The Young Texas Lawyer

Imagine taking a single bar exam for each of the fifty states. Imagine wanting to move from Texas to California without having to worry about sitting for another three day test. Think you’re dreaming? Well your dream might be closer to reality than you think.

By 2010 at least 10 states are going to be switching to what they are calling a Uniform Bar Exam and 22 others are preparing to adopt the test in the next few years. Recently, many jurisdictions have began admitting out-of-state attorneys by motion to state court rather than forcing them to retake the state’s bar exam. The test has been developed by the National Conference of Bar Examiners and will allow freshly minted JD’s to take their bar score with them from state to state. Propents are saying that such a system will improve both the quality of exams in smaller states and open up the legal job market up nationally, rather than keeping it regional.

The scenario of going from Texas to California may not be there quite yet though. Texas, California, New York, the District of Columbia, Florida and Illinois have yet to embrace such an idea. Their argument is that such a test would miss concepts that are very important to state law. In Texas for example, Oil and Gas law is a fairly important concept of the bar exam. There are also fears that the uniform test would take control from state bars and put far too much power in the hands of the NCBE.

Such a test obviously has its pros and cons, but there might be something to allowing attorneys to move from state to state. One thing is certain, it would definitely open up the job market for attorneys in states who have been hit harder by the economic downturn, but perhaps at the cost of the job seekers in those states.

Four months ago, Afif Ghannoum, a 29-year-old attorney launched The Ghannoum Law Firm. The firm focuses almost exclusively on transactions and intellectual property for the biotechnology industry. What sets them apart is the way the firm started. Ghannoum used Craigslist to help launch his firm by advertising for potential partner-level attorneys. His Craigslist post received nearly 500 responses from lawyers in Ohio and New York City.

The firm currently has nine lawyers that operate out of a 500-square-foot office in Cleveland, but do most of their work from home and make client site visits in the same way that many information technology consultants do. The Med City News has an in-depth interview with Mr. Ghannoum in which he discusses how the firm has already attracted 20 clients in four short months. The firm attracts clients based on their bare bones approach and it’s ability to pass cost savings on to clients without sacrificing quality.

Although some may see this as a completely radical way to start a firm, in reality it’s just a passing of the guard from the old way of doing things to the new way. The consulting and advisory industry has been thinking outside the box for almost a decade now in setting up their business structure, all it took was a near economic meltdown for the legal industry to begin doing the same.

To all the young lawyers in the Houston area, I say this: Rick Casey is giving us all a bad name. In his June 23 column, No defense: ‘My lawyer said I could,’ he takes Harris County district clerk Charles Bacarisse to task for the sin of having consulted an attorney.

The implication of Mr. Casey’s article is that lawyers are an unethical bunch who aren’t fit to give anyone advice on the “right thing”. As evidence of his proposition, he cites the “recent survey” canard familiar to all lawyers and law students.

“The last poll I saw showed them ranking barely above car salesmen and journalists in public esteem.”

Look, most lawyers have met ne’er-do-well lawyers during the course of practicing, but ours is a noble and ethical profession. Lawyers have more ethical rules and guidelines than nearly any other profession, and unlike many professions, our livelihoods are directly related to how ethical we are. Don’t believe me? Take a look in the back of the bar journal, and read the list of former lawyers who didn’t act ethically.

That insult aside, Mr. Bacarisse sought a legal opinion from the County Attorney regarding the effect of the ethics ordinance – a law – before engaging in activity that he thought might run afoul of the law or the city’s ethics rules. For that, Mr. Bacarisse ought to be praised, not vilified.

It’s no wonder Mr. Casey’s poll found journalists are held in lower esteem than lawyers.

Written by YTL Contributing Author Eric Hudson

As we wrote back in February, there are inherent problems with the billable hour. Now, according to Forbes magazine, there are actually changes in the fee structure of law firms. The ever evolving financial crisis has reshaped many businesses and law firms are starting to see that they must change as a result. The freezing of credit markets have brought the transactions market to a screeching halt, thus hampering the need for many legal services. Reduced revenues and profits have also put non-essential legal services on the chopping block with every other budget item.

Firms are starting to ditch the billable hours approach and use flat rates to lure top-notch corporate clients. By the same token, clients are beginning to pay closer attention to the services they receive from their lawyers and the value that those services bring. In fact in the United Kingdom, General Electric took a more radical approach and staged an online auction to determine who would handle their legal representation. Large European firms are going through a period of rapid deregulation after Britain’s Legal Services Act of 2007, amongst other things, allows for non-lawyer ownership of law firms. Such approaches have yet to materialize in the U.S. but regulators might be looking overseas to see how it works.

For the first time since 1991, profits-per-partner and revenue-per-lawyer were both down in 2008 for the AmLaw 100 firms. With the continued weakness these firms have seen through the first part of 2009, it looks like they will have another drop in both categories. The WSJ Law Blog sat down with AmLaw Editor-in-Chief Aric Press and went over the numbers. As we’ve been saying since this recession started, things are changing for large bloated law firms. The quick and nimble can survive and the larger they are the harder it’ll be.

According to Above the Law, Baker Botts has joined in on the layoffs that have plagued the rest of the nation for months. Texas firms were initially better positioned to handle the economic slow down, but at this point “the recession has been so deep and long lasting… that [Baker Botts] regrettably have also had to reduce our lawyer and staff levels through selective layoffs,” according to a statement from Baker Botts.

A firm spokesperson from Gardere Wynne Sewell also let Above the Law know that “given the current downturn in economic conditions and the unprecedented levels of economic
uncertainty, Gardere is taking steps to adjust its legal and non-legal staffing levels.”

The details are in the links.

It appears as though the layoffs will continue to get bigger and badder. Yesterday, four firms announced that they were letting go of more than 300 attorneys and 500 support staff. According to the U.S. Department of Labor, the legal sector has lost 4,200 jobs in February and 1,300 in January.

Courtesy of The American Lawyer, we now have the Top 10 Am Law 100 firms who have laid off the highest percentage of associates:

Yesterday was a dark day for those employed by big law firms all over the country. The unofficial count from Above the Law is 828, Law.com has the number at “almost 800,” and the Wall Street Journal is asking if it is “the darkest day ever for big law firms.” Regardless of the eventual number, things are going to get worse according to industry insider Peter Zeughauser. “There will be more, materially more. I’m aware of some big ones coming up.”

An already resume saturated market is about to have more paper added to the stack. The business model for the super firm might be on life support, but perhaps this is an opportunity for the far more nimble small and mid-size firms to step up. The Titanic couldn’t turn quick enough to miss an iceberg, but I guarantee you that a speedboat could have.

Paul Lippe of The American Lawyer makes a bold prediction for the future of the leverage model, it’s over. It is a must read, if for nothing else, to get a brief history on how associate salaries sky rocketed and where the current law firm business model came from. It’s also worth reading American Lawyer’s “Past the Tipping Point.”