Supply, demand, and the changing economics of large law firms

Stanford Law Review

Volumn 60, Issue 6, 2008, Pages 2087-2130

  Bruck, Andrew ^a   Canter, Andrew ^a,b  

^a STANFORD LAW SCHOOL   (United States)

^b HARVARD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 49149111643     PISSN: 00389765     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (275)

1. MARC GALANTER & THOMAS PALAY, TOURNAMENT OF LAWYERS 3 (1991).
2. Id. at 24.
3. Id. at 20-36; see, e.g., ABA, AT THE BREAKING POINT: A NATIONAL CONFERENCE ON THE EMERGING CRISIS IN THE QUALITY OF LAWYERS' HEALTH AND LIVES - ITS IMPACT ON LAW FIRMS AND CLIENT SERVICES (1991);
4. WALT BACHMAN, LAW V. LIFE: WHAT LAWYERS ARE AFRAID TO SAY ABOUT THE LEGAL PROFESSION (1995);
5. MARY ANN GLENDON, A NATION UNDER LAWYERS: HOW THE CRISIS IN THE LEGAL PROFESSION IS TRANSFORMING AMERICAN SOCIETY (1994);
6. ANTHONY T. KRONMAN, THE LOST LAWYER: FAILING IDEALS OF THE LEGAL PROFESSION 2 (1993) ("Disguised by the material well-being of lawyers, it is a spiritual crisis that strikes at the heart of the profession's pride.");
7. Laurence H. Silberman, Will Lawyering Strangle Democratic Capitalism?: A Retrospective, 21 HARV. J.L. & PUB. POL'Y 607, 611-12 (1998);
8. Michael Ding, Bar Association Leader Critiques Legal Profession, STAN. DAILY, Nov. 9, 2007, http://daily.stanford.edu/article/ 2007/11/9/barAssociationLeaderCritiquesLegalProfession.
9. For other examples of how scholars have considered the benefits of declining legal professionalism, see Russell G. Pearce, The Professionalism Paradigm Shift: Why Discarding Professional Ideology Will Improve the Conduct and Reputation of the Bar, 70 N.Y.U. L. REV. 1229 (1995).
10. See, e.g., Ronald J. Gilson, The Devolution of the Legal Profession: A Demand Side Perspective, 49 MD. L. REV. 869, 899-03, 916 (1990).
11. Robert Eli Rosen, The Inside Counsel Movement, Professional Judgment and Organizational Representation, 64 IND. L.J. 479, 491-92 (1989).
12. Gilson, supra note 5, at 916.
13. We intentionally avoid a precise definition of "elite" law students. Graduates of the "top fourteen" law schools, as ranked by U.S. News & World Report, are heavily recruited by law firms, although some employers may prefer hiring a top student at a lower-ranked school than a poor student at a "T14" school." The top fourteen are: Yale, Stanford, Harvard, Columbia, New York University, University of California, Berkeley, University of Chicago, University of Pennsylvania, University of Michigan, University of Virginia, Cornell, Northwestern, Duke, and Georgetown. U.S. NEWS & WORLD REP., AMERICA'S BEST GRADUATE SCHOOLS: SCHOOLS OF LAW 46 (2008), available at http://gradschools.usnews. rankingsandreviews.com/grad/law/search. Students at less prestigious schools rarely enjoy the same luxuries. Indeed, the gap between the haves and the have-nots among recent law school graduates is startling.
14. Distribution of 2006 Starting Salaries: Best Graphic Chart of the Year, Post of Bill Henderson to Empirical Legal Studies, http://www.elsblog.org/ the_empirical_legal_studi/2007/09/distribution-of.html (Sept. 4, 2007, 3:29 PM);
15. see Greg Bums, Two Lawyers Walk Into a Bar . . ., CHI. TRIB., Apr. 8, 2008, http://www.chicagotribune.com/ features/chi-lawyers-money-burns-story,0,6001085.story.
16. Ian Shapira, No Objections Here; Supply-and-Demand Has Top Law Firms' 'Summer Associates' Hitting Pay Dirt Without Breaking Much of a Sweat, WASH. POST., July 24, 2007, at B01.
17. Nathan Koppel, Courting Shell, AM. LAW., June 24, 2004, http://www.law.com/jsp/article.jsp?id=1087855518341.
18. Mark Chandler, Address at Northwestern School of Law's Annual Securities Regulation Institute (Jan. 2007), available at http://blogs.cisco.com/ news/2007/01/cisco_general_counsel_on_state.html;
19. see also Law Firms: The Last Vestige of the Medieval Guild System, Posting of Peter Lattman to Wall Street Journal Blog, http://blogs.wsj.com/law/ 2007/01/29/ciscos-gc-on-law-firms-the-last-vestige-of-the-medieval-guild-system (Jan. 29, 2007, 3:29 PM).
20. Chandler, supra note 11 ("The current system also misserves the lawyers themselves, particularly the associates, also known as the next generation of partners. In most of my major law firms, I see more and more problems retaining associates. I am inundated with resumes of top notch associates who don't want to work in large law firms any more."); see also Ashby Jones, More Law Firms Charge Fixed Fees for Routine Jobs, WALL ST. J., May 2, 2007, http://online.wsj.com/article/ SB117807097221289055.html.
21. Press Release, Yale Law Women, Yale Law Women Releases 2nd Annual List of the Top Ten Family-Friendly Firms (Sept. 24, 2007), available at http://www.yale.edu/ylw/Top_Ten_Press_Release_2007.doc.
22. Yale Law Women, Methodology Used to Compile Top Ten Family-Friendly Firms 2007-2008, http://www.yale.edu/ylw/Methodology.htm.
23. Press Release, Yale Law Women, supra note 13.
24. Andrew Bruck & Andrew Canter, Transparency as Advocacy, NEW LAW., Nov. 21, 2007, at 5.
25. Chandler, supra note 11.
26. ALEXIS DE TOCQUEVILLE, 1 DEMOCRACY IN AMERICA 283-90 (J.P. Mayer, ed., George Lawrence trans., Doubleday 1969) (1835);
27. see also ERWIN O. SMIGEL, THE WALL STREET LAWYER: PROFESSIONAL ORGANIZATION MAN? 12-13 (1964);
28. Russell G. Pearce, Lawyers as America's Governing Class: The Formation and Dissolution of the Original Understanding of the American Lawyer's Role, 8 U. CHI. L. SCH. ROUNDTABLE 381, 395 (2001).
29. RICHARD L. ABEL, AMERICAN LAWYERS 42-43 (1989).
30. Carrie Menkel-Meadow, Culture Clash in the Quality of Life in the Law: Changes in the Economics, Diversification and Organization of Lawyering, 44 CASE W. RES. L. REV. 621, 624-29 (1994).
31. This structure created an "up or out" system, whereby those elevated to partnership received lifetime tenure at the firm and those not promoted had to find employment elsewhere.
32. See Leigh Jones, Starting Pay at Top Firms Falls Farther Behind Partners, NAT'L L. J., Feb. 9, 2007, http://www.law.com/jsp/llf/ PubArticleLLF.jsp?id=1170842572765;
33. Kellie Schmitt, Is Leverage Overrated?, RECORDER, Dec. 8, 2005, http://www.law.com/jsp/article.jsp?id=1133949910389 (discussing conflicting views on optimal leverage ratios for maximum profitability).
34. Niki Kuckes, The Hours: The Short, Unhappy History of How Lawyers Bill Their Clients, LEGAL AFF., Sept/Oct. 2002, http://www.legalaffairs.org/issues/September-October-2002/ review_kuckes_sepoct2002.msp.
35. See Charles Reich, Cravath Veteran Recalls Law Firm Life of Yesteryear, AM. LAW., Dec. 17, 2007, http://www.law.com/ jsp/llf/PubArticleLLF.jsp?id=1197626690782.
36. In 1957, seventy-one percent of the partners in the twenty largest Wall Street firms had graduated from Harvard, Yale, or Columbia Law Schools. SMIGEL, supra note 18, at 39.
