The Business of Law – Marketing and Business for Enterprising Attorneys

No, it’s not a fairy tale.  The story of the lawyer and the entrepreneur is the vision of some forward-thinking administrators at Duke Law School and the University of Colorado School of Law. