Ethics in the Legal Industry

• Publication year: 2022

51 Creighton L. Rev. 673. ETHICS IN THE LEGAL INDUSTRY

ETHICS IN THE LEGAL INDUSTRY

MICHAEL ARIENS(fn*)

I. INTRODUCTION

A BRIEF ITEM IN THE HEARSAY SECTION OF THE JUNE 2017 ABA JOURNAL WAS HEADLINED "2%." THIS NUMBER INDICATED AN INCREASE IN THE PER-CENTAGE OF LAWYERS, FROM 2012 TO 2016, "WHO WORKED REMOTELY WITHIN THE LEGAL INDUSTRY."(fn1) MAKING ONE'S "OFFICE" A LOCATION OTHER THAN THE PHYSICAL SPACE LEASED OR OWNED BY ONESELF OR BY AN EMPLOYER IS HARDLY NEWS, EVEN AS APPLIED TO THE WORK OF LAWYERS. LAWYERS KNOW AS WELL AS ANYONE THAT TECHNOLOGY ALLOWS ONE TO WORK ALMOST ANYWHERE AND, UNFORTUNATELY, ALMOST ANY TIME. WHAT IS STRIKING IN THIS BRIEF NEWS ITEM IS THE USE BY THE FLAGSHIP MAGAZINE OF THE AMERICAN BAR ASSOCIA-TION ("ABA") of the phrase "legal industry."

Characterizing the work of lawyers as part of an industry is rela-tively new, particularly in legal publications. No definition of "legal industry" is found in the tenth edition of Black's Law Dictionary, pub-lished in 2014, nor is one found in the latest (2012) edition of the Bou-vier Law Dictionary.(fn2) Only one published case, issued in 2012, has used "legal industry" as a synonym for legal practice or legal profes-sion. That decision was written by the New York Supreme Court, a state trial court, on the issue of a claim of fraud in the published em-ployment data of the defendant law school's graduates.(fn3) Outside of a 1976 law review article,(fn4) references in law reviews to the work of law-yers as part of an "industry" rather than a profession, a service, or a practice are rare before the turn of the millennium.

The phrase "legal industry" was used in bar journals and law management and practice publications during the 1990s in two re-lated ways: first, it was used as a catchphrase to discuss a particular subset of consumers of computer equipment and related products and services.(fn5) Its second use was by those engaged in law firm manage-ment and staffing, as shorthand when discussing the business of oper-ating a private law practice.(fn6)

Referring to the work of lawyers, especially private practice law-yers, as part of a "legal industry," became more prevalent upon the turn of the millennium. The magic of the year 2000 offered lawyers (and others) the opportunity to speculate about the future, usually in light of the recent past. One example is Into the New Millennium, a symposium sponsored by the State Bar of Texas and published in the Texas Bar Journal.(fn7) One of the contributions offered a sober assess-ment of the future: "The practice of law is not an island-it is very much a part of a changing business world. Change has become the norm in business, and the legal industry is not immune to it."(fn8)

The constant of change was not new among American lawyers in 2000.(fn9) Significant changes in the economics of the practice of law had been the norm for many lawyers since the 1970s.(fn10) During the 1970s, the profession as a whole faced both governmental and market-based threats to the claims of exclusivity in the practice of law.(fn11) Lawyers increasingly sold their services to corporations at the expense of individual clients.(fn12) During the 1980s, large law firms began replacing lockstep partner compensation based on length of firm service with "eat what you kill" compensation systems, in part to stem the departure of rainmakers.(fn13) Lawyers of all types were increasingly sorted into specialized practice compartments.(fn14) Further, a continued increase in the size of the American legal profession relative to popula-tion increased competition among lawyers. As always, some practice areas grew and others shriveled. One satisfying constant was the continued growth of legal services as a share of Gross Domestic Product, rising from .4% in 1978 to 1.8% in 2003.(fn15)

This overall economic success failed to cheer up many lawyers, as the race for ever-increasing profits per partner became the focus of many law firms.(fn16) By the end of the twentieth century it was commonplace to declare that lawyers were part of an unhealthy and unethical profession,(fn17) and to complain, as Chief Justice Warren Burger did, that the "standing of the legal profession is perhaps at its lowest ebb in this century-and perhaps at its lowest in history."(fn18)