37. Eli Wald, The Rise and Fall of the WASP and Jewish Law Firms, 60 STAN. L. REV. 1803 (2008).
38. GALANTER & PALAY, supra note 1, at 41, 43.
39. Peter W. Bernstein, The Wall Street Laywers Are Thriving on Change, FORTUNE, Mar. 13, 1978, at 104.
40. GALANTER & PALAY, supra note 1, at 46.
41. Id. at 40 n.22.
42. Abram Chayes & Antonia H. Chayes, Corporate Counsel and the Elite Law Firm, 37 STAN. L. REV. 277, 277-78 (1985).
43. Aric Press et al., The Highest Legal Fees, NEWSWEEK, Aug. 24, 1981, at 71.
44. Bernstein, supra note 28 (noting that estimates in 1978 indicated that the hourly cost for work performed by in-house counsel averaged $41, compared to $79 per hour for outside legal counsel).
45. Kuckes, supra note 23; see ABA COMM'N ON BILLABLE HOURS, ABA COMMISSION ON BILLABLE HOURS REPORT 3 (2002), available at http://www.abanet.org/careercounsel/billable.html.
46. ABA COMM'N ON BILLABLE HOURS, supra note 34, at 3 ("Law firm consultants were advocating the keeping of time records by suggesting that lawyers who kept accurate time records and billed by the hour made more money."); Kuckes, supra note 23; Douglas McCollam, The Billable Hour: Are Its Days Numbered?, AM. LAW., NOV. 28, 2005, http://www.law.com/jsp/ihc/PubArticleIHC. jsp?id=1132653918886. Clients also preferred hourly billing, since they could easily understand the product - an hour of work - and because billable hours were relatively easy to fit into existing performance measurement systems: it's easy to plan for 50 hours at $250 an hour and set the budget for $12,500.
47. Robert E. Hirshon, Law and the Billable Hour: A Standard Developed in the 1960s May Be Damaging Our Profession, 88 A.B.A. J. 10 (2002);
48. see Thomas L. Sager & Steven A. Lauer, The Billable Hour: Putting a Wedge Between Client and Counsel, L. PRAC. TODAY, Dec. 2003, http://www.abanet.org/lpm/lpt/articles/nosearch/ fin12032_print.html ("It fit well into an accounting-based approach to managing legal service and therefore was well accepted in the 1950s and 1960s.").
49. Goldfarb. v. Va. State Bar, 421 U.S 773 (1975).
50. Scott Turow, The Billable Hour Must Die, A.B.A. J., Aug. 2007, http://www.abajournal.com/magazine/the_billable_hour_must_die/print..
51. Bates v. State Bar of Ariz., 433 U.S. 350 (1977).
52. GALANTER & PALAY, supra note 1, at 70-71.
53. As Steven Brill, the founder of The American Lawyer, said, the new paper was "about lawyers, not law." John A. Conway, Love Those Lawyers, FORBES, Aug. 21, 1978, at 10;
54. see also Lawyers; Gossip, ECONOMIST, Sept. 30, 1978, at 49. A third paper launched at the same time, Legal Times, but the Washington-based publication was more focused on regulatory law and other developments in the nation's capital than on gossip and personalities. Id.
55. Bruce A. Green, Professional Challenges in Large Firm Practices, 33 FORDHAM URB. L.J. 7, 13,22-23 (2005).
56. Darlene Ricker, Greed, Ignorance, and Overbilling: Some Lawyers Have Given New Meaning to the Term 'Legal Fiction, ' 80 A.B.A. J. 62, 65 (1994).
57. See, e.g., Nathan Koppel, Fatal Vision: How a Bid to Boost Profits Led to a Law Firm's Demise - Tax Shelters Paid Off for Jenkens & Gilchrist, Until IRS Took Interest, WALL ST. J., May 17, 2007, at A1.
58. In other words, approximately twenty-five billable hours per week. JOAN C. WILLIAMS & CYNTHIA THOMAS CALVERT, SOLVING THE PART-TIME PUZZLE: THE LAW FIRM'S GUIDE TO BALANCED HOURS 11 (2004); see also McCollam, supra note 35 ("As a baseline, consider a study by the ABA in 1958 when billable hours were first coming into vogue. It found that mere were approximately 1,300 fee-earning hours in a year (that assumption included working half-day Saturdays).").
59. Patrick J. Schiltz, On Being a Happy, Healthy, and Ethical Member of an Unhappy, Unhealthy, and Unethical Profession, 52 VAND. L. REV. 871, 891 (1999);
60. see WILLIAM G. ROSS, THE HONEST HOUR: THE ETHICS OF THE TIME-BASED BILLING BY ATTORNEYS (1996).
61. Schiltz, supra note 45, at 893. Keep in mind that it takes more than 2000 hours at work to produce 2000 billables. Not all time in the office is billable: grabbing coffee, taking a bathroom break, and speaking to one's significant other are all non-billable. Id. at 894. Yale Law School's Career Development Office advises its students that they will have to work approximately 4 hours to generate 3 billable hours. YALE LAW SCH. CAREER DEV. OFFICE, THE TRUTH ABOUT THE BILLABLE HOUR (2007), available at http://www.law.yale.edu/documents/pdf7CDO_Public/cdo- billable_hour.pdf. Judge Schiltz and others place this ratio at 3 hours worked for every 2 hours billed. Schiltz, supra, at 894 (citing several other sources finding similar ratios).
62. Kuckes, supra note 23.
63. Id.
64. A growing number of associates were entering a tournament they would not win or did not want to win. As they recognized that only a handful of them would ever achieve the financial payout of partnership, they began demanding more money up-front. David Lat, Partners vs. Profit, N.Y. OBSERVER, July 24, 2007, http://www.observer.com/2007/n-y-law (quoting Mark Galanter, co-author of Tournament of Lawyers, that "[a]s the odds of getting the prize [of partnership] go down, and the prize itself is somewhat compromised by the fact that partnership now comes without the real guarantee of tenure, the present value of the prize goes down. Then people say, 'O.K., if I'm not getting this big prize, I want more cash now.'");
65. see also Elizabeth Goldberg, Midlevel Blues, AM. LAWYER, Aug. 2006, at 98 (commenting on the generational change in the newest generation of lawyers who do not see themselves committed to law firms' partnership tracks);
66. Amy Kolz, Don't Call Them Slackers, AM. LAW., Oct. 2005, at 114 (detailing the results of a survey about associate work habits, in which they express their views that partnership prospects are dim and thus the role of an associate should be more fulfilling and rewarding). It looks as though associate complaints that it is harder to make partner are true, at least in 2006 and 2007. A recent survey of law firms found that in 2006 and 2007 law firms promoted relatively fewer attorneys to equity partner than in years past.
67. Dan DiPietro, Storm Warnings, AM. LAW., Dec. 2007, at 75 ("The profit pie, however, will be sliced thinner due to an equity partner growth rate in the first half of 2007 of 1.5 percent, up from last year's equity partner increase of just over 0.5 percent. But note: This year's larger class of equity partners still trails the six-year CAGR of 2.6 percent.")
68. Jerry J. Berman & Edgar S. Cahn, Bargaining for Justice: The Law Students' Challenge to Law Firms, 5 HARV. C.R.-C.L. L. REV. 16, 22 (1970).
69. Debra Cassens Moss, Associates' Pay at $71,000: N.Y. Firms OK $6,000 Hike, 74 A.B.A. J. 17 (1988).
70. Green, supra note 41, at 22.
71. Jones, supra note 22; Schmitt, supra note 22.
72. In 2007, only 44.9% of mid-level associates expected to still be at their firm in five years. Aric Press, Annual Survey Shows the New Reality of Associate Life, AM. LAW., Aug. 1, 2007, http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1185820712350;
73. see also Memorandum from the New York Associates, Clifford Chance, LLP, to the New York Partners, Clifford Chance, LLP (Oct. 15, 2002), available at http://www.lawcost.com/clifchancememo.htm [hereinafter Clifford Chance Memorandum].
74. David B. Wilkins & G. Mini Gulati, Reconceiving the Tournament of Lawyers: Tracking, Seeding, and Information Control in the Internal Labor Markets of Elite Law Firms, 84 VA. L. REV. 1581, 1612-13 (1998).
75. The Wall Street Journal investigated the link between attrition and attorney satisfaction at Sullivan & Cromwell, a large New York-based firm. Sullivan & Cromwell blamed its high attrition on exceptionally low associate morale, among other reasons. Sullivan & Cromwell and Associate Morale, Posting of Peter Lattman to the Wall Street Journal Law Blog, http://blogs.wsj.com/law/2007/01/24/sullivan-cromwell-and-associate-morale (Jan. 24, 2007, 11:51 EST). Firm productivity decreased as lawyers suffered growing rates of depression, anxiety, and other psychological illnesses. AM. BAR ASS'N, AT THE BREAKING POINT: A NATIONAL CONFERENCE ON THE EMERGING CRISIS IN THE QUALITY OF LAWYERS' HEALTH AND LIVES-ITS IMPACT ON LAW FIRMS AND CLIENT SERVICES (1991);
76. YOUNG LAWYERS DIV., ABA, SURVEY: CAREER SATISFACTION (1995). Conditions got so bad that Fried, Frank LLP hired its own staff psychologists, while Perkins, Coie LLP financed a "happiness committee" to boost company morale.
77. Alex Williams, The Falling-Down Professions, N.Y. TIMES, Jan. 6, 2008, at L1;
78. see also Lynnley Browning, For Lawyers, Perks to Fit a Lifestyle, N.Y. TIMES, Nov. 22, 2007, at C1.
79. See ABEL, supra note 19, at 90-99. In 1963, women made up 3.7% of law school students; in 2002, their enrollment was 42.5%. Leigh Jones, Fewer Women Are Seeking Law Degrees, NAT'L L.J., Oct. 1, 2007, http://www.law.com/jsp/law/careercenter/lawArticleCareerCenter.jsp?id= 191229385613. Only a handful of minority lawyers were admitted to the bar as late as the 1970s.
80. GERALDINE R. SEGAL, BLACKS IN THE LAW: PHILADELPHIA AND THE NATION 215-16 (1983). By the 1981, African-Americans still only comprised 2.3% of all associates in private firms and less than half of one percent of all partners.
81. Rita Henley Jensen, Minorities Didn't Share in Firm Growth, NAT'L L.J., Feb. 19, 1990, at Appendix.
82. See The Legal Masterminds Behind Merger Mania, How a Small Group of Lawyers Became Superstars in a 'Dirty Business,' BUSINESS WEEK, Aug. 13, 1984, at 122.
83. In 1960, less than one percent of all lawyers were racial minorities, while slightly less than five percent of law students were. GALANTER & PALAY, supra note 1, at 39. In the same year, women accounted for only 2.6 percent of lawyers. BARBARA CURRAN, THE LAWYER STATISTICAL REPORT: THE U.S. LEGAL PROFESSION IN THE 1980s, at 10 (1985).
84. See, e.g., ABA COMM'N ON WOMEN IN THE PROFESSION, GOAL IX REPORT CARD (2008), available at http://www.abanet.org/women/goalix/2008goalix-women.pdf.
85. Since the 1980s, bar associations in New York City, San Francisco, Washington, D.C., Los Angeles, and Philadelphia have attempted such programs. David B. Wilkins & G. Mitu Gulati, Why Are There So Few Black Lawyers in Corporate Law Firms?: An Institutional Analysis, 84 CAL. L. REV. 493, 505 n.33 (1996). The first and most aggressive effort was the Bar Association of San Francisco, which in 1989 set goals and timetables for minority hiring and advancement.
86. BAR ASS'N OF S.F., GOALS AND TIMETABLES FOR MINORITY HIRING AND ADVANCEMENT: 2005 INTERIM REPORT 1 (2005). Over 100 Bay Area firms signed onto the projects, committing to meet certain benchmarks in 1995 and 2000. Id at 5. Although the firms fell short of some of these targets, particularly the more ambitious goals set for 2000, the San Francisco bar did diversify much more thoroughly than other major markets during this time. Id. at 6. San Francisco's rise in minority lawyers is partly attributed to the number of Asian-Americans who entered the profession in the 1990s. The number of black and Hispanic lawyers in this market has grown only slightly since the Bar Association of San Francisco instituted its goals and timelines in 1989. Id. at 2.
87. See, e.g., Wilkins & Gulati, supra note 61, at 565-66; see also David Charney & G. Mitu Gulati, Efficiency-Wages, Tournaments, and Discrimination: A Theory of Employment Discrimination Law for "High-Level" Jobs, 33 HARV. C.R.-C.L. L. REV. 57 (1998); cf. Wilkins & Gulati, supra note 55, at 1612-13.
88. A recent study by the National Association of Law Placement indicated that, among young associates, women were twice as likely to leave their employers because of a desire to reduce billable hours. NALP FOUND., UPDATE ON ASSOCIATE ATTRITION: EXECUTIVE SUMMARY (2007);
89. see also Kristin Choo, The Right Equation: Despite Increasing Numbers of Female Lawyers, Gender Equality May Not Be Guaranteed in the Future, 87 A.B.A. J. 58 (2001);
90. Cynthia Fuchs Epstein et al., Glass Ceilings and Open Doors: Women's Advancement in the Legal Profession, 64 FORDHAM L. REV. 291, 359-60 (1995);
91. Debra Bruno, Younger Female Lawyers Play by Their Own Rules, LEGAL TIMES, Jan. 22, 2008, http://www.law.com/jsp/law/sfb/ lawArticleSFB.jsp?id=1200594602540.
92. In one study, 30-40% of part-time attorneys said that their firm relationships had deteriorated, most commonly because of perceived lack of commitment, and approximately 25% felt that their abilities and contributions were devalued. EMPLOYMENT ISSUES COMM. OF THE WOMEN'S BAR ASS'N OF MASS., MORE THAN PART-TIME: THE EFFECT OF REDUCED-HOURS ARRANGEMENTS ON THE RETENTION, RECRUITMENT, AND SUCCESS OF WOMEN ATTORNEYS IN LAW FIRMS: EXECUTIVE SUMMARY (2000), available at http://womenlaw.stanford.edu/mass. rpt.html. Another way to confirm that part-time programs are stigmatized is to look at male participation, which is very low. Telephone Interview with Joan Williams, Prof., U.C. Hastings, in S.F., Cal. (Jan. 29, 2007); see also Katherine Reilly, The Professional Parent (2006) (unpublished college thesis on file with authors) ("The men in this demographic felt a conflict between their work and their obligations at home, but they tended not to feel that they could realistically make use of policies that might ease that conflict").
93. Project for Attorney Retention, Does Your Part-Time Program Work? The PAR Usability Test, http://www.pardc.org/LawFirm/PAR_usability_test.shtml. The National Directory of Legal Employers reports that participation in part-time programs is at 2.9%. while firms with successful programs have 7-11% participation rates. Id.;
94. PROJECT FOR ATTORNEY RETENTION, THE BUSINESS CASE FOR A BALANCED HOURS PROGRAM FOR ATTORNEYS 4 (2007), available at http://www.pardc.org/LawFirm/PAR_BusinessCase_8-23-07.pdf [hereinafter PROJECT FOR ATTORNEY RETENTION, THE BUSINESS CASE FOR BALANCED HOURS]. The Project for Attorney Retention has found some success implementing "balanced hours" programs (the new, non-stigmatized name for part-time) that focus on firm management and other tools to remove stigma and discourage schedule creep. Its publications and tools were able to help Fulbright & Jaworski increase the percentage of women in senior associate positions from 29% in 2002 to 47% in 2006. Interview with Williams, supra note 64.
95. Wilkins & Gulati, supra note 61, at 569. When Wilkins & Gulati surveyed black graduates of Harvard Law School, they discovered that most who went to large firms had difficulty identifying mentors among the firm's partners or senior associates. Less than 40% surveyed said that a senior partner had taken an interest in their work, and a large majority of those respondents stated that the inability to receive mentorship played a significant role in their decision to leave the firm. See id. at 568.; see also Elizabeth Chambliss, Organizational Determinants of Law Firm Integration, 46 AM. U. L. REV. 669, 692-93 (1997).
