Foreword: The great recession and the legal profession

Fordham Law Review

Volumn 78, Issue 5, 2010, Pages 2051-2066

  Wald, Eli ^a  

^a UNIVERSITY OF DENVER   (United States)

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EID: 77952692572     PISSN: 0015704X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (85)

1. Q&A: Points of Inflection: A Conversation with a New Dean, HARV. L. BULL., Winter 2010, at 14, 14 (Q&A with Dean Martha Minow).
2. See Richard A. Posner, When Does a Depression or a Recession End?, ATLANTIC, Aug. 1, 2009, http://www.theatlantic.com/business/archive/2009/08/ when-does-a-depressionor-a-recession-end/22544/ (noting that the economic downturn of 2008-2009 is being referred to by some commentators as the "Great Recession").
3. Law Shucks, a blog dedicated to large law firms, reports that between January 1, 2008, and January 31, 2010, over 14, 347 people have been laid off by major law firms alone (5632 lawyers/8715 staff).
4. See Law Shucks, Layoff Tracker, http://lawshucks.com/layoff-tracker/ (last visited Mar. 12, 2010).
5. See, e.g., Martha Neil, Some BigLaw Leaders Still Ponder: How Low Can Associate Salaries Go?, A.B.A. J., Oct. 6, 2009, http://www.abajoumal.com/ weekly/some-biglaw-leaders-still-ponder-how-low-can-associate-salaries-go (analyzing trend of lower associate salaries at large law firms);
6. Debra Cassens Weiss, First-Year Associates Bear the Brunt of Lower Bonuses; Some See Cuts of 71%, A.B.A. J., Dec. 21, 2009, http://www.abajournal. com/weekly/article/first-year-associates-bear-the-bnuit-of-lower-bonuses-some- see-cuts-of-71 (reporting on decreases in lawyers' salaries and bonuses).
7. See, e.g., Matt Masich, Law School Career Offices Seek Fix for More Lawyers, Fewer Jobs, LAW WK. ONLINE, Oct. 21, 2009, http://www.lawweekonline. com/2009/10/career-offices-seek-fix-for-more-lawyers-fewer-jobs/ (discussing the impact of the recession on recruitment of graduates at a top-fifty law school);
8. Debra Cassens Weiss, Downturn's Losers: BigLaw, 'Entitled' Associates, Top Schools, A.B.A. J., May 7, 2009, http://www.abajournal.com/weeldy/downturns- losers-biglaw-entitled-associates-top-schools (commenting on the impact of the recession on recruitment of graduates of elite law schools);
9. see also William D. Henderson & Andrew P. Morriss, What Law School Rankings Don't Say About Costly Choices, NAT'L L.J., Apr. 16, 2009, http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1207904889498&slreturn= 1&hbxlogin=1.
10. E.g., Richard B. Schmitt, A Death in the Office, A.B.A. J., Nov. 2009, at 30 (reporting on the suicide of prominent appellate litigator Mark Levy, who took his own life after being fired during the economic downturn).
11. A recent survey on the state of the legal profession conducted by LexisNexis reported that over half of the attorneys surveyed believed that the recession will permanently change legal practice. LEXISNEXIS, STATE OF THE LEGAL INDUSTRY SURVEY: COMPLETE SURVEY FINDINGS 10 (2009);
12. see also Larry E. Ribstein, The Death of Big Law (Univ. of Ill. Law & Econ. Research Paper No. LE09-025, 2009), available at http://ssrn.com/ abstract=1467730;
13. Brian Leiter's Law School Reports, http://leiterlawschool.typepad.com/ leiter/2009/04/the-upheaval-in-the-market-for-new-lawyers-at-the-big-law-firms- temporary-or-permanent.html (Apr. 30, 2009, 13:57 EST).
14. See, e.g., Scott L. Cummings & Deborah L. Rhode, Managing Pro Bono: Doing Well by Doing Better, 78 FORDHAM L. REV. 2357 (2010).
15. See generally Jacques Derrida, Force of Law: The "Mystical Foundation of Authority," 11 CARDOZO L. REV. 919, 955 (1990) (exploring "anxiety-ridden moment[s] of suspense").
