Professional Responsibility/Legal Ethics Outline

Professional Responsibility, Law Firms & Legal Careers 629
Professor Karl Lutz

Part I: The Changing Legal Landscape — things are changing and they are changing at an accelerating pace
I. History:
-in the law firm of old, you would graduate, go to a firm, make partner and be with that firm for your entire career: would not have much idea about the firm; in early years, did menial tasks (like those which the paralegals and assistants do today)
-lawyers took pride in their profession: i.e., had longstanding and close relationships with clients; law firms were smaller; people knew each other; being a partner was special; made decent incomes and knew nothing about what others made; were respected members of communities; seldom considered other careers
II. Recent developments that changed this situation:
A. information explosion: until 1977 (i.e., the Bates case), lawyers were not permitted to advertise; after the decision, it was okay to have information out there; The American Lawyer came shortly thereafter — everything about a law firm is now just out there for everyone to see; with information, there is more competition (for associates, for clients, etc.)
B. technology: must utilize to get things done very quickly; increases competition to be a good service industry; speed is possible and expectations about the services increases
C. consolidation: fewer firms out there; firms followed the national trend to consolidate; clients want law firms that can solve all of their problems — one-stop shopping
D. globalization: formerly, the law was a domestic business; now, businesses are globalized and so law firms must be also
III. Recent history — the changing economy:
A. 1999: law firm’s best year ever; record growth; dot com and hi-tech company success; stocks increase in value; hot new legal market places — northern Virginia and Silicon Value; law firms have more business than they can handle; associates demand more of pie; work incredibly hard; lots of lawyers are leaving the law firms — working for dot coms, etc.; out in west, Gunderson increases salary to $125,000 and $20,000 guaranteed bonus; other firms follow across country; problem — not all firms across the country can afford this increase in salary; will pay this large salary, but associates will have to work 2200 or 2400 hours
B. fall 2000: firms are still riding the euphoria; hire tons of associates
C. end of 2000: the numbers begin coming in; they are quite disappointing; firms begin to be concerned that demand is down and have a huge class of associates and summer associates
D. 2001: stuff is starting to hit the fan; dot coms are laying off lots of people; companies are trimming, laying off, cutting back, restructuring; nasdaq goes into free-fall; law firm work starts to dry up; lawyers are staying at firms and not leaving; one firm offers unpaid vacation with benefits; one offered to pay summer associates for doing community service; firms predict no year-end bonuses; more difficult for 3l’s to get jobs — will want their summer associates; more difficult for 2l’s to get jobs — will have smaller summer associate classesb

Part II: Culture of Law Firms
I. Billable Hours
-billing at 2400 hours/year is actually 3000 hours/year at the office (60 hours/week, 10 hours/day, 6 days a week)
-1600 billable hours/year is actually 2000 hours/year at the office (40 hours/week, 8 hours/day, 5 days a week)
-most law firms do not pay 100% based upon the hours that an associate bills: if do, creates an incentive to pad hours and wear oneself out working crazy hours; asks the associates to focus on the wrong thing
-in most firms in New York, is total lock-step: all associates make the same base salary with the same bonuses; has been prevalent across America for a long time
II. Culture/Lifestyle
-law firms have certain cultures: they attract and incentivise individuals who all have the same working lifestyle
-we are all different and all have different values: correspondingly, all firms have their own approach to what is valued for compensation
-firms are different: lock-step is different than complicated formulas; different firms value different things; make sure to understand what a firm is about when talking to them about a job; through compensation, it shows you what a firm is all about; should join a firm with a set of values like your own

Part III: Associate Issues
I. Recruiting
-firms must decide how many associates want to hire: firms want to take all of their full-time associates from their summer class; do not want to have to interview in the third-year market
-different ways to hire:
1. by department
2. by entire firm
*tell you something about how the firm is run (i.e., how cohesive), advancement is tied either to the firm or the department, flexibility to move, different subcultures by department
-many firms have minimum grade requirements: may