96. Wilkins & Gulati, supra note 61, at 568.
97. GALANTER & PALAY, supra note 1, at 3.
98. McCollam, supra note 35 ("[T]hat assumption included working half-day Saturdays.").
99. Schütz, supra note 45, at 891 (internal quotations and citations omitted); see WILLIAM G. ROSS, THE HONEST HOUR: THE ETHICS OF THE TIME-BASED BILLING BY ATTORNEYS (1996).
100. Schiltz, supra note 45, at 893; see also Silberman, supra note 3, at 615 ("[L]aw firms seem almost desperate to increase their billable hours to levels that we once would have thought unbearable. Many of my contemporaries, reaching the end of their legal careers, cannot understand what has happened to them. They make a good deal more money than they ever expected, but they hate what the practice of law has become and would gladly trade a good portion of their incomes to recover the old client-law firm relationship."); Richard A. Posner, The Material Basis of Jurisprudence, 69 IND. L.J. 1, 28-29 (1993) ("Harder work, even when well remunerated, greater uncertainty of tenure, and the inevitably bureaucratic 'feel' of practicing law in a huge organization all reduce job satisfaction. Many lawyers claim with evident sincerity not to enjoy the practice of law as much as they once did. Many say they would not have gone to law school had they known what the practice of law would become.").
101. Approximately 39% of firm attorneys report that they average six or fewer hours of sleep per night. Susan Saab Fortney, The Billable Hours Derby: Empirical Data on the Problems and Pressure Points, 33 FORDHAM URB. L.J. 171, 182 (2005). "These attorneys may not be obtaining adequate sleep for peak performance because sleep research has revealed that individuals consistently sleeping six or fewer hours per night may be accumulating a sleep debt that cuts into their cognitive abilities." Id. (internal quotation marks omitted).
102. On attrition, see Part III infra.
103. See generally Schiltz, supra note 45.
104. Id. at 890, 893, 895. Even as recently as December 2007, the Wall Street Journal demonstrated the durability of the theme by reporting that "lawyers are among the most miserable of men - and women." Sue Shellenbarger, Even Lawyers Get the Blues: Opening Up About Depression, WALL ST. J., Dec. 13, 2007, at D1 ("For decades, watching the legal profession's response to these work-life problems has been a little like watching paint dry.").
105. ABA COMM'N ON BILLABLE HOURS, supra note 34.
106. Id. at vii; see also Law Students Building a Better Legal Profession, Costs to the Profession, http://refirmation.wordpress. com/costs-to-the-profession (Apr. 1, 2007); You Say You Want a Big-Law Revolution, Posting of Peter Lattman to Wall Street Journal Law Blog, http://blogs.wsj.com/law/2007/04/03/you-say-you-want-a-big-law-revolution (Apr. 3, 2007, 9:05 EST).
107. DEBORAH RHODE & DAVID LUBAN, LEGAL ETHICS 884 (4th ed. 2004);
108. see also Deborah Rhode, Pro Bono in Principle and in Practice, 26 HAMLINE J. PUB. L. & POL'Y 315, 326-30 (2005).
109. RHODE & LUBAN, supra note 78.
110. See, e.g., ABA COMM'N ON PROFESSIONALISM, ". . . IN THE SPIRIT OF PUBLIC SERVICE:" A BLUEPRINT FOR THE REKINDLING OF LAWYER PROFESSIONALISM 49 (1986) ("The Commission should not be understood as recommending a mandatory pro bono commitment."); RHODE & LUBAN, supra note 78, at 883 ("The ABA Ethics 2000 Commission rejected proposals to make pro bono mandatory.").
111. But see Scott L. Cummings, Access to Justice in the New Millennium: Achieving the Promise of Pro Bono, HUM. RTS., Summer 2005, http://www.abanet.org/irr/hr/summer05/millenium.html (arguing that the ABA "has provided strong leadership in promoting pro bono on behalf of poor and underrepresented clients" and showing the ABA's gradually stronger language in support of pro bono).
112. Aric Press, Brother, Can You Spare 20 Hours?, N.Y. LAWYER, Sept. 2, 2005, http://www.nylawyer.com/display.php/file=/ probono/news/05/090205b.
113. Id. This twenty-hour benchmark is still well below the fifty hours that the ABA recommends. MODEL RULES OF PROF'L CONDUCT R. 6.1 (1983) ("Every lawyer has a professional responsibility to provide legal services to those unable to pay. A lawyer should aspire to render at least (50) [sic] hours of pro bono publico legal services per year.").
114. Press, supra note 81. For an alternate take on this phenomenon, see Silberman, supra note 3, at 612 ("I believe, somewhat heretically I am sure, that all this talk of pro bono activities is quite counterproductive. Implicit in the emphasis on pro bono is the profession's acknowledgment . . . that its normal work is not really something to brag about.").
115. In 1992 women outnumbered men in law school 50.4% to 49.6%. In 2002, women made up 49% of law school enrollment. Jones, supra note 57.
116. See Sacha Pfeiffer, Many Female Lawyers Dropping off Path to Partnership, BOSTON GLOBE, May 2, 2007, http://www.boston.com/business/articles/2007/05/02/ many_female_lawyers_dropping_off_path_to_partnership/ ("For years, law firm leaders have insisted that as more women graduate from law school and enter private practice, the presence of women in leadership positions in the judiciary, in business, and in academia would grow correspondingly. But even though the gender gap in law firm hiring has been narrowing over the past decade, women are dropping off the partner track at alarming rates.").
117. This slide is Professor Bill Henderson's summary shot of data from the 2005-2006 NALP Directory of Law Firms. William D. Henderson, Race and Gender Differences in U.S. Corporate Law Firms: A Preliminary Analysis, Presentation to the Law Firms Working Group (October 12, 2007). In 2006, the proportion of female partners appears to have risen to 17.9%, according to NALP. Jones, supra note 57.
118. Wendy Werner, Where Have the Women Attorneys Gone?, L. PRACTICE TODAY, May 2004, http://www.abanet.org/lpm/lpt/ articles/mgt05041.html.
119. Lisa Belkin, The Opt-Out Revolution, N.Y. TIMES, Oct. 26, 2003, http://www.nytimes.com/2003/10/26/magazine/26WOMEN.html.
120. NALP FOUND., supra note 63, at 4. These are the firms' own explanations for why attorneys left - actual reasons may have been kept private and undisclosed by departing attorneys.
121. PROJECT FOR ATTORNEY RETENTION, THE BUSINESS CASE FOR BALANCED HOURS, supra note 65, at 1 (internal citations omitted)..
122. BBLP defined this group as those firms with 100 or more attorneys in their NYC offices and that filled out a single-office NALP form for February 1, 2007.
123. Press Release, Building a Better Legal Profession, New York Rankings (Oct. 10, 2007), available at http://refirmation.files.wordpress.com/ 2007/10/new-york-release.pdf.
124. U.S. CENSUS BUREAU, THE BLACK POPULATION IN THE UNITED STATES: MARCH 2002, at 1 (2003).
125. Daniel A. Panitz, How Good Intentions for Diversity Fall Short, LEGAL TIMES, Dec. 28, 2007, http://www.law.com/jsp/ihc/ PubArticleIHC.jsp?id=1198749899956.
126. Id.
127. Id.
128. NALP FOUND., supra note 63, at 4. The 19% figure appears to be consistent over recent years; for example, it was the three-year annual average between 2002-2004. See Sullivan & Cromwell and Associate Morale, Posting of Peter Lattman to Wall Street Journal Law Blog, http://blogs.wsj.com/law/2007/01/24/sullivan-cromwell-and-associate-morale (Jan. 24, 2007, 11:51 EST).
129. NALP FOUND., supra note 63, at 31.
130. A. HARRISON BARNES, BCG ATTORNEY SEARCH, LAW FIRM ECONOMICS AND YOUR CAREER (2008), available at http://www.bcgsearch.com/crc/ firmeconomics.html ("[T]he real fact of the matter is that junior associates are profitable - but not as profitable as midlevel or senior associates.").