16. The great legal scholar Homer Simpson refers to such a moment in time as a "crisitunity," to capture both the notions of crisis and opportunity. The Simpsons: Fear of Flying (Fox television broadcast Dec. 18, 1994). "Yes! Crisitunity!" is Homer's response when Lisa informs him that "the Chinese use the same word for 'crisis' as they do for 'opportunity.'" Id.
17. See, e.g., 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 (2001).
18. Nicholas S. Zeppos, The Legal Profession and the Development of Administrative Law, 72 CHI.-KENT L. REV. 1119, 1120 (1997) ("By any standard it appears as if the administrative state, and the regulatory regimes that came with it, provided the legal profession with innumerable professional opportunities. The inevitable link between overregulation through administrative agencies and the economic welfare of lawyers has now become the dominant⋯ account."
19. (citing PHILIP K. HOWARD, THE DEATH OF COMMON SENSE 10-11, 22-29 (1994))).
20. For a revealing contemporaneous account of how the growing New Deal administration was marshaled by lawyers and appropriated as a matter of administrative law, see Carl McFarland, Administrative Agencies in Government and the Effect Thereon of Constitutional Limitations, 20 A.B.A. J. 612 (1934).
21. See, e.g., Ribstein, supra note 7.
22. See generally JOHN P. HEINZ & EDWARD O. LAUMANN, CHICAGO LAWYERS: THE SOCIAL STRUCTURE OF THE BAR (1982) (coining the classic term "hemispheres" of lawyers to denote that the legal profession consists of two categories of lawyers whose practice settings, socioeconomic and ethnoreligious backgrounds, education, and clientele differ considerably).
23. See Ronen Shamir, Professionalism and Monopoly of Expertise: Lawyers and Administrative Law, 1933-1937, 27 LAW & Soc'Y REV. 361, 363, 378 (1993)
24. [hereinafter Shamir, Professionalism]. Ronen Shamir explores the tension between the bar and its elite in greater detail in RONEN SHAMIR, MANAGING LEGAL UNCERTAINTY: ELITE LAWYERS IN THE NEW DEAL (1995) [hereinafter SHAMIR, MANAGING LEGAL UNCERTAINTY].
25. See Shamir, Professionalism, supra note 13, at 371-74;
26. see also Harry W. Arthurs & Robert Kreklewich, Law, Legal Institutions, and the Legal Profession in the New Economy, 34 OSGOODE HALL L.J. 1, 48 (1996) (stating that the legal profession continues to experience "growing internal political dissension at the very moment when it also confronts the profound and permanent external challenges of the new economy").
27. Michael E. Parrish, The Great Depression, The New Deal, and the American Legal Order, 59 WASH. L. REV. 723, 746-50 (1984).
28. Id. at 747.
29. See PETER H. IRONS, THE NEW DEAL LAWYERS 3 (1982).
30. See JEROLD S. AUERBACH, UNEQUAL JUSTICE: LAWYERS AND SOCIAL CHANGE IN MODERN AMERICA 191-230(1976).
31. See Parrish, supra note 15, at 748.
32. See, e.g., ROBERT L. NELSON, PARTNERS WITH POWER: THE SOCIAL TRANSFORMATION OF THE LARGE LAW FIRM 231 (1988).
33. ABA Lawyer Demographics, http://new.abanet.org/marketresearch/ PublicDocuments/Lawyer-Demographics.pdf (last visited Mar. 12, 2010) (illustrating that in 2000, 74% of U.S. lawyers worked in private practice and 14% of those were employed by law firms with more than 100 lawyers, accounting for more than 10% of all U.S. lawyers).
34. The percentage rose between 2000 and 2007 as large law firms continued to grow and recruit a larger percentage of law graduates. The National Association of Law Placement (NALP) reports that between 2001 and 2006 law firms recruited over 55% of all law graduates. Large law firms with over 100 lawyers recruited approximately 40% of those graduates, accounting for an astonishing 22% of all graduates nationwide. See Trends in Graduate Employment - 1985-2006, NALP BULL., July 2007, http://www.nalp.org/2007julgraduateemployment/.
