Change Management and the Future of Legal Education

AALS Annual MeetingNew Orleans, LAJanuary 4, 2013

William D. HendersonIndiana University Maurer School of Law

Arc Informed by theory and data

The solution

Practice Mastery

Time

Arc under Traditional

model

Graduation

A short story on failure(or, my qualifications to give this talk)

4

Jobs

Class of 2007

One year private tuition = $32,367

Median = $65,000

Class of 1991

One year private tuition = $11,728

Median = $40,000

Query:

What competencies did Henderson need to achieve his professional objections?

• Communication / Presentation• Listener’s perspective• Persuasiveness• Strategic thinking

Change Management

1. Create a Sense of Urgency

“Well over 50% of the companies I have watched fail in this first

phase.” -- Kotter, Leading Change

What are our business problems?

-- High fixed costs

-- Stagnant job market

-- Industry overcapacity (45,000+ 1L seats per year)

-- Near total financial dependence on DOE loans

-- Tenured faculty control hiring and curriculum

-- Law is on precipice of a radical information revolution. See Susskind

16,241 Applicants22.4% decline from 2012

Projected applicants for Fall 2013 entering class: 54,137

Private PracticeCirca 1948

• 163,000 Lawyers

• 45.0% w/ college degrees; 74.5% w/ law degrees

• 1.64 lawyers per firm

• 1.9 % lawyers in firms of 9+ partners

Source: Blaustein, “The 1949 Lawyer Count,” 50 ABA J 370 (1950)

Solos, 61%

Partners, 24%

As-so-ciates

4%Gov’t,

In-House 11%

Lawyers by Role

20th Century

Supply Demand

Sophisticated legal needs

Organizational lawyers

US Lawyer Population(1951-2000)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1951 1960 1971 1980 1991 2000

Year

Lawyer Population

US Lawyer Population(1951-2000)

0

100

200

300

400

500

600

700

800

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1951 1960 1971 1980 1991 2000

Year

Lawyer Population

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

988,898

1,122,723 1,074,994

Total Law Firm Employment, 1998 to 2010

Total Employment Moving average (Total Employment)

Year

Tota

l Num

ber o

f Em

ploy

ees

Generated by William Henderson (June 2012)

19851986

19871988

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20110

10,000

20,000

30,000

40,000

50,000

60,000

Incoming 1L Classes, ABA-Accredited Law Schools1985 to 2011

Incoming 1L Class, All Schools 2-Year Moving Average

Source: ABA Section on Legal Education and Admission to the Bar, Chart generated by William Henderson (July 2012)

15% increase in Law Schools (175 to 201)19% increase in 1L enrollment

19851986

19871988

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20110%

10%

20%

30%

40%

50%

60%

70%

% of Entry Level Jobs in Private Practice1985 to 2011

% of Entry Level Jobs in Private Practice 2-Year Moving AverageSource: NALP Bulletin, July 2012, charts generated by William Henderson

Big Law is Bigger,Change, 2009 to 2012

Outcomes for the Class of 2011

Bar Passage Required, FTLT;

55.2%

JD Advantaged FTLT, 8.1%

Professional FTLT, 3.9%

Other Outcomes; 32.8%

Outcomes By USN Rank

Top 14

Tier 1

Tier 2

Tier 3

Tier 4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

83.1%

59.9%

53.6%

48.2%

45.1%

10.9%

30.2%

33.3%

37.3%

41.5%

BarPassage FTLT JD Advantaged FTLT Professional FTLT Other Outcomes

Market in 2013

Supply Demand

Sophisticated

legal needsOrganizational

lawyers

Susskind’s Paradigm

Bespoke Standardized Systematized Packaged Commoditized

19992000

20012002

20032004

20052006

20072008

20092010

19981999

0%

20%

40%

60%

80%

100%

120%

140%

160%

Change in # of Employees since 1998Legal Services Industry

Law Offices vs. All Other Legal Services

Offices of lawyers All other legal services

% G

row

th in

Em

ploy

ees

Since 2004:Law Offices: -47,729 jobsAll Other Legal Services: + 7,696

Generated by William Henderson (June 2012)

