Friday, October 25, 2013

          Viewpoint: The Importance of Teaching Law Practice Management

          In this market, law schools must provide students with a larger tool kit than previous generations of law students were thought to need upon graduating, and that tool kit includes a basic understanding of law practice management.

          Morris Ratner

          Morris Ratner

          Law students need to learn the business of law. In 1992, the ABA's MacCrate Report identified the "organization and management of legal work" as one of the fundamental lawyering skills law schools should teach.

          This article is reprinted from the October 25, 2013 edition of The Recorder.

          by Morris Ratner

          Recent and disruptive changes in the legal market—including intensified competition among legal services providers, a shift in power to sophisticated clients, technological advances, and the emergence of new techniques for managing and delivering legal services—have made it all the more imperative that law schools prepare new graduates to be competent and adaptable entrepreneurs.

          I taught law practice management at UC Hastings in the Spring 2013, and will offer the course again next academic year. My goal in writing this column is to describe the course and thereby to continue a conversation with attorneys in a wide array of practice settings—a conversation that has defined the structure and content of the course, which is a work in progress.

          Despite the ABA's 1992 call to action, law practice management is still a relatively immature field of study: there is no authoritative textbook or casebook, and no consensus regarding what to teach or how to organize it. I taught practice management as a broad survey course, given that many students cannot predict which issues will be most relevant to them, and with the understanding that students who wanted to delve more deeply into any covered subject could do so in advanced management courses.

          To ground my introductory course, I start with a collection of conceptual frameworks developed over the past several decades in the fields of organizational and management theory, from agency cost to cultural and systems theories of the firm. The initial project in the course is to apply these organizational and management theories to the peculiar setting of the traditional law firm, to explain its current features and to help guide future management choices. Theory links what might otherwise be just a jumble of management topics into a coherent vision of the law firm.

          The rest of the course is divided by type of law firm organizational structure, from least to most complex, starting with solo practitioners, and moving to small multi-lawyer firms, large firms, and non-traditional organizational structures such as LegalZoom, which provide standardized and low-cost services via the internet to traditionally underserved segments of the legal market.

          For each type of law firm structure, we consider particularly relevant management issues and decision points. For example, for solo/start-up firms, we consider law firm accounting and economics; selection of practice areas; marketing; and the use of law practice technology. In connection with this phase of the course, the students are asked to prepare written detailed business plans, an exercise which gives them the opportunity to directly apply what they are learning, and at the same time, to imagine themselves in an entrepreneurial role.

          Similarly, for multi-lawyer firms, we confront management issues through the prism of the primary firm organizing document, the partnership agreement, excerpts of which students also draft. Here we focus on, among other subjects, firm governance; reward systems, including equity and income allocation, as well as promotion to partnership; and growth, including special problems associated with managing multi-jurisdictional practices. Other issues we canvass, which are less directly tied to the partnership agreement, include risk management and project management.

          Interspersed through the course, we examine case studies. For example, we review the actual financial records of a recently-founded new law firm; explore creative management choices made by firms that appear to be adapting well to changing market conditions; and also, study failed firms, conducting what amounts to forensic analyses to ascertain what management choices may have contributed to their decline.

          During the first iteration of the course, a number of practicing attorneys volunteered their time as guest lecturers on specific topics as to which they had expertise. Leading members of the bar across a wide spectrum of legal practice shared their experience, bringing the subjects we canvassed to life in ways no textbook could.

          Teaching law practice management to persons who have never practiced law presents special hurdles. Graduate programs in business typically require applicants to have relevant work experience for that very reason. But it is not necessarily more challenging to convey the fundamentals of law firm management than it is to, say, teach introductory civil procedure to a student who has never litigated. In this market, law schools must provide students with a larger tool kit than previous generations of law students were thought to need upon graduating, and that tool kit includes a basic understanding of law practice management.

          Morris Ratner is Associate Professor of Law at UC Hastings College of the Law, and formerly was a partner at Lieff, Cabraser, Heiman & Bernstein, LLP. Professor Ratner invites attorneys interested in further developing business of law curricular programming to reach out to him directly at ratnerm@uchastings.edu.

          The Recorder welcomes submissions to Viewpoint. Contact Vitaly Gashpar at vgashpar@alm.com.

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