35. In 2007, nearly 23% of all law graduates were hired by large law firms with over 100 lawyers, with a majority of those recruited by law firms with over 500 lawyers. NALP, CLASS OF 2007 NATIONAL SUMMARY REPORT #2 (2008), available at http://www.nalp.org/uploads/1229-natlsummary07revised.pdf.
36. See, e.g., John P. Heinz, When Law Firms Fail, 43 SUFFOLK U. L. REV. 67 (2009);
37. Ribstein, supra note 7.
38. See, e.g., Judith S. Kaye, Women Lawyers in Big Firms: A Study in Progress Toward Gender Equality, 57 FORDHAM L. REV. 111, 112-13 (1988) ("[W]hat seems to be happening in the big firms is symptomatic of something more pervasive ⋯. The big firms cast a giant shadow, in terms of public perceptions of the profession, parallels in other fields, and standards within the legal community. Their every uptick reverberates widely. [Next], the actual influence of the big firms and their alumni - many of them general counsels of major corporations - extends far beyond their numbers.").
39. Robert W. Gordon, A New Role for Lawyers?: The Corporate Counselor After Enron, 35 CONN. L. REV. 1185, 1204 (2003) (exploring the role of lawyers in the corporate meltdown of the 1990s);
40. William H. Simon, Whom (or What) Does the Organization's Lawyer Represent?: An Anatomy of Intraclient Conflict, 91 CAL. L. REV. 57 (2003) (same);
41. William H. Simon, The Kaye Scholer Affair: The Lawyer's Duty of Candor and the Bar's Temptations of Evasion and Apology, 23 LAW & Soc. INQUIRY 243, 280-82 (1998) (discussing the role of lawyers in the savings and loans crisis of the 1980s).
42. See Posting of Andrew Perlman to Legal Ethics Forum Blog, http://legaletlucsforum.typepad.com/blog/2008/10/the-biggest-leg.html (Oct. 5, 2008, 10:05 EDT) (opining that the biggest legal ethics story of 2008 was that nobody was blaming unethical attorneys for the economic crisis).
43. See Carol A. Needham, Listening to Cassandra: The Difficulty of Recognizing Risks and Taking Action, 78 FORDHAM L. REV. 2329 (2010).
44. Although, as David Wilkins notes in Teams of Rivals? Toward a New Model of the Corporate Attorney-Client Relationship, 78 FORDHAM L. REV. 2067 (2010), lawyers may have been involved in wrongdoing in the latter stages on the bailout.
45. Id. at 2068 & n.5 ("[I]t is only a matter of time before the inside and outside lawyers who represent the banks and other financial institutions we are currently bailing out will be called upon to take their turn in the dock.").
46. Even if lawyers did not play a leading role in the economic downturn, some may have been complicit, advising financial institutions on the design of credit swap securitizations and complex derivatives and counseling regulatory agencies on their overseeing duties. We may, however, never find out the extent to which lawyers were actually involved in bringing about and failing to mitigate aspects of the Great Recession because, as Stephen Gillers has pointed out, the doctrines of confidentiality and privilege significantly curtail access to such information. See Stephen Gillers, Model Rule 1.13(c) Gives the Wrong Answer to the Question of Corporate Counsel Disclosure, 1 GEO. J. LEGAL ETHICS 289 (1987) (exploring the impact of confidentiality and privilege on lawyers' ability to disclose wrongdoing inside and outside of an entity-client).
47. American Bar Association Model Rule of Professional Conduct 1.2(a) allocates authority in the attorney-client relationship pursuant to a basic agency model, granting client-principals authority over the goals of the representation and vesting agent-lawyers with primary authority over the means by which the objectives of the representation are to be pursued. MODEL RULES OF PROF'L CONDUCT R. 1.2(a) (2008). This rule adopts another essential feature of the agency model, holding client-principals alone responsible for the goals of the relationship and releasing lawyer-agents from legal liability and moral accountability for the objectives they help clients pursue.
48. Id. R. 1.2(b);
49. see also RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS ch. 2, introductory n. (2000) ("The subject of this Chapter is, from one point of view, derived from the law of agency. It concerns a voluntary arrangement in which an agent, a lawyer, agrees to work for the benefit of a principal, a client.").
