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Change Management and the Future of Legal Education
 

Change Management and the Future of Legal Education

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Presentative given by Professor William Henderson at the annual meeting of the Association of American Law Schools, January 4, 2013, New Orleans, LA

Presentative given by Professor William Henderson at the annual meeting of the Association of American Law Schools, January 4, 2013, New Orleans, LA

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  • Not for your education, but to show my bona fides
  • corporate or gov’t – made $6,300.Non-salaried lawyers in private practice – i.e., the owner of the firm – made $5,199Gov’t made $5,518. Lawyers in 9+ firms made 5x solo lawyers Limited specialization Your incomes today come from specialization
  • More regulation More litigation, commercial, often pertaining to litigation. More innovation, often from Wall Street More complex business that span state and national boundariesLawyer Per Capital: 1 lawyer for every 700 Citizens in 1950 1 in 280 in 2000The work was there to support it. But we were more specialized – and productive.
  • Susskind’s continuum:Bespoke -> Standardized -> Systematized -> Productized -> CommoditizedLawyers want to stay in bespoke = Unique, Custom-made -> It costs more; and it is more familiarBut customers want to the cost saving and high quality of moving the continuum: prices go down, quality goes up.Further, Systematized/Productized space can be very lucrative -> But you most continually innovate to stay there.What skills?: IT, Systems engineering, Finance, Marketing, Law Work together Lawyer is not incharge
  • Axiom, Clearspire, Novus Law, Pangea3, LegalZoom, RocketLawyer, Huron Consulting Group, Practical Law Company, MindcrestAll of these companies are financed by non-lawyer investment.Innovation does not need an amendment of Rule 5.4 to happen. ABA Commission on Ethics 20/20Rather, 5.4 is a bar to traditional law firms WITH STRONG BRANDS collaborating with brilliant nonlawyers with technological knowledge.
  • All of these companies are financed by non-lawyer investment.Innovation does not need an amendment of Rule 5.4 to happen. ABA Commission on Ethics 20/20Rather, 5.4 is a bar to traditional law firms WITH STRONG BRANDS collaborating with brilliant nonlawyers with technological knowledge.
  • Susskind’s continuum:Bespoke -> Standardized -> Systematized -> Productized -> CommoditizedLawyers want to stay in bespoke = Unique, Custom-made -> It costs more; and it is more familiarBut customers want to the cost saving and high quality of moving the continuum: prices go down, quality goes up.Further, Systematized/Productized space can be very lucrative -> But you most continually innovate to stay there.What skills?: IT, Systems engineering, Finance, Marketing, Law Work together Lawyer is not incharge

Change Management and the Future of Legal Education Change Management and the Future of Legal Education Presentation Transcript

