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Change Management and the Future of Legal Education
1. Change Management and
the Future of Legal Education
AALS Annual Meeting
New Orleans, LA
January 4, 2013
William D. Henderson
Indiana University Maurer School of Law
2. The solution
Practice
Arc Informed by
Mastery
theory and data
Arc under
Traditional
model
Graduation Time
3. A short story on failure
(or, my qualifications to give this talk)
4. Jobs
Class of 2007 Class of 1991
Median = $40,000
Median = $65,000
One year private tuition = $32,367 One year private tuition = $11,728
4
5. Query:
What competencies did Henderson
need to achieve his professional
objections?
• Communication / Presentation
• Listener’s perspective
• Persuasiveness
• Strategic thinking
11. 1. Create a Sense of Urgency
“Well over 50% of the companies I have
watched fail in this first phase.”
-- Kotter, Leading Change
12. 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
13. 16,241 Applicants Projected applicants for Fall
22.4% decline from 2012 2013 entering class: 54,137
14. Private Practice
Circa 1948
Lawyers by Role • 163,000 Lawyers
Associates
• 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)
17. US Lawyer Population
(1951-2000)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1951 1960 1971 1980 1991 2000
Year
Lawyer Population
18. US Lawyer Population
(1951-2000)
1,200,000 800
700
1,000,000
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
19. Total Law Firm Employment, 1998 to 2010
1,200,000
1,122,723
1,074,994
1,100,000
988,898
1,000,000
900,000
Total 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)
20. Incoming 1L Classes, ABA-Accredited Law Schools
1985 to 2011
60,000
15% increase in Law Schools (175 to 201)
19% increase in 1L enrollment
50,000
40,000
30,000
20,000
10,000
0
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)
21. % of Entry Level Jobs in Private Practice
1985 to 2011
70%
60%
50%
40%
30%
20%
10%
0%
% of Entry Level Jobs in Private Practice 2-Year Moving Average
Source: NALP Bulletin, July 2012, charts generated by William Henderson
28. 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 by
William Henderson
(June 2012)
Offices of lawyers All other legal services
29.
30. “Every dollar I get, there are three
that no longer go to Big Law”
-- LPO Chief Executive (non-lawyer)
31. Circa 2012
Legal Profession
Legal Services Industry
Legal Industry
Asia, Automation, Abundance
32. Susskind’s Paradigm
Bespoke Standardized Systematized Packaged Commoditized
Human capital needed:
• Information technology
• Systems engineering
• Finance
• Marketing
• Project Management
• Law
33. The solution
Practice
Arc Informed by
Mastery
theory and data
Arc under
Traditional
model
Graduation Time
35. MacCrate Report (1992)
10 Skills 4 Values
1. Problem Solving 1. Providing competent
2. Legal analysis and reasoning representation;
3. Legal research 2. Striving to promote
4. Factual investigation justice, fairness, and morality;
5. Communication
3. Striving to improve the
6. Counseling
profession;
7. Negotiation
8. Litigation and alternative dispute 4. Professional Self Development
resolution procedures
9. Organization and management
of legal work
10.Recognizing and resolving
ethical dilemmas.
35
36. 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
37. 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
38. 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
39.
40. 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
41. 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
42.
43. 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)
Editor's Notes
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