50. See generally CHARLES W. WOLFRAM, MODERN LEGAL ETHICS 146 (1986) ("Whatever may be the models that obtain in other legal cultures, the client-lawyer relationship in the United States is founded on the lawyer's virtually total loyalty to the client and the client's interests.");
51. Geoffrey C. Hazard, Jr., Triangular Lawyer Relationships: An Exploratory Analysis, 1 GEO. J. LEGAL ETHICS 15, 21 (1987) ("In the relationship with a client, the lawyer is required above all to demonstrate loyalty.").
52. Lawyers' agency on behalf of clients is subject to their duties as officers of the court and as public citizens. See MODEL RULES OF PROF'L CONDUCT pmbl. (2008) ("A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice."). Conceptually, the attorney-client relationship may thus be more accurately characterized not as an "ordinary agency" but rather as a "limited agency."
53. See Eli Wald, Loyalty in Limbo: The Peculiar Case of Attorneys' Loyalty to Clients, 40 ST. MARY'S L.J. 909, 952-54 (2009).
54. Of course, even individual lawyers do not quite fit within the agency model because rather than act as agents, they tend to exercise authority vis-a-vis their individual clients, but that is exactly why the Rules of Professional Conduct extend protection to clients and attempt to keep lawyers at bay.
55. See Wilkins, supra note 27.
56. Id. at 2105.
57. Id. at 2113-14.
58. See MODEL RULES OF PROF'L CONDUCT R. 1.2(b) (2008).
59. Wilkins, supra note 27, at 2070.
60. Id. at 2125-26.
61. Milton C. Regan, Jr. & Palmer T. Heenan, Supply Chains and Porous Boundaries: The Disaggregation of Legal Services, 78 FORDHAM L. REV. 2137, 2142-48 (2010).
62. Id. at 2148-59.
63. Paul D. Paton, Multidisciplinary Practice Redux: Globalization, Core Values, and Reviving the MDP Debate in America, 78 FORDHAM L. REV. 2193, 2196 (2010)
64. (citing LEGAL SERVS. BD., WIDER ACCESS, BETTER VALUE, STRONG PROTECTION: DISCUSSION PAPER ON DEVELOPING A REGULATORY REGIME FOR ALTERNATIVE BUSINESS STRUCTURES 4 (2009)).
65. Id. at 2198-99.
66. Id. at 2210.
67. Id. at 2197, 2222.
68. Eli Wald, Glass Ceilings and Dead Ends: Professional Ideologies, Gender Stereotypes, and the Future of Women Lawyers at Large Law Firms, 78 FORDHAM L. REV. 2245 (2010).
69. Id.
70. RONIT DINOVITZER ET AL., AM. BAR FOUND. & NALP FOUND, FOR LAW CAREER RESEARCH & EDUC, AFTER THE JD II: SECOND RESULTS FROM A NATIONAL STUDY OF LEGAL CAREERS (2009).
71. Joyce S. Sterling & Nancy Reichman, So, You Want To Be a Lawyer? The Quest for Professional Status in a Changing Legal World, 78 FORDHAM L. REV. 2289, 2298-99 (2010).
72. Id. at 2293-96.
73. Id. at 2302.
74. Id. at 2302-09.
75. Stephan Landsman, The Risk of Risk Management, 78 FORDHAM L. REV. 2315 (2010).
76. This is akin, perhaps, to the professionalization and institutionalization of pro bono and the creation of pro bono counsel. See Cummings & Rhode, supra note 8.
77. Needham, supra note 27.
78. See JOHN C. COFFEE, JR., GATEKEEPERS: THE PROFESSIONS AND CORPORATE GOVERNANCE 231 (2006);
79. see also ANTHONY T. KRONMAN, THE LOST LAWYER (1993) (arguing that increased competition and specialization have limited the ability of attorneys to exercise "practical wisdom" and act as "Lawyer-statesmen" on behalf of their clients and the public interest);
80. Wilkins, supra note 27, at 2125.
81. Cummings & Rhode, supra note 8, at 2394-408, 2430-34.
82. Id. at 2409-13.
83. Id. at 2413-19.
84. Id. at 2364-65, 2426.
85. Richard Abel, The Paradoxes of Pro Bono, 78 FORDHAM L. REV. 2443, 2443 (2010).