In “Silver Blaze“, Sir Arthur Conan Doyle’s 1892 short story, Sherlock Holmes solves a murder mystery by drawing a key inference from the dog that didn’t bark.
“The billable hour makes no sense, not even for lawyers,” Chesler wrote. “If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.”
Chesler said Wednesday he is mindful of globalization and the changes it had wrought on the legal profession. But he also said Cravath’s model of practice had held up extremely well. ‘The phrase “if it ain’t broke, don’t fix it,” comes to mind,” he said.
So an implicit acknowledgment today that something may indeed be broke is no small shift.
The most discerning comment in response to Chesler’s call came from litigator and uber blogger Patrick Lamb:
“When legendary CBS Evening News anchor Walter Cronkite announced his opposition to the Vietnam War in February 1968, President Lyndon Johnson is reported to have said, “That’s it. If I’ve lost Cronkite, I’ve lost middle America.” It was a turning point in the war … . I’m not saying that the Chesler article will have the same impact as Cronkite’s editorial. I hope it does.
As Lamb’s historically apt reference suggests, “land war in Asia” is not a casual metaphor. The seminal litigation in modern law was Cravath’s defense in the IBM antitrust cases. IBM’s general counsel was Nick Katzenbach, who held a number of key jobs in the Kennedy and Johnson Administrations, including, ultimately, Secretary of Defense (Nick went on to repudiate the Vietnam buildup after succeeding Robert McNamara). Robert Bork called the case “The Antitrust Division’s Vietnam.”
Cravath’s war of attrition defense was the fountainhead for the modern law firm, triggering the leap in both associate leverage and pay, the shift in emphasis in litigation from trial to pre-trial, and the explosion of discovery as a huge source of firm profits.
Many folks who have long pointed out the flaws in the billable hour — it’s too expensive, misaligns incentives, disconnects associates from real professionalism — have noted Chesler’s Road to Damascus conversion. Lamb’s follow-on post recounts an online conversation led by Fred Bartlit, one of the top trial lawyers and legal entrepreneurs in the country, who perhaps not coincidentally fought in Vietnam and was named, along with Chesler, as of the top eight trial lawyers in the country by Legal500. Bartlit describes his success with a model diametrically opposite from the IBM defense:
Eighteen years ago it finally dawned on me that, for example, three highly experienced partners will always do a much higher quality job than 20 associates, four junior partners, a chief trial lawyer, etc. Why? Because it makes no sense to have people preparing a case for trial who have never seen a trial. Such novices will always waste huge $$$ doing “projects” that will never see the light of day at trial or change anything. Likewise, a three-person team of great trial experience means that knowledge is concentrated, not fragmented. It does no good if someone in the back of the courtroom knows the answer; the person on her feet must know it.
So, my ideal law firm is 55 partners, maybe two to three associate novices in training/mentoring. And, many of our biggest cases (we do almost nothing under $100 million at risk) are handled by three lawyers, all of whom have first chair jury experience, and NO associates.
What do other law firm leaders have to say about this? They generate nearly $80 billion in revenues mostly from billable hours, yet no one has come forward to defend the billable hour and short-term profit maximizing as serving the interests of the profession, clients or society. What might Holmes infer from a profession that operates by logical, public argument, yet has no one of stature who will defend its core practice?
Let me suggest that we are seeing in real time how change actually occurs.
Lawyers like to think of change occurring by consensus. Smart people agree on something and then it happens. In practice, change is hard, and consensus decision-making is overwhelmingly inclined to preserve the status quo, because those with power in the status quo will defend it. This phenomenon is described in Clayton Christensen’s book “Innovator’s Dilemma,” explaining how most organizations can’t adapt to disruptive changes because the organizational dynamics are geared to the status quo.
The alternate model of change might be called the social model. Google, Wikipedia and Facebook have had a profound impact, but not merely because of technology — there is more technology in a Chevy Impala than in eBay, Wikipedia and Facebook combined. These are social systems, and there was never any kind of consensus around their use — just an escalating set of users shaping them to their purpose. This model is covered in Malcolm Gladwell’s “The Tipping Point,” which describes how new phenomena achieve critical mass. The Social Model has two advantages when applied to law — first, distributed, social decision-making reflects lawyers’ behaviors and institutions; second, Web 2.0 is actually the right productivity platform for law.
One of the great gold mines of the last 100 years was the Yellow Pages; first owned by AT&T, the largest and richest company in the world, and then by different private equity funds; yet Yellow Pages have collapsed in the last decade. Why? Was there a consensus to move to Google? No. Users moved online, and advertisers realized they needed to follow the users. Once Yellow Pages created unique value. Then there was inertia. Then there was change. End of story.
So don’t expect to attend any meetings where the ‘new model’ is declared and endorsed via consensus; but if you don’t hear anyone arguing the merits of billable hours and associate leverage, you can be pretty sure a tipping point is afoot.
Paul Lippe is a founder and chief executive officer of Legal OnRamp.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.