The Strangled Cries of Lawyers in Love
Itzak Flom and Fannie Fishman came to the United States from a Jewish shtetl in Ukraine shortly after the end of World War I. He became a labor organizer in Manhattan's garment district, one of the many who fought the exploitation of that era's immigrant workers. Their son Joseph was born in 1923. Joe Flom became a lawyer, and the fifth partner of what became and still is Skadden Arps Slate Meagher & Flom. Over half a century, Flom grew that small firm into a behemoth.
It is with some irony, then, that this week brought the news that former Skadden partner Greg Craig was indicted for lying to prosecutors about his helping Paul Manafort represent the government of Ukraine. https://www.washingtonpost.com/politics/gregory-craig-former-obama-white-house-counsel-indicted-for-offering-false-statements-related-to-ukraine-work-in-latest-mueller-fallout/2019/04/11/f9aa260e-5c53-11e9-a00e-050dc7b82693_story.html?noredirect=on&utm_term=.c09370638c63. But also last week, news that Wilkie Farr's former co-chairman Gordon Caplan faces jail time for having paid $75,000 to alter his daughter's SAT scores so she could get into college. https://www.nytimes.com/2019/04/05/business/gordon-caplan-lawyer-college-admissions-scandal.html . And then there's Michael Avenatti, once trumpeted as President Trump's avenging angel, facing multiple indictments for everything from extortion to stealing from clients. https://www.nytimes.com/2019/04/11/us/avenatti-indictment.html
All of which prompts this question: What the hell is going on in my profession?
I met Joe Flom once. In the summer of 1978, I was a summer associate at Skadden, and one day the great man condescended to have lunch with us. I don't remember much of that audience, nothing really except this: Flom ventured his view that law firms could be as large as accounting firms.
Back then, eight accounting firms -- the Big Eight -- rendered most of the accounting and auditing services needed by publicly traded companies. Each had thousands of employees and hundreds of millions of dollars in annual revenues. To say that a law firm could be the size of an accounting firm seemed strange in 1978, when Skadden itself was considered a large firm with maybe a couple hundred lawyers.
Increasingly complex tax and federal securities laws needed more and more accountants to keep up. For decades, the Big Eight met the demand by gobbling up smaller practices. Eventually, they ate each other. They became Big Seven, then the Big Six, and now the Big Four. Today, Delloite, the largest, has over 56,000 employees and earns over $13 billion in yearly revenue; the smallest, KPMG, has over 24,000 and earns almost $6 billion.
Flom correctly predicted that law firms would go the same route. The American Lawyer ranks the AmLaw 100 -- those firms we generally call "Big Law" -- much like US News & World Report ranks colleges and law schools. Skadden today rakes in over $2.5 billion in fees, and employs over 1,700 lawyers, but it ranks only fifth in the Big Law league. At last count, 40 Big Law firms had achieved a billion dollars in annual revenue. They employ in the aggregate about 80,000 lawyers and their partners make millions. President Trump's pick to be ambassador to Mexico, Chris Landau, reportedly earned $11 million in 2017 from Kirkland & Ellis, which sits comfortably at the top of the charts.
But Big Law represents a tiny fraction of the 1.3 million licensed attorneys in the US. According to the Bureau of Labor Statistics, the average lawyer only earns about $130,000. The bottom 25% average only about $78,000, and the top 10% about $190,000. That's a tight spread, and a world apart from the celestial realms of Big Law. And don't be so envious of Big Law associates who make $190,000 right out of law school. https://abovethelaw.com/2018/06/let-the-salary-wars-commence-another-biglaw-firm-has-matched-the-190k-scale/. Each is expected to generate close to a million dollars in revenues in return, and they are in for a rude awakening when they try to match those income levels if -- when -- they leave Big Law. All that probably makes them, on a dollar basis, the most exploited laborers on the planet.
I'm not so impressed by Joe Flom anymore, and not because he's dead (RIP 2011) or because I'm older now than he was then. I just think he was wrong to believe the rise of Big Law would be a good thing. A profession where a few hundred Big Firm partners earn millions while a million fellow lawyers, many just as capable, barely earn a couple hundred thousand bespeaks a dangerous degree of structural inequality.
The general unhappiness of lawyers is not news. Today's malaise doesn't quite have the drama of Dickens' Sydney Carton, who thought it better to lose his head in France than to return to Old Bailey, or Melville's Bartleby, who stopped working simply because he preferred not to (always a good reason). But depression, substance abuse, suicide, and, yes, criminality seems today so rampant among lawyers that some fundamental problem must exist. See https://journals.lww.com/journaladdictionmedicine/Fulltext/
For one thing, there's a certain rottenness at the core of all this. Earlier this year, we read of Christopher Anderson, a partner in two Big Law firms who, in a rare pique of conscience, self-reported that he routinely added several tenths of an hour of time to his charges to large clients in order not to fall short on his expected billable hours. http://www.abajournal.com/news/article/former-biglaw-lawyer-inflated-hours-because-of-perceived-billing-expectations-ethics-complaint-says. Anderson's confession was an embarrassment to his firms, because they were forced to admit they couldn't tell he was padding his hours. What, after all, is a few tenths of an hour in the scale of the massive bills they were sending? And was that so different from Caplan's admission, caught on tape, that "To be honest, I'm not worried about the moral issue here"? https://www.bloomberg.com/news/articles/2019-04-05/ex-willkie-farr-lawyer-caplan-will-plead-guilty-in-college-case. Or Michael Cohen lying for Donald Trump? Or Avenatti's alleged thefts, or Greg Craig allegedly lying about his lobbying activities?
I lay much of the blame on law schools. Law schools select the wrong personality types. They simply choose those applicants with the highest grades and LSAT scores. LSAT scores correlate very strongly with SATs, and both correlate very strongly with plain old IQ. High college grades throw neurotic ambition into the mix. The result is law schools filled with the brainy over-ambitious, those farthest removed from real people.
It's a bad combination because most lawyering doesn't require that high a degree of either native or book smarts. The law is meant to apply to normal people. It loses much of its effectiveness when people don't intuitively grasp it and accept its purpose. To be a very good lawyer requires, more than extreme intellect, a fair dose of humility. You can never know it all -- you can't even pretend you do -- and so you must always be ready to admit you've been wrong. Law schools don't look for humility in their applicants; more often than not they select for the opposite. When overly brainy and ambitious -- and arrogant -- lawyers enter the profession, their psyches become a devil's fun park. Some build Big Law firms; some steal; some kill themselves, either slowly or quickly. It's a sad story all around.
I used to be a Big Law partner. I know that very few Big Law firms need to be as big as they are to serve their clients. They grow primarily to agglomerate profits into the coffers of their leaders. Those profits would otherwise be shared by small- to medium-sized law practices, and by their clients who would get the same services at a lower cost. Those of us who practice Big Law quality in smaller footprints provide an alternative that all, lawyers and clients alike, should welcome. I, for one, don't miss being in Big Law. Believe me, it's not all it cracks itself up to be.
In 1983, Jackson Browne bookended Joe Flom's prediction with his own, a whimsical look at the quiet desperation building in what is, at its best, a noble, exciting, and essential profession. Lawyers in love, Browne noted, though never sure why or with whom. If Flom predicted the growth of Big Law, Browne foresaw with an eerie accuracy the psychic miasma that came with it.
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