131. WILLIAMS & CALVERT, supra note 44, at 18.
132. Id. at 18-19.
133. See supra note 56 and accompanying text.
134. Id.
135. Id.
136. Id.
137. See ARCHON FUNG, MARY GRAHAM & DAVID WEIL, FULL DISCLOSURE: THE PERILS AND PROMISE OF TRANSPARENCY 31-32 (2007).
138. See generally Joseph E. Stiglitz, Contributions of the Economics of Information to Twentieth Century Economics, 115 QUART. J. OF ECON. 1441 (2000).
139. See Shapira, supra note 9.
140. See, e.g., BUILDING A BETTER LEGAL PROFESSION, ASSOCIATE BILLABLE HOURS: MANHATTAN (2007), available at http://www.betterlegalprofession. org/comingsoon.php.
141. See, e.g., Susan Saab Fortney, Soul for Sale: An Empirical Study of Associate Satisfaction, Law Firm Culture, and the Effects of Billable Hour Requirements, 69 UMKC L. REV. 239 (2000).
142. Reich, supra note 24.
143. Mary C. Daly, The Cultural, Ethical, and Legal Challenges in Lawyering for a Global Organization: The Role of the General Counsel, 46 EMORY L.J. 1057, 1085 (1997);
144. Ronald J. Gilson & Robert H. Mnookin, Sharing Among the Human Capitalists: An Economic Inquiry into the Corporate Law Firm and How Partners Split Profits, 37 STAN. L. REV. 313, 383 (1985).
145. Koppel, supra note 10.
146. Chayes & Chayes, supra note 31, at 289-92.
147. Association of Corporate Counsel, Back in the Day: The Story of ACCA's Founding, http://www.acc.com/anniversary/founding.html.
148. John Gibeaut, The Outside Looking In, 90 A.B.A. J. 46, 49-50 (2004).
149. Id. at 49; GALANTER & PALAY, supra note 1, at 64; see also Lisa Lerer, The Scourge of the Billable Hour; Could Law-Firm Clients Finally Kill It Off?, SLATE, Jan. 2, 2008, http://www.slate.com/id/2180420 (commenting on general counsels adopting cost-cutting measures, including avoiding paying for routine work done by low-level associates).
150. Gibeaut, supra note 115, at 49.
151. Id. at 49-50. Johnson Controls adopted this model from Toyota's procedures for managing its suppliers.
152. Chandler is not the only person to hold this view. In 2001, the ABA Commission on Billable Hours issued a scathing report, criticizing the billing system for encouraging inefficient work. ABA COMM'N ON BILLABLE HOURS, supra note 34.
153. Jones, supra note 12.
154. Id. Each firm signed renewable two-year deals to conduct all of Cisco's work. Morgan, Lewis made 15% less on the deal than if they had charged Cisco by the hour.
155. Ford Motor Co. and JPMorgan Chase & Co., for example, required that a certain number of the goods and services provided to their companies be purchased from minority-owned businesses. Mayank Shah & Monder Ram, Supplier Diversity and Minority Business Enterprise Development: Case Study Experience of Three U.S. Multinationals, 11 SUPPLY CHAIN MGMT. 75, 75-78 (2006);
156. David B. Wilkins, From 'Separate Is Inherently Unequal' to 'Diversity Is Good for Business': The Rise of Market Based Diversity Arguments and the Fate of the Black Corporate Bar, 117 HARV. L. REV. 1548, 1566 (2004).
157. ABA COMM'N ON MINORITIES IN THE PROFESSION, INTO THE MAINSTREAM: REPORT OF THE MINORITY DEMONSTRATION PROGRAM 1988-1991, at 6 (1991); Wilkins, supra note 122, at 1568-69; Wilkins & Gulati, supra note 62, at 595-96.
158. Minority Corporate Counsel Association, About MCCA, http://www.mcca.com/ index.cfm?fuseaction=page.viewpage&pageid=485.
159. Melanie Lasoff Levs, Call to Action: Sara Lee's General Counsel: Making Diversity a Priority, DIVERSITY & B., Jan. 2005, at 20;
160. Peggy Nagae, How General Counsels Support Their CEOs' Diversity Efforts, DIVERSITY & B., May/June 2005, at 50.
161. WILLIAMS & CALVERT, supra note 44, at 18.
162. PROJECT FOR ATTORNEY RETENTION, THE BUSINESS CASE FOR BALANCED HOURS, supra note 65, at 2 ("Clients who spend a lot of time bringing an attorney up to speed get upset when, over and over again, an attorney they have invested their time in leaves a firm."); Aric Press, In-House, AM. LAW., Dec. 1, 2007, http://www.law.com/jsp/tal/ PubArticleTAL.jsp?id=1133345109855 (Clients are "annoyed at annual rate increases, $1,000-an-hour partners, and $160,000-a-year
163. Susan Hackett, Where Will In-House Counsel Draw the Line on Associate Costs?, CORP. COUNSEL, Mar. 19, 2007, http://www.law.com/ jsp/ihc/PubArticleIHC.jsp?id=1174035814246 ("So let's say - again, conservatively - that the $300,000 cost of a fully loaded first-year associate, when combined with the very real costs of attrition and recruiting, brings us to a nice 'blended' cost of about $400,000 a year.").
164. Lerer, supra note 116. Unfortunately for most large firms, many elite partners fail to recognize this trend, remaining focused on premium work even in an increasingly tight legal market. Craig Glidden, general counsel for Chevron, described the problem in the ABA Journal: "All law firms seem to be chasing premium-dollar work. . . . Frankly, there are more law firms out there than there is premium work." Gibeaut, supra note 115, at 50 (internal quotations omitted); see also Julius Melnitzer, British Legal Departments Lash Out at Skyrocketing Outside Counsel Fees, CORP. L. TIMES, Jan. 2003, at 27.
165. Accenture Consulting, for example, requires prospective firms to complete a seven-page diversity survey before they will even consider hiring them. Aruna Viswanatha, Pass, or Fail: Accenture Will Drop Law Firms that Don't Make the Grade on Its Diversity Exam, CORP. COUNSEL, Jan. 2007, at 20.
166. Terry Carter, RFPs Won't R.I.P., 92 A.B.A. J. 30 (2006); Fortney, supra note 72, at 190 (calling on in-house counsel to seek information about firms' billable hour requirements and factor the information into hiring decisions);
167. Douglas McCollam, The Billable Hour: Are Its Days Numbered?, AM. LAW., NOV. 28, 2005, http.//www.law.com/jsp/ihc/ PubArticleIHC.jsp?id=1132653918886.
168. Gibeaut, supra note 115.
169. Id.; Eriq Gardner, Pfizer Litigators Endure Beast of a Beauty Contest, CORP. COUNS., Oct. 31, 2005, http://www.law.com/ jsp/article.jsp?id=1130499504777.
170. Jones, supra note 12.
171. Gail Robinson & Kathleen Dechant, Building a Business Case for Diversity, 11 ACAD. OF MGMT. EXECUTIVE 21 (1997).
172. Wilkins, supra note 122, at 1566-67.
173. The in-house legal departments at large companies were far more diverse than their outside counsel - in 2006, for example, Walmart's lawyers were 25% minority and 43% female, while the nation's top firms were only 11% minority and 31% female. Nagae, supra note 125; Sam Reeves, Law Firms Need to Heed the Corporate Call to Action, L. FIRM PARTNERSHIP & BENEFITS REP. NEWSL., May 4, 2006, http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1146647128531 [hereinafter Reeves, Law Firms Heed Call];
174. Press Release, Nat'l Ass'n of Law Placement, Partnership at Law Firms Elusive for Minority Women - Overall, Women and Minorities Continue to Make Small Gains, at tbl.2 (Nov. 8, 2006), available at http://www.nalp.org/ press/details.php?id=64. Indeed, part of the reason that in-house lawyers are so eager to transform outside counsel is because they are women and minorities who began their careers in a corporate firm and left because of the inhospitable environment.
175. See Arm Reeves, CEOs Speak Out on the Business Case for the 21st Century: Diversity in Dollars and Sense, DIVERSITY & B., Nov. 2002, at 9; Wilkins, supra note 122, at 1557.