The Texas Bar Journal authors accurately predicted that the norm of change would substantially affect the work performed by law-yers. The same norm that reconfigured the economics of law practice also triggered a transformation of the language used by lawyers to describe their purpose and practice in the early twenty-first century. In the aftermath of the Great Recession of 2007-2009,(fn19) the increased use of the phrase "legal industry" by the New York Times (the "Times") further demonstrates this transformation of language. The Times' weekly column At the Bar discussed the "legal industry" in a profile of the owner of a legal recruiting firm in 1990.(fn20) The Times began using the phrase more often after the turn of the millennium, especially beginning in 2009.(fn21)

The use of this language by the Times reflected a greater attach-ment to adopting the appellation in publications written for and by lawyers. Monthly general interest bar association journals rarely defined the work of lawyers as an act of a legal industry before the Great Recession.(fn22) Law reviews embraced the term less often than bar journals. However, like bar journal authors, those writing for law reviews discussed the "legal industry" more often after the Great Recession than before.(fn23) Further, the phrase has been used recurrently in recent online internet publications, often in reference to claims about future technological innovations and changes which are predicted to disrupt the traditional work of lawyers.(fn24) Relatedly, one large law firm consultant and former lawyer offered a measured and lengthy assessment of the legal industry online in the aftermath of the Great Recession. When his ideas were later published in 2013 in book form, the Foreword, which was written by a large law firm Chairman and Chief Executive, used "legal industry" 5 times in just 1,000 words.(fn25) Finally, Google's Ngram Viewer shows the increasing use of "legal in-dustry" over the past quarter-century; unfortunately though, the Ngram Viewer's data ends in 2008.(fn26)

The thesis of this essay is that this new nomenclature reflects a lasting reframing of the ethical foundations of American lawyers. Al-though applied most often to the work and sales opportunities sought by large law firms, the industry model is not limited in application to such firms. It is rare for any private practice lawyer to forego market-ing her skills to prospective clients (or to lawyers with clients who need her particular legal skills). Changes in technology affect all pri-vate practice lawyers.

This essay begins by discussing the legal profession's traditional declaration of the lawyer's purpose. Lawyers served two masters, their clients and the courts, and they were required to serve each faithfully. This section explains the tension lawyers faced in attempt-ing to achieve an impossible task. The essay then turns to the ten years from 1973 to 1983, when the American legal profession under-went dramatic changes. This section evaluates the economic and ideo-logical shifts that affected the status and income of lawyers. Section IV then looks at the post-1983 history of American lawyers. It specifi-cally focuses on the long-running "debate" between those who em-braced the business of private law practice and those who sought to emphasize the public profession of the law, particularly through the professionalism movement. The interest and attention paid by the ABA and other bar organizations in inculcating professionalism was a consequence of those shocks to lawyers during the 1970s and early 1980s. These challenges sharpened the disagreement among lawyers and lawyer organizations of the fundamental duties of the working lawyer.(fn27)

Those fundamental disagreements occasionally arose in the late 1990s and early 2000s. However, during much of these bookend de-cades an economic boom made it easier for many lawyers to paper over their differences.(fn28) Like a receding tide, the 2007-2009 Great Reces-sion bared those differences. Large law firms fired, laid off, or re-scinded offers to over 5,000 lawyers and more non-lawyer employees, in an effort to maintain profit margins as client work, and thus bill-ings, declined.(fn29) Nearly a dozen large law firms went bankrupt when revenue fell and the large amount of debt taken on to pay their part-ners went unpaid.(fn30) The New York law firm of Dewey & Leboeuf managed the dubious distinction of both becoming the largest law firm to file for bankruptcy and having several of its executives indicted on charges of fraud.(fn31) The Great Recession increased the pace at which law firms, particularly large firms, sorted themselves.(fn32) It also gener-ated substantial efforts to further use technology to provide legal ser-vices faster and cheaper.(fn33) Most importantly, the Great Recession made visible that the omnipresent purpose of many large law firms was the same as other industries: maximizing profits.

The Great Recession did not cause some private practice lawyers to think of themselves and their work as part of an industry. Instead, it provided an impetus for them to make more public...