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From the President

And Miles to Go

By Howard B. Miller
President, State Bar of California

Howard MillerIt is traditional in the final column of a State Bar President’s year to recount what has been accomplished during the year.

And you and I did a lot this year. After the Governor’s veto of the 2010 State Bar dues bill in October, we managed, without any disruption in State Bar activities, the passage of a new 2010 dues bill, with no opposition in either house of the legislature, and signing by the Governor.

After eight years, by working together this year on a very tight schedule, we have adopted and are passing on to the Supreme Court an entire new set of California Rules of Professional Conduct. We had to deal forcefully with attorney misconduct in the housing foreclosure crisis, which was also a crisis for the legal profession. Internally, we have already filled two of the senior management positions opened by resignation and vacancies and are on schedule to filling the third sometime in September.

We were able to do these things because the State Bar family collectively and cooperatively decided to work together to renew itself.

As is true in most organizations and at most times, however, what has been accomplished is a measure of what still needs to be done. These are not ordinary times in the legal profession or in the State Bar. We are living through the most radical transformation of the legal profession in at least 50 years.

As of this writing, the text of the 2011 dues bill in the legislature requires a new special commission of the State Bar to focus and report back on public protection responsibilities and examine governance structures that can meet those responsibilities.

The changes in the legal profession are being driven by many factors: the economy, budget issues impacting courts, cost control through alternative billing arrangements, technology, Legal Process Outsourcing (LPO), firm layoffs leading to new firm structures, internationalization and off-shoring of legal services. All of these changes and more are having a dramatic effect on employment opportunities for new lawyers.

Without going into an elaborate analysis of all those factors, consider the following:

On a regular basis, one half of all those who take the New York state bar exam are non-U.S. citizens who are graduates of foreign law schools, eligible to take the New York bar after obtaining an LL.M. from an American law school in one year. And after passing the New York bar, if they wish, they can also daisy chain out of New York through the District of Columbia to many other states. (Not California. They also could have taken the California bar. For reasons everyone reading this will understand, they prefer to take the New York bar.) And in at least one of those other jurisdictions, England and Wales, non-lawyers can own law firms, with all that implies for the financing of legal services.

Canadian provinces — the equivalent of our states — pursuant to legal services National, Territorial, and Quebec Mobility Agreements have reciprocity among themselves, with some technical differences for Quebec. Lawyers admitted in one province basically will be able to practice in all others. In 2009, Quebec and France entered into a Quebec-France Lawyer Mobility Agreement that will permit lawyers in either jurisdiction to practice in the other. The province of British Columbia is in discussions with the State of Washington about reciprocity between B.C. and that state. And once admitted to the State of Washington, lawyers can also daisy chain their way to admission in many other states (again, not in California).

Even if California can continue to fight the reciprocity wave, the other changes for the legal profession are a tsunami from which we cannot run. 

First in England, and now in the United States, there are hedge funds with serious money allocated to investments in Legal Process Outsourcing (LPO). Legal Process Outsourcing involves companies, under the supervision of a lawyer in the United States, that do all the work junior lawyers have traditionally done, such as document review, discovery related to documents, first drafts of briefs and legal research. Of course those employed by LPO companies neither are compensated nor billed at the rate junior lawyers have been in the past. That is the whole point. And LPOs in India, that combine outsourcing with off-shoring, are now actively recruiting U.S. lawyers to move to India to supervise work there — and not at what used to be standard U.S. compensation rates. (Come to the State Bar annual convention in Monterey, and at a Sept. 24 lunch hear about all this and more from Richard Susskind, one of the most perceptive analysts of the future of lawyering.)

Combined with the economy, all of this has already had employment impacts in the U.S. Administrators of law schools give ambiguous responses when I ask them about the employment numbers for the class of 2010. But when I question graduates of that class from very good law schools, they describe an employment environment in which a small proportion of their classmates, less than 50 percent, have true full time jobs as lawyers from third parties — not counting those few who have jobs in family firms, or who work part time on things like document review or other menial legal work for $15 an hour, or have been given temporary “research” jobs at their law schools.

All of these effects can be summarized in a simple idea. Because of changes in technology, finance, and local, national and international regulatory rules, much of the law is moving from craft to industry.

There will always be a need for craft. The extraordinary ability of a particular trial lawyer in front of a jury, the exceptional deal maker, the great negotiator, the brilliant appellate advocate, and the insightful settler of cases will always be in great demand. But for the quotidian tasks of the lawyering — document discovery and review, document drafting, basic research, daily research and brief writing, and many other regular tasks — the law is becoming industrialized, with all that means for the pricing, demand and supply of legal services.

These changes present challenging questions for the State Bar. The bar can no longer only function as part of an accepted legal landscape by doing its traditional jobs of admissions and regular enforcement. It must answer more difficult questions as part of its mission of aiding the bar and protecting the public. How do we train young lawyers in what they are not trained in law school — how to run a law practice? How do we squeeze the great demand for litigation and dispute resolution though the budget-narrowed gates of the public court system? How do lawyers efficiently provide necessary services to clients while earning a decent living?

Perhaps this transformative moment will help us face a more longstanding and deeply troubling question: How do we serve the public in this environment by providing representation to all those who need it in their daily lives and who do not now get it?

These are not easy questions. The answers start with recognition that neither the State Bar nor the legal profession can live comforted by the ancient biblical wisdom that sufficient unto the day is the evil thereof. What is occurring is not evil for clients. And the day is here.