176. The petition read: As Chief Legal Officers, we hereby reaffirm our commitment to diversity in the legal profession. Our action is based on the need to enhance opportunity in the legal profession and our recognition that the legal and business interests of our clients require legal representation that reflects the diversity of our employees, customers and the communities where we do business. In furtherance of this renewed commitment, this is intended to be a Call to Action for the profession generally, in particular for our law departments, and for the law firms with which our companies do business. In an effort to realize a truly diverse profession and to promote diversity in law firms, we commit to taking action consistent with the referenced Call to Action. To that end, we pledge that we will make decisions regarding which law firms represent our companies based in significant part on the diversity performance of the firms. We intend to look for opportunities for firms we regularly use which positively distinguish themselves in this area. We further intend to end or limit our relationships with firms whose performance consistently evidences a lack of meaningful interest in being diverse. Call to Action, Commitment Statement, A Call to Action: Diversity in the Legal Profession, http://www.tools.mcca.com/CTA/commitment-print.html.
177. The petition may be viewed at Call to Action: Diversity in the Legal Profession, http://www.clocalltoaction.com.
178. Koppel, supra note 10.
179. Id.
180. Id.; see also BRIAN DALTON ET AL., VAULT GUIDE TO THE TOP 100 LAW FIRMS 27 (2007); VERA DJORDJEVICH ET AL., VAULT GUIDE TO THE TOP TEXAS & SOUTHWEST LAW FIRMS 22-26 (2007).
181. Kellie Schmitt, Corporate Diversity Demands Put Pressure on Outside Counsel, RECORDER, Dec. 28, 2006, http://www.law.com/jsp/ihc/ PubArticleIHC.jsp?id=1167214010196.
182. Based on Fortune Global 500, http://money.cnn.com/magazines/fortune/ global500/2007.
183. Schmitt, supra note 143.
184. General counsels began scrutinizing firms all the more carefully after a series of news articles in the early 2000s accused law firms of overbilling their clients. The most famous incident took place in 2002, when a handful of Clifford Chance associates leaked a memo accusing firm attorneys of padding hours. Robert Clow & Bob Sherwood, Top Law Firm Hit by 'Padding' Claims: Clifford Chance Says It Did Not Exaggerate Time with Clients, FIN. TIMES, Oct. 26, 2002, at 1;
185. Bob Sherwood, Law Firms Face Greater Scrutiny over Charges, FIN. TIMES, Oct. 29, 2002, at 4; Clifford Chance Memorandum, supra note 54.
186. The General Counsel Roundtable, for example, has developed an online tool that assists in-house lawyers analyze and compare various billing options when hiring outside firms. GENERAL COUNSEL ROUNDTABLE: ANTHOLOGY OF RESEARCH AND TOOLS 159 (2007);
187. see also Serengeti: The Global Legal Platform, http://www.serengetilaw.com (describing its online tracking system permitting clients faster review of "bills, budgets, status reports, and documents from 100% of their firms. The result is a system that helps in-house counsel control legal spending while saving significant time and money.").
188. Daniel L. Abrams, Legal Bill Review in an Era of Subtle Overbilling, METROPOLITAN CORP. COUNSEL, Jan. 2004, at 27; Ricker, supra note 42, at 66.
189. Tom McCann, Corporate Counsel Urge Law Firms to Use Business Sense, CHI. LAWYER, May 2003, at 36.
190. Nagae, supra note 125.
191. Reeves, Law Firms Heed Call, supra note 137.
192. Most of the general counsels we have spoken with say they generally prefer information about diversity on their own matters, because setting a narrow goal is more likely to be successful.
193. See Mark Galanter & William Henderson, The Elastic Tournament: A Second Transformation of the Big Law Firms, 60 STAN. L. REV 1867 (2008).
194. As ranked by Vault. The list includes: Wachtell, Lipton, Rosen & Katz; Cravath, Swaine & Moore; Sullivan & Cromwell; Skadden, Arps, Slate, Meagher & Flom; Davis Polk & Wardwell; Simpson Thacher & Bartlett; Cleary, Gottlieb, Steen & Hamilton; Latham & Watkins; Weil, Gotshal & Manges; and Covington & Burling. DALTON ET AL., supra note 142, at xiii.
195. Id. at 88, 96, 104, 112, 120, 126, 134, 142, 150, 158.
196. For the list of the top fourteen schools, see supra note 8. The number of graduates at these schools vary by year, but the most up-to-date information can be found at NALP, Directory of Law Schools, http://www. nalplawschoolsonline.org.
197. Unsurprisingly, as scarcity increases, so does the pay. Recent graduates who clerked for a federal judge typically receive an additional $50,000 bonus upon arriving at a firm; graduates who clerked for a justice of the U.S. Supreme Court get an additional $200,000. See Dahlia Lithwick, Bonus Round: What to Make of Those Astronomical Supreme Court Signing Bonuses?, SLATE, Mar. 10, 2007, http://www.slate.com/id/2161454/.
198. Leigh Jones, As Salaries Rise, So Does the Debt, NAT'L L.J., Feb. 1, 2006, http://www.law.com/jsp/law/careercenter/ lawArticleCareerCenter.jsp?id=1138701909390.
199. Id.
200. Deborah L Rhode, The Profession and Its Discontents, 61 OHIO ST. L.J. 1335, 1341 (2000).
201. This is a legitimate assumption considering how attractive big firm starting salaries are to college students weighing law school. See also Jones, supra note 158 (arguing that law students live too richly, drive better cars than faculty, and have overblown expectations of their future wealth).
202. Ralph Nader, Law Schools and Law Firms, 54 MINN. L. REV. 493, 498 (1970)
203. William D. Henderson & David Zaring, Young Associates in Trouble, 105 MICH. L. REV. 1087, 1099 tbl.3 (2007).
204. Galanter & Henderson, supra note 153, at 1870.
205. Mary Flood, Pay Us Less, They Request, and Don't Work Us So Hard, HOUSTON CHRON., Apr. 16, 2007, at B1;
206. Stephanie Francis Ward, The Ultimate Time-Money Trade-Off: Associates Tell Us They'd Take a Pay Cut to Work Less. Smart Deal or Impossible Dream?, 93 A.B.A. J. 24 (2006);
207. Marisa McQuilken, Students Seek a More Reasonable Law Firm Life, LEGAL TIMES, Sept. 24, 2007; Interview with Williams, supra note 64.
208. Stephanie Armour, Generation Y: They've Arrived at Work with a New Attitude, USA TODAY, Nov. 6, 2005, at B1;
209. Anthony Balderrama, Generation Y: Too Demanding at Work?, CNN ONLINE, Dec. 26, 2007, http://www.cnn.com/2007/LIVING/worklife/12/26/ cb.generation; Brück & Canter, supra note 16, at 5;
210. Penelope Trunk, What Gen Y Really Wants, TIME, July 5, 2007.
211. Galanter & Henderson, supra note 153, at 1922.
212. Id. at 155 (internal citations omitted); see also Bruck & Canter, supra note 16.
213. Social psychology suggests that the availability of information can influence the salience of particular criteria in decision making. David L. Hamilton & Roger D. Fallot, Information Salience As a Weighing Factor in Impression Formation, 30 J. PERSONALITY & SOC. PYSCH. 444 (1974). The current focus on compensation may be therefore a byproduct of easy access to salary information, with websites such as Infirmation and Above the Law publishing salaries and bonus ranges for every law firm in every market. See Shapira, supra note 9, at B01; Infirmation, Firm Salaries & Other Statistics Chart, http://www.infirmation.com/shared/insider/payscale.tcl. If reformers can shift the focus to other issues, such a workplace diversity or billable hour requirements, they can create new competition among firms to improve along these metrics as well.
214. Shapira, supra note 9, at 22-23, 23 n.19. At the University of Michigan, for example, only 26 percent of its 1969 graduates entered Wall Street firms, as opposed to 75 percent in previous years.
215. Berman & Cahn, supra note 50, at 16.
216. Id. at 17. The then-novelty of pro bono practice at large law firms is implied by the authors' statement that "[s]ome firms have already gone so far as to . . . institute[] an intra-firm policy that each member of the firm may devote a certain amount of office time to pro bono publico work." Id. at 24-25. The entire article explores how firms went from having no pro bono practice - all volunteer at night - to actually letting people do pro bono as part of their firm time during the day.
