A General Rant About Attorney Oversupply

One of the constant themes that comes out in this blog and some others is the universality of the problems facing the legal industry. The educational/training system in the United States is by no means unique - even if the effects may be different - especially in a world where the profession as a whole is threatened not only by outsourcing and paralegals, but also by computerized efficiency systems that make previously-lucrative positions expendable. And of course the training sector is the last to get the memo, even though it's written in all-caps on the wall.

But I digress. I couldn't help but think of universality when I read this article from the U.K. about growing concerns amidst the legal sector.

Here is a highlight reel of the concerns featured in the article:

• Rising tuition leaves trainees with "up to 70,000 [pounds]" in debt (about $112,000 in yankee dollars).
• For recent graduates, there are 11,500 people chasing 6000 jobs.
• The legal profession is concerned that high tuition will price out minorities and reduce diversity.
• Reduced standards to increase enrollment leading to incompetent lawyers who have gone through the training programs.

Completely foreign, right?

But what struck me are two quotes in the article that refer to disgruntled graduates becoming an "army of enemies" to the legal profession, or being a detriment to the profession itself.

What struck me is how little this argument is invoked in the States, or how those who most strongly defend the status quo ignore it. A common response to people who complain about the law school system sort-of mixes together caveat emptor (you should have KNOWN that going to Roger Williams wouldn't have got you anywhere) and individualized criticism (oh, you weren't law review/magna cum laude/drowning in internships? That's just YOUR problem; the system's fine).

Maybe that's the dark side of American "I'm exceptional" individualism rearing its head (I'll spare you the banal comparisons to Europeans), but to me, it misses the big picture and shows a startling lack of awareness, of an ability to see the entire forest, that - and maybe it's just me - I would certainly want in my attorney for any kind of long-term engagement.

A rash of articles have been published in the last 2-3 years noting that clients at BigLaw have been demanding cost-effectiveness, i.e., cost-cutting. The writers generally think this is a new development, but I think that misses what's really happened over the last few decades.

Imagine you're a businessman with a given product. Year after year, your clients keep buying your product. You keep raising prices and giving massive bonuses at the end of the year, and the clients keep buying. And then one year they balk and tell you to start lowering the price.

Why would that happen? From the clients' perspective, as the price was escalating every year, they continued to believe that the product was in-demand and in short supply, justifying the price increase. When they don't fall for the game anymore, they've either realized that their demand for that specific product is not what they thought it was or that the supply is much greater than they thought.

Can you connect the dots yet, elitists? You see, when someone goes to a plastic surgeon, the plastic surgeon can charge a ridiculous amount of money because there are few of them (or, more appropriately, there is a perception that there are few of them) and there is high-demand, both in fact (lots of people want plastic surgery compared to what's available) and in appearance (many plastic surgeons present themselves as having elite clientele).

What do you think happens when the average member of the public sees attorneys flooding the yellow pages, desperate for personal injury clients? What happens when it sees cheap asbestos/mesothelioma/drug class action advertisements? Or if it meets an attorney driving a cheap used car and wearing a lousy-fitting suit?

And what happens when the public sees bar members working part-time at Barnes and Noble or Starbucks?

Here's what happens: the myth of short supply - that this particular field is anything "special" - disappears completely. Additionally, the illusion of popular demand vanishes. The only thing that's left is actual demand, and that's more or less a constant in the legal field.

And big businessmen are not only members of the public who laugh at lawyers' expense, they're also some of the global leaders at cost-cutting in order to boost a company's balance sheet without actually improving its product or its sales revenues. If you want to see an example, look at positive earnings reports over the last two years and note how many mention cost cutting, shedding employees, etc. (look at samples here: HP, General Mills, Alcoa, Walgreens, Wal-Mart, McClatchy).

See, you only get to charge high- and escalating prices - and they'll only put you off-limits on the cost-cutting - if you're worth it, if you're really unique. While many of these companies pay more for the prestige of having the "best and the brightest" attorneys, it's hard to justify the cost differential after a while. After all, if a Hofstra J.D. is selling you clothes at Bloomingdales, why would you pay $300 an hour for some NYU schmuck the same age to do glorified paralegal work?

Does the NYU grad bring more prestige? Of course, just like driving a Honda Civic has more prestige than a used Chevy Cavalier. But if the Chevy Cavalier works well and is priced at $5,000, the Honda Civic can't go for as high of a price. If the Honda seller tries to charge $70,000, the buyer will ask him to come back to Earth or start buying Cavaliers.

