How to Guarantee Your Practice Fails

I recently read an article in BusinessWeek about the problems facing large law firms and why these firms are imploding at an alarming rate (“Law Firms’ White-Shoes Blues,” Paul Barrett 4/18/12).  After a conversation with a friend who was just laid off from her associate position at a small firm, I realized that the face of our profession is changing. Large and small firms alike are going under not just because of the crippled economy, but because firms of all sizes are failing to adapt to the changing times, preferring instead to cling desperately to “the way things have always been done.”

The BusinessWeek article explained that lawyers originally commanded high fees because they usually dealt with highly complex transactions. That billing rate has historically been maintained, supported by law school tuition rates which remain astronomical and all but require graduates to charge high fees in order to repay student loan debt. The recent and ongoing wave of unemployed law school graduates filing suit against their alma maters for false advertising should be a clear indicator that something is seriously wrong. For decades, law schools have courted college students with the promise of a secure, lucrative career almost immediately upon crossing the graduation stage.  What new graduates are actually finding is a job market flooded with lawyers, all of whom share the same expectation. Those who are lucky to land jobs are usually disappointed at what is now considered a “competitive” salary. Some graduates are even accepting positions as paralegals just to make ends meet.  Even those who are gainfully employed struggle to make their student loan payments in a system that prohibits them from discharging such oppressive debt in bankruptcy. Our system will forgive debt incurred while taking extravagant vacations, electing to have plastic surgery, or purchasing luxury vehicles but has no sympathy for people who sought higher education to better their lives and the lives of their families and who, because of the state of the economy and the industry they were romanced by, cannot repay their debt.

My friend who got laid off illustrated some of the problems in our professional culture when she described her boss. He had been practicing for over two decades and had enjoyed a time, following the publicizing of a large favorable verdict, during which he stayed busy with no marketing effort.  Said publicity has long since become yesterday’s news and his business is evaporating, yet the partner still believes that his former notoriety alone should garner enough clients to keep the firm afloat.  He refuses to market, denied my friend her repeated requests for a meager marketing budget so she could help bring in clients, and prohibited her from accepting any cases outside the firm’s one practice area.  He is at the helm of a sinking ship and, despite holding a bucket in his hand, refuses to bail out any water.

This story is, unfortunately, not unique.  So many firms, large and small, run by old-school devotee lawyers, are failing for the simple reason that the lawyers in charge insist on doing things the way they always have in a climate that no longer supports such rigidity.

Lest I give the impression it’s all bad news, there are firms that are succeeding. Almost without exception, they are the firms who take good care of their clients, are agile enough to respond to clients’ changing needs and demands, and who realize that the days of sitting back with their feet up in a corner office waiting for the phone to ring are long gone.  I believe the one thing the successful firms have in common are that they put their clients first.

In years past, clients needed lawyers more than lawyers needed clients. The relative shortage of lawyers meant the lawyers could command higher fees, which continued to climb to near unfathomable heights.  These days, the internet has empowered clients to do their homework, know what they need, and often perform self-help legal services. While no lawyer in his right mind would recommend that clients handle their own legal work, the reality is that much of the legal work traditionally entrusted to lawyers by deferential clients is now being handled by websites or by non-attorney “professionals” clearly engaged in the unauthorized practice of law.  Clients develop the (somewhat deserved) impression that lawyers are shysters who are solely focused on the bottom line.  This is one of the myriad of reasons people hate lawyers.  The firms succeeding in this climate are those who are able to communicate to clients the value a “real live lawyer” provides over such alternatives, and who actually deliver the value when clients agree to the fee.

In short, I believe the future of the legal profession will be shaped by those firms and lawyers who prioritize client service.  As lawyers hanging a shingle in this market, we have an invaluable opportunity to change people’s minds about what we do, how we help, and why we are truly needed.  Together, we can restore the respect people once had for lawyers, by making our clients our priorities.

We are at the precipice of a sea change in the legal profession.

Let’s not screw it up.