NY Judge Laments "Economic Focus" of Law Practice

The Wall Street Journal Law Blog quotes New York federal judge Harold Baer in a post on November 30th, who in an opinion over a violation of a protective order, stepped out and decided to take the opportunity to voice his opinion on the state of the legal profession. Judge Baer particularly took issue with lawyers' "economic focus of the market place . . . infiltrat[ing] the practice of law, subordinating the high standards of service, collegiality and professionalism as a result."

He goes on:

"[P]artners are at times made and retained for their rainmaking skills and not for their legal skill, that the number of billable hours is not only the alpha and omega of bonuses but that these hours — or at least the ones that count — often exclude pro bono hours, or that who gets credit for originating a piece of business can throw a firm into turmoil and prompt internecine struggles, or that the bottom line has eclipsed most everything else for which the practice of law stands or stood to the extent that the practice of law is now frequently described as a business rather than a profession."

The judge certainly wouldn't like the news from San Francisco, where the firms Howard, Rice, Nemerovski, Canady, Falk & Rabkin and Heller Erhman are trimming their support staffs due to economic concerns.

You can surmise that the point the judge is making relates to making the business more of a priority than the practice (ie, using your practice to shield a patent troll business). However, I can't help but wonder if the judge is lamenting the loss of the bartering system and the handshake agreement as legal tools for payment and contract as well. He suggests that a "focus on the marketplace" is incompatible with a professional practice. I believe the criticism is unwarranted.

I agree with the judge to the extent that the lack of focus on client needs over firm policies hurts the profession (ie, threatening to discontinue direct deposit if billable hours not recorded within time frame). Perhaps there are some firms who do not allow or encourage pro bono work, but the vast majority of firms actively provide free legal services and encourage it for their associates. However, a firm cannot base its financial model on providing free services. The judge assumes both are incompatible, as if running a firm like a business necessarily means that attorneys cede their status as professionals. Judge Baer all but states this in his quote, "[a] profession is not a business".

Does the judge think that law is the only profession? Does he assume doctors are not professionals because they choose not to work with an insurance company and thus limit the choice of patients, based on a (gasp) business decision that the insurance company is not favorable to the business needs of the doctor's practice?

Further, assuming that the "high standards of service, collegiality and professionalism" are subordinated solely based on things such as providing credit for bringing in new business, requiring that attorneys place a value on their work performed, and looking at revenue numbers makes the judge look antiquated and naïve.

By his quote that "[a] profession is not a business" judge Baer places a line in the sand in a way not so different than an owner of a steam locomotive might relative to the impracticalities of building a freeway system to support vehicles powered by internal combustion engines. If "economic focus" is truly his lament, there's a better way to make his point. Mark Herrmann, in his book The Curmudgeon's Guide to Practicing Law (ABA Publishing, 2006), addresses the associate who asks "They want me to bill a lot of hours, so why not?" To the curmudgeon, billing time is compared to an unwilling child taking piano lessons: if you are focusing on the time rather than the objective, then you may as well not participate in the activity at all.

If you do good work, you'll always have plenty to do; "billing hours" will be irrelevant. If you ever feel the need to bill long hours, then please find another law firm to employ you. Your only obligation at this firm is to pursue the client's cause; "billing hours" is not on the agenda. (Herrmann 14-15)

Attorneys who focus on the needs of the client realize that recording your time is a chore (a necessary chore) secondary to the act of practicing law. From a management standpoint, it is imperative that the habit of recording your time is automatic; from a practicing standpoint, it is the way to "approximate, however crudely, the value given to each client" and "know who is busy and who is available to work on new projects." (Herrmann 15)

For anyone who hasn't already read this book, I highly recommend it. Although I suspect that most attorneys who have have been in private practice for more than 10 years will already be familiar with its tenets. The judge doesn't qualify (although he does have a stellar career as a public servant) and that may explain the generalization.

It is the responsibility of the equity partners (ie, owners) to ensure that the firm survives and its non-equity attorneys and support staff are paid. That means making decisions to retain talent, reward marketing efforts, and pay attention to the firm's finances. Now, if the judge is advocating that law firms not be held to the same standards as other businesses (ie, no payroll taxes, benefit requirements, compliance with other federal and state employment laws, etc) then perhaps his criticism may have some merit.

Maybe we will see the judge make another manifesto in opinio, this time railing against the application of business requirements to law firms. Otherwise, the judge will appear as a curmudgeon of a different type than Herrmann chronicled: one who is ignorant of the realities of running a business, regardless of profession.

Morepartnerincome.com is sponsored by Juris®. For information about Juris products and services for increasing law firm performance and partner income contact Juris National Sales Center
877/377-3740, e-mail info@juris.com or go to www.Juris.com.

Related posts

• No related posts.