Structural or cyclical?
By Howard B. Miller
President, State Bar of California
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| Howard Miller |
The most important question about what the courts and the legal profession — and the State Bar — are now going through is whether it is structural or cyclical.
If both the courts and the profession, especially in California, are simply in the down part of a cycle, with the world to return as it was in 2007, then we can look to temporary fixes and holding actions and wait for the wheel to turn.
But what if we face structural change? One of America’s most well known and successful business leaders was famous for beginning meetings at his company and its subsidiaries by saying: “Tell me the bad news first. The good news I can always deal with.” So this column.
There are serious reasons to think we are in the midst of fundamental structural change.
The Courts
For the courts, there is the state budget. The state deficit numbers over the next 18 months are staggering. The competition for state dollars is desperate. Federal courts are beginning to unsettle existing political compromises in a way that will increase pressure. Constitutionally there are priorities for debt service, education and federal mandates well ahead of court funding, and claims for health and welfare in which lives are at stake also are ahead of concerns for court funding for political reasons. There are fewer lawyers than ever in the legislature who would have a gut understanding of the needs of the justice system. All those things impact even our closest friends and supporters in state government from accomplishing for us the things we need. And there are no realistic projections that in a reasonable period of time those factors will change.
In the future we may look back at the decision the Judicial Council had to make in July, and reinforce in January, to close all courts one day a month as the easiest decision it will have had to make during this crisis.
Lawyers
For the legal profession, change is everywhere. The “Big Law” model of the graduates of the best law schools being hired at $160,000 a year and staying on an escalator of success is broken. Thousands of our best-educated, highest-performing lawyers who have relied on that model have been laid off and are looking for but can’t find work.
It is not just the economy. Clients are in rebellion at the billable hour business model. They have almost unanimously concluded that they want to buy value, not hours. Clients and firms of all sizes are now wrestling with alternative billing structures. Some may still be in denial that whatever the alternative, fees will be lower.
The cost of legal education has skyrocketed, not just at private schools. At Berkeley Law and UCLA, tuition alone is now around $38,000 a year. With many fewer jobs available, students are graduating with combined undergraduate and law school debt of well over $150,000.
Change
International outsourcing, technology and the Internet are dramatically increasing the way clients can obtain legal advice. (See legalzoom.com as one example.) In the United Kingdom clients of the large “magic circle” firms are sending significant amounts of legal work to India, to be worked on by qualified solicitors and barristers, at less than 20 percent of the cost of sending it to the London firms. In Beijing, there is an English language-only law school, headed by Jeffrey Lehman, former dean of the University of Michigan Law School and former president of Cornell University, that intends to award J.D. degrees and apply for accreditation as an ABA law school, permitting its graduates to take the bar exam in any U.S. jurisdiction. You can bet that, as from India, the services of its graduates will be offered from Beijing at significantly lower cost than those of highly educated lawyers in California. The days of clients paying $500 an hour for fifth-year graduates of leading law schools appear to be drawing to a permanent end. That is structural change.
In addition, in a way we are being insulated — for a while — from even more fundamental change. In England and Wales, legal services will soon be able to be offered by Alternative Business Structures (ABS) — companies wholly owned by non-lawyers. Solicitors and barristers are up in arms at the prospect of competing with “Tesco law” (Tesco being the rough equivalent of Walmart).
The Challenge
So, if this in fact is structural, what do we do? First, in phrases used by Abraham Lincoln during far more critical days: “As our case is new, so must we think anew, and act anew. We must disenthrall ourselves.”
We must return to first principles of what lawyers and courts are for. The legal profession does not exist for the sake of lawyers, and courts do not exist for the sake of judges. Both exist to serve clients and the public. Clients and the public demand justice and fairness, and have some interest in the elaborate and sophisticated arguments we make on those issues. But clients and the public are also interested in time and cost. That is where we have let them down. Our court and lawyer processes are often embarrassingly oblivious to client concerns of time and cost.
This will develop into a long discussion. It can be delayed, perhaps, for a short while. But it cannot be avoided.
Everyone who does civil litigation knows it involves an enormous amount of wasted — and costly — time. As a beginning, courts may have to lead more judges to focus intently on management of the cost of individual cases. How early, meeting in a joint consultation with a judge-manager, can we identify the two or three key factual and legal disputes in every case and tee them up for early decision, to promote settlement and resolution? If it must go to a courtroom, do we really need to permit three-hour cross-examinations when 45 minutes should do for well-trained lawyers? Do we do all trials with a chess clock and every element having its fixed time? These and other questions will be uncomfortable for judges and lawyers alike, but unless we are willing to deny large numbers of litigants access to any courtrooms at all, these questions and others like them will need to be asked.
Lawyers will need to have very candid discussions with clients, not about billable hours, but about what the value is that clients expect lawyers to achieve. Lawyers will need to itemize the results they expect to achieve and measure their compensation against those expectations. A pattern reported by the Elkins commission, for example, of lawyers in family law cases billing by the hour at the beginning of the case until the clients can pay no more, then withdrawing and leaving the client to pro per representation at critical parts of the case, is a model that needs be looked at critically by all concerned, including judges handling those cases.
None of this will be easy. As the State Bar has dealt with the Governor’s veto of our dues bill and its own management issues, we have had to deal with similar uncomfortable issues in our own house. But neither the State Bar, the profession nor the judiciary can turn a blind eye to any of this. “Justice, Justice, shalt thou pursue.” That means all of us, whatever the discomfort.