217. Id. at 17 n.1.
218. Id. at 16-17, 26-27; Nader, supra note 162, at 498 ("The responses which the firms give to these questionnaires . . . will further sharpen the issues and the confrontations. The students have considerable leverage. They know it is a seller's market").
219. Berman & Cahn, supra note 50, at 27-28.
220. Id. at 22.
221. Although we cite continued concerns with the level of pro bono work done in firms, supra Part I.B, there is no question that almost every large law firm has a pro bono program and advertises it to potential recruits.
222. Berman & Cahn, supra note 50, at 24-25.
223. Id. at 23 n.20
224. Id. at 28-29. After their initial success, student organizers in the 1970s dreamt of more ambitious goals. They discussed creating a "National Law Students' Union," which would negotiate with law firms on behalf of students for other workplace reforms. This collective strategy would increase the students' leverage and allow them to push for change throughout the legal profession. Although these plans were not fully realized, the law student movement for professional reform accomplished a great deal, and these efforts provide a reasonable model for Millennial generation efforts to get the attention of their future employers and to reform some of the worst excesses of the last twenty years.
225. The NALP Directory of Legal Employers contains self-reported information from virtually every major law firm in the nation. Although NALP asks firms for information regarding billable hours, few complete this information. NALP, Directory of Legal Employers, http://www.nalpdirectory.org.
226. Press Release, Yale Law Women, supra note 13.
227. Id.
228. Id.
229. See Law Students Building a Better Legal Profession, Principles for a Renewed Profession, http://refirmation.wordpress.com/principles-for-a- renewed-legal-profession.
230. Open Letter from Law Students Building a Better Legal Profession (Apr. 2, 2007), available at http://online.wsj.com/public/resources/documents/ lawfirm0403.pdf.
231. Posting of Peter Lattman, supra note 77.
232. Leigh Jones, Exhibit A: Off the Beaten Track; Why Some Students Are Opting out of Lucrative Big Law Summer Clerkships, AM. LAW. STUDENT EDITION, Summer 2007, at 14.
233. See Adam Liptak, In Students' Eyes, Look-Alike Lawyers Don't Make the Grade, N.Y.TIMES, Oct. 29, 2007, at A9;
234. see also Thomas Adcock & Zusha Elinson, Student Group Grades Firms on Diversity, Pro Bono Work, N.Y.L.J., Oct. 19, 2007, at 24;
235. Henry Weinstein, Big L.A. Law Firms Score Low on Diversity Survey, L.A. TIMES, Oct. 11, 2007, at B3;
236. You Say You Want a Big-Law Revolution, Take II Posting of Amir Efrati to Wall Street Journal Law Blog, http://blogs.wsj.com/law/2007/10/10/you-say-you- want-a-big-law-revolution-take-ii (Oct. 10, 2007, 11:47 EST).
237. The strategy of grading organizations is hardly new. The "report card" is an increasingly popular means of "encourag[ing] accountability to external audiences and . . . providing] valuable feedback to service providers" amongst government agencies and consumer advocacy groups. WILLIAM T. GORMLEY, JR. & DAVID L. WEIMER, ORGANIZATIONAL REPORT CARDS 1 (1999).
238. See, e.g., Christine Gutweiler, Moral Statt Moneten, FIN. TIMES DEUTSCHLAND, Nov. 27, 2007; Nine to Noon (Radio New Zealand broadcast, Nov. 21, 2007) (including interview with Prof. Michele Landis Dauber and student Andrew Bruck, both of Stanford Law School.)
239. Lisa Belkin, Who's Cuddly Now? Law Firms, N.Y. TIMES, Jan. 24, 2008, at G1.
240. McQuilken, supra note 165. The market reacted quickly to this new information. Firms that scored well used this information to attract recruits. Venable bragged about its fifth-place rank for diversity on the front page of its company website. Press Release, Venable, LLP, Law Student Group Ranks Venable Fifth in Diversity Among Large DC Firms (Oct. 13, 2007), available at http://www.venable.com/announcements.cfm?action=view&id=22. The Chairman and CEO of Orrick, whose firm ranked fifth nationwide for overall diversity, issued a statement of support for the project. Law Students Building a Better Legal Profession. Orrick Speaks Out!, http://refirmation.wordpress.com/ 2007/10/03/orrick-speaks-out. Firms at the bottom of some rankings dismissed them as "totally ridiculous," while fretting about how it might affect their recruiting season. Liptak, supra note 189. Meanwhile, law students flooded the organization with proposals to start chapters at schools across the country, all hoping that they could build the movement's market power to affect large firms.
241. John M. Conley, an anthropologist who taught at the University of North Carolina's law school, lamented that highly recruited students at his school never used their market power to encourage firms to change their hiring practices. He noted, however, that the power of even the most sought-after UNC students was probably less significant than the power possessed by recruits at the top law schools, were they ever to exercise it. John M. Conley, Tales of Diversity: Lawyers' Narratives of Racial Equity in Private Firms, 31 L. & SOC. INQUIRY, 831, 846-49 (2006); see also Henderson & Zaring, supra note 163, at 1098 (noting research that reveals firms cannot be reduced to one single, oppressive monolith, and that young lawyers ought to gravitate towards firms that provide the best working conditions).
242. Bruck & Canter, supra note 16, at 7.
243. Crucially, Building a Better Legal Profession organizers and members always acknowledged that they were willing to make financial sacrifices to have a better work/life balance. We are explicit about this: "We recognize that law students have become part of the problem by focusing on paychecks and bonuses, while avoiding the tough questions about the conditions of working lives and associate satisfaction. But we are committed to focusing on the principles set forth below in our own job searches, and ask law firms to do the same. We recognize that these changes are not free: we are willing to accept reduced salaries in exchange for better working lives." Law Students Building a Better Legal Profession, Principles for a Renewed Profession, http://refirmation.wordpress.com/principles-for-a-renewed-legal-profession. The media initially understood this point. "This is a labor movement asking for a smaller paycheck," wrote Peter Lattman, supra note 77. But since then the point has gone unnoticed. Surveys suggest that a substantial number of young lawyers "would be willing to earn less money in exchange for lower billable-hour requirements." PROJECT FOR ATTORNEY RETENTION, THE BUSINESS CASE FOR BALANCED HOURS, supra note 65; see also Ward, supra note 165.
244. FUNG, GRAHAM & WEIL, supra note 106, at 25 (describing a "nascent" movement to "employ computer power and the Internet . . . in order to create adaptable, real-time, customized information that reduces risks and public service flaws."). These student-initiated transparency programs are the latest in a long line of projects which use information disclosure and consumer choice as a way of correcting market failures. Other examples, usually government-mandated, include drinking water safety reports, automobile rollover ratings, and campaign finance disclosure. Id. at 1-13.
245. Thomas Adcock & Zusha Elinson, Student Group Grades Firms on Diversity, Pro Bono Work, N.Y. L.J., Oct. 19, 2007, at 24.
246. FUNG, GRAHAM & WEIL, supra note 106, at 25.
247. And since firms have little intention of retaining that individual to partnership anyway, it hardly matters that the substitute may be somewhat less desirable on some dimensions.
248. Jonathan R. Macey, Lawyers in Agencies: Economics, Social Psychology, and Process, 61 L. & CONTEMP. PROBS. 109, 110-11 (1998); McQuilken, supra note 165;
249. Eric Messinger, First-Years Go Pass-Fail: Students Eschew Letter Grades, Tradition in Large Numbers, STAN. DAILY, Jan. 8, 2008, http://daily.stanford.edu/article/2008/1/8/firstyearsGoPassfail (quoting a first-year law student, suggesting that classmates are "notorious for being cautious and risk-adverse.");
250. Thomas Vinciguerra, Coming Soon: 'Law School Nation?,' N.Y. TIMES, Oct. 28, 2007, http://www.nytimes.com/2007/10/28/fashion/ 28wurtzel.html; Posting of Brian Leiter to Leiter's Law School Reports, http://leiterlawschool.typepad.com/leiter/2006/04/high_gpas_at_to.html (Apr. 19, 2006);
251. University of Michigan Outlaws, Fourteen Things to Ponder Before Applying to Law School . . ., http://www.umoutlaws.org/2005/07/prospectives.html. There are, of course, scattered examples of students leveraging their power. The most common involves student organizations asking firms to underwrite various campus activities at law school. Every top law school hosts an annual "public interest auction," for example, and firms have proved more than willing to sponsor these events in exchange for the goodwill it generates with students. Firms such as Wachtell, Lipton, Rosen & Katz; Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Sullivan & Cromwell helped law students at Harvard and Stanford raise tens of thousands of dollars last year.