Big businessmen did not get where they are at by making dumb financial decisions. Prestige has a value, for sure, but it's not infinite. Some brands produce an extremely high prestige value (what a person is willing to pay just to have brand x), even if sometimes irrational, like Yale, Cravath, Louis Vuitton, Rolex, Tiffany, or BMW. But at some point, the prudent always cash out if the price gets too high. And unlike Rolex or Louis Vuitton, where trained eyes can tell a difference in quality between their products and knock-offs, the difference in legal work is extremely hard to gauge, even if one could honestly tell the difference between a Yale grad's brief and one filed by a competent middle-tier graduate of St. Johns.

Now, if that middle-tier St. John's graduate has a full slate and makes a very good living, it's one thing. But if competent lawyers are floating around desperate for work, or working for 25k a year, it actually can cut down what most people (and most companies) are willing to spend on legal representation, even high-end. If all lawyers could bill $150/hr and have full work weeks, then the corporate bigwigs would probably think paying $500/hr for the top dogs would be a downright bargain. But if the floor fell out of the legal market, and alternatives were plentiful at significantly lower prices, the odds of that sucker paying you $500/hr drop.

Because so much of sales is based on illusions, BigLaw's "ceiling" is largely based on how high or low the floor for the entire legal sector is. Any profession's is. If plastic surgeons were on every street corner for $50 a nose job, the guys who went to Johns Hopkins in the rich suburban wonderlands are going to take a hit. Why would law be any different?

So, when you hear of an unemployed graduate from Touro or Temple or Suffolk, Mr. Columbia 3rd-in-his-class, Sullivan and Cromwell highly-paid associate lackey with a gorgeous invisible wife, an Audi he never drives and an irresistible urge to hit the scotch, your response should NOT be these:

What was his GPA?
Did he network?
Did he gain experience?
Why did he go to Touro/Temple/Suffolk/3rd-tier/4th-tier?

Your response should be:

God damn it, this guy's existence is costing me money.

Because this is not a situation caused by an individual lawyer's personal failures that is divorced from the high-achieving lucky ones who snag a spot on the podium. The massive oversupply of attorney labor is a collective problem that affects every single lawyer on an individual level. Because of the massive oversupply, the 3rd-tier grads cannot all find jobs and your own wages are suppressed.

Young big law associates should be as enraged at the system as the third-tier graduates. Why do you think the odds of any new lawyer making partner have fallen dramatically in the last 20 years? Why do you think many of you work the equivalent of two full-time jobs to keep up the illusion that you're worth the high salary the firm is paying you? Why do you think cost pressures on your firms have increased enough to make your bosses think like cost-cutting, slave-driving industrialists?

The old system, the one that made BigLaw a great gig, was premised on the notion that quality attorney work was expensive and prestigious. Because the ABA sat by and let law schools assault that image by overproducing the product to where Georgetown and Duke now have to pull out the magic trick book to get all their graduates paid work, that system will not truly come back.

And yet when people complain about the system, some of you inescapably go to the individual level, looking for personal faults like low GPA, to defend the system that supposedly rewarded you.

My grand point here amidst all this late-night rambling is that lawyer oversupply is a collective problem that affects everyone, not just the proverbial bottom-of-the-barrel, non-t14 folks. Discrediting people based on their personal characteristics is a classic tactic of elites to hide systemic injustices. Who you are or what you've done doesn't matter when you're being disadvantaged for being a member of a class. And that's clearly what's happened to almost all young lawyers, as far as I can tell.

The original article I pointed to spoke of unemployed attorneys in Britain becoming an "army of enemies" against the legal profession. It may happen here, too, and perhaps the "scamblogs" are indicative of that.

But it shouldn't be just the unemployed who despise the system. It should be everyone who got thrown in the meat grinder, even if they came out relatively unscathed. Many of the law professors and lawyers who write in to here and to other legal blogs have realized that these problems - especially oversupply - are collective, system-wide problems that affect everyone regardless of status. Curiously enough, those with some of the most prestigious educations are the most stalwart in insisting the system works well, which, if anything, should make one question the value of such degrees.

Because it's screwing them, too, just like it's screwing the British, the Canadians, the French, the Germans, the Algerians, the Ugandans, the Filipinos, the Rhodesians, the Hobbits of the Shire, wherever this type of system is put into place, an entire class gets screwed, not as individuals, but collectively. It doesn't matter whether you make $150,000 or are an unemployed beggar, you're getting screwed one way or the other, and a screwing is a screwing.

That, to me, is ultimately how lawyer oversupply truly could turn people into bitter anti-legal system advocates. The oversupply of attorneys really does harm everyone, especially others in the profession. The only thing stopping certain young American attorneys from realizing this seems to be their myopic egocentrism. Otherwise, there'd be a lot more pissed off people running around the states, like the British article suggested.