  • Change Management andthe Future of Legal Education AALS Annual Meeting New Orleans, LA January 4, 2013 William D. HendersonIndiana University Maurer School of Law
  • The solutionPractice Arc Informed byMastery theory and data Arc under Traditional model Graduation Time
  • A short story on failure (or, my qualifications to give this talk)
  • Jobs Class of 2007 Class of 1991 Median = $40,000 Median = $65,000One year private tuition = $32,367 One year private tuition = $11,728 4
  • Query:What competencies did Hendersonneed to achieve his professionalobjections? • 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 Applicants Projected applicants for Fall22.4% decline from 2012 2013 entering class: 54,137
  • Private Practice Circa 1948 Lawyers by Role • 163,000 LawyersAssociates • 45.0% w/ college 4% Gov’t, degrees; 74.5% w/ law In-House degrees 11% • 1.64 lawyers per firm • 1.9 % lawyers in firms of Partners, 9+ partners 24% Solos, 61% Source: Blaustein, “The 1949 Lawyer Count,” 50 ABA J 370 (1950)
  • 20th CenturySupply Demand
  • US Lawyer Population (1951-2000)1,200,0001,000,000 800,000 600,000 400,000 200,000 0 1951 1960 1971 1980 1991 2000 Year Lawyer Population
  • US Lawyer Population (1951-2000)1,200,000 800 7001,000,000 600 800,000 500 600,000 400 300 400,000 200 200,000 100 0 0 1951 1960 1971 1980 1991 2000 Year Lawyer Population
  • Total Law Firm Employment, 1998 to 2010 1,200,000 1,122,723 1,074,994 1,100,000 988,898 1,000,000 900,000Total Number of Employees 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Generated by William Henderson Year (June 2012) Total Employment 2 per. Mov. Avg. (Total Employment)
  • Incoming 1L Classes, ABA-Accredited Law Schools 1985 to 201160,000 15% increase in Law Schools (175 to 201) 19% increase in 1L enrollment50,00040,00030,00020,00010,000 0 Incoming 1L Class, All Schools 2-Year Moving AverageSource: ABA Section on Legal Education and Admission to the Bar, Chart generated by William Henderson (July 2012)
  • % of Entry Level Jobs in Private Practice 1985 to 201170%60%50%40%30%20%10% 0% % of Entry Level Jobs in Private Practice 2-Year Moving AverageSource: NALP Bulletin, July 2012, charts generated by William Henderson
  • ,
  • Outcomes for the Class of 2011 Other Outcomes, 32.8 % Bar Passage Required, FTLT, 5 5.2%Professional FTLT, 3.9% JD Advantaged FTLT, 8.1%
  • Outcomes By USN Rank 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Top 14 83.1% 10.9%Tier 1 59.9% 30.2%Tier 2 53.6% 33.3%Tier 3 48.2% 37.3%Tier 4 45.1% 41.5% BarPassage FTLT JD Advantaged FTLT Professional FTLT Other Outcomes
  • Market in 2013Supply Demand
  • Susskind’s ParadigmBespoke Standardized Systematized Packaged Commoditized
  • Change in # of Employees since 1998 Legal Services Industry Law Offices vs. All Other Legal Services 160% 140% 120% % Growth in Employees 100% 80% 60% 40% Since 2004: Law Offices: -47,729 jobs All Other Legal Services: + 7,696 20% 0%Generated byWilliam Henderson(June 2012) Offices of lawyers All other legal services
  • “Every dollar I get, there are three that no longer go to Big Law” -- LPO Chief Executive (non-lawyer)
  • Circa 2012 Legal Profession Legal Services Industry Legal Industry Asia, Automation, Abundance
  • Susskind’s ParadigmBespoke Standardized Systematized Packaged Commoditized Human capital needed: • Information technology • Systems engineering • Finance • Marketing • Project Management • Law
  • The solutionPractice Arc Informed byMastery theory and data Arc under Traditional model Graduation Time
  • Competencies(or, remember Henderson’s failures)
  • MacCrate Report (1992)10 Skills 4 Values1. Problem Solving 1. Providing competent2. Legal analysis and reasoning representation;3. Legal research 2. Striving to promote4. Factual investigation justice, fairness, and morality;5. Communication 3. Striving to improve the6. Counseling profession;7. Negotiation8. Litigation and alternative dispute 4. Professional Self Development resolution procedures9. Organization and management of legal work10.Recognizing and resolving ethical dilemmas. 35
  • Predictors of Success at Work and in Life Spencer (1993)• Achievement Orientation. The • Interpersonal Understanding. desire to attain standards of Hearing the motives and excellence and do feelings of diverse others. better, improve performance • Self-Confidence. A person’s• Initiative. Acting to attain goals belief in his or her own and solve or avoid problems efficacy, or ability to achieve before being forced by events goals.• Information Seeking. Digging • Impact and Influence. A deeper for information person’s ability to persuade others to his or her viewpoint.• Conceptual Thinking. Making sense of data and using theories • Collaborativeness. Working and algorithms to solve effectively with others to problems achieve common goals. 36
  • LSAC Successful Lawyering Study Shultz and Zedeck (2008) Intellectual & Cognitive Conflict Resolution– Analysis and Reasoning – Negotiation Skills– Creativity & Innovation – Able to See the World Through the Eyes of Others– Problem Solving– Practical Judgment Client & Business Relations – Entrepreneurship Research & Information Gathering – Networking and Business Development– Researching the Law – Providing Advice & Counsel & Building– Fact Finding Relationships with Clients– Questioning & Interviewing Working with Others Communications – Developing Relationships within the– Influencing and Advocating Legal Profession– Writing – Evaluation, Development, and– Speaking Mentoring– Listening Character Planning and Organization – Passion and Engagement– Strategic Planning – Diligence– Organizing and Managing One’s Own – Integrity/Honesty Work – Stress Management– Organizing and Managing Others – Community Involvement and Service (Staff/Colleagues) – Self-Development 37
  • Predictors of Success at Work and in Life Spencer (1993)• Achievement Orientation. The • Interpersonal Understanding. desire to attain standards of Hearing the motives and excellence and do feelings of diverse others. better, improve performance • Self-Confidence. A person’s• Initiative. Acting to attain goals belief in his or her own and solve or avoid problems efficacy, or ability to achieve before being forced by events goals.• Information Seeking. Digging • Impact and Influence. A deeper for information person’s ability to persuade others to his or her viewpoint.• Conceptual Thinking. Making sense of data and using theories • Collaborativeness. Working and algorithms to solve effectively with others to problems achieve common goals. 38
  • 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 visionto someone in five minutes or less andget a reaction that signifies bothunderstanding and interest, you arenot done with this phase of thetransformation 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)