252. See, e.g., Harvard Law School Public Interest Auction, Building a Base for Public Interest, available at http://www.law.harvard.edu/ students/opia/auction/program3.pdf; Stanford Public Interest Law Foundation, Donate, available at http://spilf.stanford.edu/sponsors.shtml.
253. William C. Barba, The Unionization Movement: An Analysis of Graduate Student Employee Union Contracts, BUS. OFFICER, Nov. 1994, at 35.
254. Yale Univ. et al., 330 N.L.R.B. 246, 246 (1999); see also Grant Hayden, "The University Works Because We Do": Collective Bargaining Rights for Graduate Assistants, 69 FORDHAM L. REV. 1233, 1236-44 (2001) (describing graduate assistant organizing efforts at Yale, University of Kansas, and other schools in the 1990s).
255. Robert Michael Fischl, The Other Side of the Picket Line: Contract, Democracy, and Power in a Law School Classroom, 31 N.Y.U. REV. L. & SOC. CHANGE 517, 529-32 (2007) (describing the tepid response among law students asked to join a boycott of on-campus classes in support of a strike by janitors at UM). Of course, the plight of graduate students unable to receive minimum wage for their teaching generates far greater outrage than recent law graduates making $160,000 a year.
256. KATE BRONFENBRENNER, ORGANIZING TO WIN: NEW RESEARCH ON UNION STRATEGIES 2-11 (1998). There are, however, other barriers to student action. Organizations that provide students with information about firms, as Yale Law Women and Building a Better Legal Profession do, must update their materials every year and remain highly engaged with their target populations. But law students only remain in school for three years, making it all the more challenging to establish a long-term effort with a continuity of leadership and institutional knowledge. Firms can wait for the current leaders of these organizations to graduate and hope that momentum dissipates in the next cohort of law students.
257. It is, of course, possible that students will lose this market position in the future. A sharp economic downturn would decrease the demand for entry-level associates at top firms. Similarly, if the top law schools expanded the size of their graduating classes, it would increase the supply of elite graduates. Either of these developments would weaken the bargaining power of recruited students.
258. Jessica Guynn, Right Out of Law School, Starting Salary, $160,000; Bay Area Firms Match Wages in New York to Draw A-List Talent, S.F. CHRON, May 5, 2007, http://www.sfgate.com/cgi-bin/ article.cgi?f=/c/a/2007/05/05/BUGU0PLI6O1.DTL&hw=legal&sn=002&sc= 929;
259. see Ashby Jones, More Work, but Cocktails Too - Law Firms' Summer Associates Ask for More Training, Still Get Baseball Outings, Fancy Lunches, WALL ST. J., June 27, 2006, at B1.
260. Simpson Thatcher Raises Associate Base Salaries!!!, Posting of David Lat to Above the Law, http://www.abovethelaw.com/2007/01/ breaking_simpson_thacher_raise.php (Jan. 22, 2007, 16:36 EST).
261. Skaddenfreude: S&C Says, "Charney Who?," Posting of David Lat to Above the Law, http://www.abovethelaw.com/2007/01/ skaddenfreude_sc_says_charney.php (Jan. 23, 2007, 16:08 EST);
262. Skaddenfreude: Here's the Cadwalader Memo, Posting of David Lat to Above the Law, http://www.abovethelaw.com/2007/01/skaddenfreude_heres_the_cadwal.php (Jan. 23, 2007, 15:43 EST);
263. Skaddenfreude: Paul Weiss Has Matched Simpson Thatcher, Posting of David Lat to Above the Law, http://www.abovethelaw.com/2007/01/ skaddenfreude_paul_weiss_has_m.php (Jan. 23, 2007, 14:45 EST).
264. Skaddenfreude: Morning Round-up, Posting of David Lat to Above the Law, http://www.abovethelaw.com/2007/01/skaddenfreude_morning_roundup.php (Jan. 26, 2007, 8:50 EST).
265. It is the same reason why law firms spend lavishly on summer intern lunches, or why nearly 100% of summer associates receive a full-time employment offer at the end of their ten-week stint. No firm wants to be known back on law school campuses as the Stingy Firm, or the Firm That Doesn't Give Offers To Its Summers. See Peter Lattman, The Nerve! Students Tell Big Firms They Want a Life, WALL ST. J., Apr. 4, 2007, at B2 (discussing why firms respond to student demands: "What's in it for the firms? Possibly avoiding negative chatter among potential hires. The students maintain that before the fall interviewing season they will spread the word on campuses about which firms haven't signed on."); Shapira, supra note 9.
266. Simpson Thacher Raises to . . . 18 Weeks!, Posting of David Lat to Above the Law, http://www.abovethelaw.com/2007/08/simpson_thacher_raises_to_18_w_1.php (Aug. 10, 2007, 12:00 EST).
267. Biglaw Perk Watch: Latham & Watkins Expands Parental Leave, Posting of David Lat to Above the Law, http://abovethelaw.com/2007/12/ biglaw_perk_watch_latham_watki.php (Dec. 12, 2007, 15:35 EST).
268. Davis Polk Rolls Out New Parental Benefits (Or: Improved Parental Leave, a Hot New Biglaw Trend), Posting of David Lat to Above the Law, http://abovethelaw.com/2007/12/davis_polk_rolls_out_new_paren.php (Dec. 20, 2007, 15:30 EST).
269. See, e.g., Biglaw Perk Watch: WilmerHale and O'Melveny & Myers to 18 Weeks, Posting of David Lat to Above the Law, http://abovethelaw.com/ 2008/03/biglaw_perk_watch_wilmerhale_a.php (Mar. 27, 2008, 8:50 EST).
270. Galanter & Henderson, supra note 153.
271. Part of their unwillingness to leave is really an inability to leave, of course, since their law school credentials provide them fewer outplacement options. Movement to the next job will depend on whether other employers' prefer for work experience over education or vice versa. Such a redesign could actually increase costs, although any speculation now is premature. Firms would benefit from a more rigorous selection than the current superficial interviews, yet would have to cut down on the wining and dining. For an excellent description of the current model and investigation of how other professional industries recruit top candidates, see Elizabeth Goldberg, Is This Any Way to Recruit Associates?, AM. LAW., Aug. 6, 2007, http://www.law.com/jsp/article.jsp?id=1185820712334 ("One of the biggest mistakes firms make, say legal consultants, is to rely too heavily on academic credentials."). Moreover, although elite law schools do not have a monopoly on legal talent, even if this does happen there will likely be more than enough demand from New York firms who kept the Cravath model to keep elite student market power high. Additionally, over the long-term advocates will adjust and take their message to lower-ranked law schools that have become the new feeders to large law firms.
272. Galanter & Henderson, supra note 153.
273. This conference, entitled "The American Legal Profession: Current Controversies, Future Challenges" was held at Stanford Law School on March 14, 2008. This topic came up on the first panel with Professors Deborah Hensler, Marc Galanter, Gillian Hadfield, and William Henderson, along with Mark Harris, CEO of Axiom Legal. Gillian Hadfield's contribution to this Issue, Legal Barriers to Innovation: The Growing Economic Cost of Professional Control over Corporate Legal Market, 60 STAN. L. REV. 1689 (2008), goes into much more detail about the relationship between innovation and regulation in the legal profession.
274. Id.
275. GALANTER & PALAY, supra note 1, at 3. For more discussion of problems in the industry, see GLENDON, supra note 3, at 4; Milton C. Regan, Jr., Taking Law Firms Seriously, 16 GEO. J. LEGAL ETHICS 155, 163 (2002).