Accountants and Lawyers – Whose Profession Is Worse Off?
The WSJ Law Blog sometimes plumbs the depths of idiocy for the sake of entertainment and sometimes does some thoughtful pondering. Yesterday, they posted on the Stanford Lawyer and their latest issue. In it was the introductory letter from Stanford’s always provocative dean Larry Kramer. In his words, I hear echoes of the poor state our own profession, the accountants. However, as I say in my comment:
You could say the same about the accounting profession, except the accountants who run the Big 4 are not lamenting its demise as a profession but encouraging and contributing to it.
(The comments to this post in the WSJLB are worth the price of the click…)
Here are Dean Kramer’s comments:
I have occasionally remarked, though only in small settings before today, that the state of the legal profession brings to mind Rome, circa A.D. 300. On the surface, it looks grander and more magnificent than ever, but the foundation may be about to collapse. It’s meant to be a joke. But the uneasy laugh this comment invariably elicits suggests that it may be closer to the mark than any of us wishes.
Certainly our profession has changed profoundly in the past generation. The basic structure still looks the same: Most lawyers practice in firms, most firms are partnerships with cadres of associates, most work is performed for hourly fees, and so on. Yet it’s the traditional model on steroids: Big firms employ thousands rather than hundreds of lawyers, with offices around the world.
Partner/associate ratios have changed dramatically, particularly if we focus on equity partners, while legal work has become increasingly specialized and expectations for billable hours have soared.
Such changes have consequences. Clients, especially corporate clients, are less willing simply to pay what firms charge and much less willing to subsidize the training of young associates. Technology has exacerbated this trend, enabling clients to do for themselves things they used to need from outside counsel. Making a practice profitable has increased demand for lawyers to bill hours, which has, in turn, forced firms to raise salaries, which has further increased the need to bill hours . . . .
Twenty years ago, most lawyers would have scoffed at the idea that profitability, much less profits-per-partner, should be the measure of success and prestige. Yet that is where we are. Law firms are run like businesses by managing partners and committees whose time is almost wholly occupied with, well, managing. And competition is fierce: to be bigger, pay more, bill more hours, and open more offices. To be more profitable.