“Every dollar I get, there are three that no longer go to Big Law”

-- LPO Chief Executive (non-lawyer)

Legal Services Industry

Legal Industry

Legal Profession

Circa 2012

Asia, Automation, Abundance

Susskind’s Paradigm

Bespoke Standardized Systematized Packaged Commoditized

Human capital needed:• Information technology• Systems engineering• Finance• Marketing• Project Management• Law

Arc Informed by theory and data

The solution

Practice Mastery

Time

Arc under Traditional

model

Graduation

Competencies(or, remember Henderson’s failures)

35

MacCrate Report (1992)10 Skills

1. Problem Solving2. Legal analysis and reasoning3. Legal research4. Factual investigation5. Communication6. Counseling7. Negotiation8. Litigation and alternative

dispute resolution procedures9. Organization and management

of legal work10.Recognizing and resolving

ethical dilemmas.

4 Values

1. Providing competent representation;

2. Striving to promote justice, fairness, and morality;

3. Striving to improve the profession;

4. Professional Self Development

36

Predictors of Success at Work and in LifeSpencer (1993)

• Achievement Orientation. The desire to attain standards of excellence and do better, improve performance

• Initiative. Acting to attain goals and solve or avoid problems before being forced by events

• Information Seeking. Digging deeper for information

• Conceptual Thinking. Making sense of data and using theories and algorithms to solve problems

• Interpersonal Understanding. Hearing the motives and feelings of diverse others.

• Self-Confidence. A person’s belief in his or her own efficacy, or ability to achieve goals.

• Impact and Influence. A person’s ability to persuade others to his or her viewpoint.

• Collaborativeness. Working effectively with others to achieve common goals.

37

LSAC Successful Lawyering StudyShultz and Zedeck (2008)

Intellectual & Cognitive– Analysis and Reasoning– Creativity & Innovation– Problem Solving– Practical Judgment

Research & Information Gathering

– Researching the Law– Fact Finding– Questioning & Interviewing

Communications– Influencing and Advocating– Writing– Speaking– Listening

Planning and Organization– Strategic Planning– Organizing and Managing One’s

Own Work– Organizing and Managing Others

(Staff/Colleagues)

Conflict Resolution– Negotiation Skills– Able to See the World Through the

Eyes of Others

Client & Business Relations – Entrepreneurship

– Networking and Business Development

– Providing Advice & Counsel & Building Relationships with Clients

Working with Others– Developing Relationships within the

Legal Profession– Evaluation, Development, and

Mentoring

Character– Passion and Engagement– Diligence– Integrity/Honesty– Stress Management– Community Involvement and

Service– Self-Development

38

Predictors of Success at Work and in LifeSpencer (1993)

• Achievement Orientation. The desire to attain standards of excellence and do better, improve performance

• Initiative. Acting to attain goals and solve or avoid problems before being forced by events

• Information Seeking. Digging deeper for information

• Conceptual Thinking. Making sense of data and using theories and algorithms to solve problems

• Interpersonal Understanding. Hearing the motives and feelings of diverse others.

• Self-Confidence. A person’s belief in his or her own efficacy, or ability to achieve goals.

• Impact and Influence. A person’s ability to persuade others to his or her viewpoint.

• Collaborativeness. Working effectively with others to achieve common goals.

2. Building the Guiding Team

“Major renewal programs often start with just one or two people. In cases of successful transformation efforts, the leadership coalition grows over time.”

-- Kotter, Leading Change

3. Get the Right Vision

“If you can’t communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not done with this phase of the transformation phase,”

-- Kotter, Leading Change

Resources

• Henderson, A Blueprint for Change, Pepperdine Law Review (2013)

• Fred Nichols, Change Management 101: A Primer (2008)

• Chris Argyris, Teaching Smart People How to Learn, Harvard Business Review (1991)