“Dentons has decided it will no longer report average profits per equity partner, and it hopes other law firms will do the same.”
 
ABA Journal, June 11, 2014

Kevin and I read with great interest the above report that Denton’s has decided to take a stand and will no longer report its average profits per equity partner (PPP), stating that the number is meaningless and has the potential to damage client relations.  Not surprisingly, American Lawyer editor-in-chief Kim Kleman stated that PPP is an important metric they will continue to track.

This story got us both to thinking about what are the metrics the legal profession should be tracking to gauge the health of the profession and of our overall legal system.  After diving into a discussion about PPP and its usefulness or lack thereof, our conversation turned (of all places) to global climate change.

Why global climate change? The reason is that scientists around the world have come up with a key set of measures (carbon dioxide parts per million (PPM) in the atmosphere, feet of glacial retreat or sea level rise, increase in average air temperatures, changing participation patterns, etc.) that enables them to monitor the health of a very complex, inter-dependent system such as the earth’s climate.  The reason for having these indicators according to NOAA is to be able “to monitor and assess the state of the Earth’s climate in near real-time, providing decision-makers at all levels of the public and private sectors with data and information on climate trends and variability including perspectives on how the climate of today compares to the past.”

These scientific measures have become widely known by the public and are regularly reported in the press.  They have served to help the public understand the multiple factors impacting our climate on a global scale and how each factor directly influences the others.  These metrics have also served as a rallying cry for action by individual citizens, local and national governments, and not-for-profit organizations such as 350.org.

Recognizing what agreed-to, widely published data points have done to bring facts and a sense of urgency and action to the climate change discussion, our conversation naturally turned to a discussion of the key data points the legal profession could be tracking and reporting on to measure the overall health of our legal  system.  If widely agreed upon, could these measurements inform and motivate decision makers and the broader public to push for changes and solutions that improve the health of our legal system as measured by  these metrics?

If gathering and reporting on agreed-to legal system data is a good for the profession and the public at large, what are the areas in which we should be collecting and reporting data? There is probably no end of possibilities in this regard, but here are some areas that crossed our minds that might be monitored by some form of agreed to metrics:

The “health” of our new lawyers – Having energized, talented new lawyers entering the profession in quantities sufficient to meet demand and to replace those lawyers retiring or leaving the profession is without a doubt key to the long term health of the profession. Declining law school enrollments, either in numbers or in quality of applicants, is clearly a negative indicator of new lawyer “health” in this regard.  Similarly, the average student debt a new lawyer has when they enter the profession is a critical factor as the higher this number goes, the fewer the number of individuals that will be attracted to the profession in the first place and the fewer the number of new lawyers who can “afford” to take jobs with lower salaries — as are often found at our access to justice providers or public interest legal groups.  While it may be hard to do, a third possible measure might be how well the average law graduate is prepared to actually serve a client on the day they graduate for law school.

The “health” of our access to justice providers – Given the current high cost of legal services, ATJ providers are often the only access most Americans have to any form of legal services, other than self-help.  Whether the number of volunteers working at legal clinics is up or down and whether their overall funding is increasing or decreasing over time might be one measure of the “health” of these critical organizations.

The “health” of our private practitioners – Just as the health of our ATJ providers is important, so too is the health of our private law firms and the lawyers practicing in them.  Clearly, there is some financial metric that will tell you how well they are doing and how financially rewarding the profession is.  Measuring the Profits Per Partner for the AmLaw 100, however, is akin to measuring the income levels of America’s top 1% of wage earners, given that the equity partners in those firms probably represent around 1% of the practicing bar.  While perhaps an interesting number from a curiosity point of view, it does nothing to inform us about how the other 99% of the practicing bar is doing.

In addition to some financial metric that tracks how the overall bar is doing economically, it strikes us that we might also want to monitor two other factors.  First, how many lawyers are leaving the profession to start new careers in other areas?  Loosing experienced lawyers mid-career to other professions is a sign of disatisfaction with the profession that does not bode well  for our long-term health.  Second, some form of job satisfaction or overall “happiness” index of the bar would also provide some insights into the health of our legal service providers. “Happiness” surveys have been done from time to time by various groups, maybe the time has come to do this on a regular, ongoing basis.

The “health” of our lawyers working for governmental entities  — Just like we need healthy ATJ providers, we also need healthy governmental legal departments.  Neither of us have ever practiced in this area so we really don’t know if there is a unique measure of these legal service providers. It may be simply whether the number of governmental attorney jobs are increasing or decreasing, and how long attorneys stay with a given job in governmental service.

The “health” of our law schools – Without healthy, affordable law schools our legal system fails in the long term if not sooner.  The question is, what are the right measures of law school health?  Clearly the growth or decline in admission applications and the quality of applicants are important measures, but so might be the growth in tuition. Also important, is the quality and quantity of law school professors as well as their retention once they enter the ranks of academia.  Finally, there might be some way to measure how well law school curriculums are tracking the real life skills needed by practicing lawyers.

The “health” of our courts and bench — Neither of us have experience in this area, but there are undoubtedly measures that could track the health of our courts and of the bench in general.

Public’s access to and affordability of legal services — Finally, since the purpose of the profession is to provide legal services to the public, some measurement of how we are doing our job from the public’s perspective is required.  There probably is no end of measures, many of which are probably already being published.  First, what percentage of individuals needing legal services don’t have access to them, either because of cost or because of capacity restraints at our pro-bono and ATJ providers?  Second, what percentage of citizens appearing in our courts are there pro-se, indicating a lack of access to affordable legal services.  Finally, is there some measure of what is happening in the “legal marketplace” with respect to the cost of various standard legal services, similar to the “basket of goods” that are behind the Consumer Price Index? Another possible measure might be to look at a basic legal document we would advise all citizens to have, such as a will, and to see if the number of individuals having such a document is growing over time.

There probably is no end of measures we could come up with, and a variety of ways to look at each one.  What are your thoughts?  Do we need a legal dashboard of sorts with gauges other than PPP?

 

 

 

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