rights to regulate waterways and being able to walk a corporate client through a major merger. They're almost entirely different skill sets.
Until the recession, nobody treated that as a problem. But now, law firms are facing unprecedented challenges to their business models, and law school graduates are facing the worst job market in memory. A lot of people suddenly care what skills J.D.'s learn in class.
Yet, if law students aren't learning what they need in order to succeed as real live lawyers, it's not fair to lay all the blame on academia. Law firms have been guilty accomplices. And in the end, it's the firms who are going to need to force change.
How? It's time to stop hiring students from Harvard Law. Or at least threaten to.
WHAT THE RECESSION DID TO THE LAW FIRMS
First, it helps to understand how the system used to work, and why it's breaking down. In a way, we're seeing a story play out that has been repeated over and over since the 2008 financial crisis. When credit was cheap and corporate profits were enormous, it was easy to neglect structural problems in any number of industries. Now, those problems can't be ignored.
In the past, what a law school graduate did or didn't know about his profession wasn't particularly important. If he was smart and knew the fundamentals of legal research and writing, he was useful. That's because law firms had the luxury of charging their clients for time that was essentially spent teaching first and second year associates the basics of how to practice.
Now, as The Wall Street Journal pointed out in October, corporations are less and less willing to subsidize that on-the-job training. A survey of in-house legal counsel found that more than 20% of companies had started refusing to pay for work by first and second year attorneys on at least some matters. That number is likely to grow. When your legal department budget is getting squeezed, paying your law firm to train its employees just isn't much of a priority.
Unfortunately, that has ripple effects throughout the legal economy. For law firms, that shift in priorities has whittled down a significant source of profits. Some have responded with apprenticeship-like systems. But for most, it means they simply have less money to hire young associates (or, more accurately, less money to hire associates while paying out profits to partners). That pushes students who would have gone to firms into government and public interest jobs. In the meantime, J.D.'s who can't find any employment also don't have the wherewithal to open their own practice.
Note the role played by firms in this scenario. For years, they simply bought whatever law schools were selling. Instead of expecting the schools to teach J.D.'s practical skills, they treated them as glorified head-hunting services from which they could draw raw talent. Even when schools offered up programs such as legal clinics, which let students represent underprivileged clients under the supervision of a licensed attorney, the response from the industry was minimal. To this day, hiring partners at elite firms still mostly look for students with high GPAs and law journal experience--experiences that, as Megan McArdle would tell you, were probably pretty similar to their own.
So firms have reinforced the very education system they now say falls short. The schools haven't had an incentive to rethink their model. And while the bad press may force reform around the edges, it's hard to imagine the legal academy making wholesale changes on its own accord. After all, it's been working on the same basic model for more than a century.
No. To change the schools, law firms need to change their own behavior.
PRESSING HARVARD LAW
And that's where Harvard comes into play. Imagine what would happen if a coalition of elite law firms approached every Ivy League law school and gave them an ultimatum: Change your curriculum, or in five years we will stop hiring your graduates. They could just as easily go to a group of lower-ranked law schools and offer to start hiring more graduates if they make the same curriculum changes. It would require accepting the possibility of hiring outside of the most elite institutions. But frankly, that might add some much needed diversity to firms anyway.
I imagine the results would be dramatic. In the end, the most important thing to a law school's reputation these days is who hires its students. And where the Ivies go, the rest of legal academia will go.
You might ask, isn't there already an organization that's capable of doing this? Well, yes. Technically. The American Bar Association is responsible for accrediting law schools and setting academic standards. But frankly, it's a glacial institution. You're more likely to get a deficit bill from Congress than a serious education reform effort from the ABA.
So it's on the firms to take a stand. Either they provide an incentive for schools to make serious changes to their curriculum, or you can expect law schools of the future to look much like law schools of today.