Will All Law Be Business Law?

On the one hand, Indiana lawprof Bill Henderson has been a tenacious proponent of changing the way law schools teach law, On the other hand, he’s fallen under the spell of shiny magic bullets, whether technological or systemic (as in, futurist crackpot Richard Susskind’s “the end of lawyers”). Once on the slippery slope of “why not,” ignoring the damn good reasons why not, it’s hard not to slide to the bottom. That doesn’t mean he’s totally wrong.

According to the recently released government Economic Census data, lawyers disproportionately represent business rather than people.

The work of lawyers is increasingly the work of businesses rather than people.  This conclusion flows from recently released Economic Census data, which is the U.S. Government’s “official five-year measure of American business and the economy.”

For the two most recent years (2007 and 2012), the Economic Census data includes an analysis called Revenues/Receipts by Class of Customer for Selected Industries.  The chart below compares these two years for Offices of Lawyers (NAICS 541110).

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Well sure, lawyers represent whomever retains them. But Bill’s point is that people aren’t hiring lawyers as they had in the past, and the trend line is pretty clear. But it’s not just who hires lawyers, but what they’re paying lawyers as well.

Further, among lawyers in solo and small firms — the primary practice setting for people lawyers — income had dropped significantly in inflation-adjusted dollars. In contrast, lawyers in large firms and in corporate legal departments experienced significant gains.

Few clients, lower fees. Tough times or the future of law?

We will not know definitively until 2020 or 2021 when the Census Bureau releases the class of customer data from the 2017 Economic Census, yet a further decline certainly seems likely, particularly as services like LegalZoom and RocketLawyer continue to target the retail market.  Separate and apart from these new entrants, to what extent is the diminution in people lawyers driven by declining real incomes within the middle class?

While this is happening, our beloved ABA is busy figuring out how much it loves non-lawyers and cries over Access to Justice initiatives. So if the demand for “people lawyers” is dropping together with revenues, why not let non-lawyers get their piece of the pie as well. What could possibly go wrong?

Focusing on where the money is, Bill suggests that this shift from people to business has ramifications for what law schools should be teaching students:

It is possible that the archetypical images of private practice lawyers are becoming more and more out-of-sync with what is happening in the actual market.  For those creating law school curricula or setting policy around access to justice, we are going to need new mental models of what it means to be a lawyer.

After all, if the only demand for law school grads that will offer them a living wage is representing businesses, then why bother with courses relating to human beings? It’s not like they need to know anything about people if people won’t retain them.

Yet, there’s also Bill’s bow to the opposite extreme, the A2J crowd, calling for lawyers to take an oath of poverty so that people who don’t want to pay for lawyers, lest they have to do without a new iPhone, can have their needs fulfilled by people who took on a quarter mil in debt, gave up three years of their life,* and whose children will never need to eat every night because social justice. What we’re seeing is a dichotomy develop in academia, where some law schools proclaim their focus on training lawyers to represent the poor and downtrodden, while others funnel their grads to high paying jobs representing corporations to crush the downtrodden.

So is Bill right, that we need “new mental models of what it means to be a lawyer”? Is the old archetype, the small/solo practitioner, the trial gunslinger, Atticus (before he became a racist) Finch, the lawyer whose day is spent holding hands and wiping away tears, dead? Maybe. It’s not that the needs have changed. If anything, the need for competent legal representation for individuals is in greater demand today than ever, given that regulations govern the most basic of everyday functions and cries for even greater regulation are heard hourly.

But that doesn’t address two problems arising from this data. First, if legal representation is watered down to mediocrity, lower cost but generic and limited,** should we be training lawyers to be willing participants in a system that meets the desires of people by reducing the quality of lawyers?

Second, can there be a legal profession for people if the only promise of law school is to work for businesses if one wants to earn a decent living, or be left to enjoy the ascetic beauty of poverty by choosing to represent people?  Might this have some impact on what kid says to themselves, “no, I want to go to law school so that I can spend the rest of my life earning the average salary of the assistant manager at Dairy Queen, watch my children eat fish sticks three times a week and never own a new car?”

But since Bill and the A2J crowd are happy with some watered down, barely competent version of legal representation so that the walking poor with their new iEarring headphones won’t have to suffer the indignity of paying for a lawyer, the few misfits who pick representing people in the future shouldn’t be a problem. After all, don’t poor people get what they deserve?

And you think we have an over-incarceration problem now?

The trends Bill speaks to are real. The causes of these trends, however, are wrapped in the pretty pink bow of lawyers sucking it up and suffering for the benefit of those people who would prefer not to spend their hard-earned money on them, even though they ironically are all in favor of the continued regulation and criminalization of everything, thus giving rise to their own need for legal representation.

By ignoring this, and pretending that shiny solutions will change everything, it may well give rise to Susskind’s crackpot vision that there will be no lawyers in the future. Not because they’re not desperately needed, but because the people who want so much to help stem the sad tears of the poor have starved lawyers out of business.

*One of the transitory shiny ideas was to reduce three years of law school to two, thus saving a year of tuition and opportunity cost.  It was all the rage for about ten minutes, until schools realized that nobody wanted their two-thirds lawyers.

**The contention is that “bespoke” (which is great for suits, but apparently bad for cheap legal help) representation by competent and zealous professionals is not needed and unaffordable, and so corporate entities should be allowed to provide generic and quasi-trained representatives named Tiffany or Rajesh at 1-800 telephone numbers to fill the gap. They’ll be fine. Don’t worry. That dress looks gorgeous, and really doesn’t make your butt look fat.

10 thoughts on “Will All Law Be Business Law?

  1. Rick Horowitz

    Ironic timing on your post: last night I went to buy a hard case for my new ukelele, because the soft one won’t stay up well enough on the street to catch coins when I play to supplement my criminal-defense-only income in an area where average income is around $19-20k and the median is $42,000.

    I was wearing one of my office t-shirts that has an emblem I designed containing my office info. As a sales guy and I discussed the cost, a customer said to the sales guy, “He’s an attorney! He’s rich!” I said, “You have me confused with the civil lawyers. They’re the rich ones. I only do criminal defense.”

    Fortunately, the sales guy loved the marijuana leaf, and also got a kick out of how “badass” (his word) I looked on the business card he asked for. I got a discount.

    Now I just have to figure out which is the best corner downtown to set up my new venture.

    1. Patrick Maupin

      an area where average income is around $19-20k and the median is $42,000.

      Arguendo, if the average income is $20K and we assume the average income of the top 50% (those making more than $42K) is only $42,0001 (which we will conveniently round down to $42K), then the average income of the bottom 50% must be negative $2K. If the average income of the top 50% is higher than $42K, then the average income of the bottom 50% must be even more negative.

      Are you sure you got a “discount” on that ukelele case?

    2. B. McLeod

      Well, your beloved ABA is helping out the civil lawyers with its new “free legal answers” program. Because law ought to be free for everybody (even though, law school, somehow, is not).

  2. Patrick Maupin

    those people who would prefer not to spend their hard-earned money on them, even though they ironically are all in favor of the continued regulation and criminalization of everything, thus giving rise to their own need for legal representation.

    The faction which never saw any law it liked and the faction which never saw any law it didn’t love are each rightfully scared of the other.

  3. PVanderwaart

    Your friendly neighborhood economist (not me, but I know what he thinks) will point out that if the public is under-served, there is an opportunity for the under-employed attorney. If by chance he can’t make as much money as he would like, that puts him in the same situation as a lot of doctors.

    1. SHG Post author

      Many lawyers will jump at the opportunity to make $25k a year. It’s a shame they won’t be able to keep any of it after debt service, etc., but at least it’s not like they will need offices, telephones, food. That it puts them in the same situation as a lot of doctors (does it really?) doesn’t make it viable. It’s just math.

      And even if it did, what caliber of lawyer (or doctor) do you get after law school with a future of subsistence survival? You want that doc to do your brain surgery?

    2. Mr. Median

      Then you should remind her about George Akerlof’s paper called The Market for Lemons — part of a series that earned Akerlof and colleagues a Nobel prize.

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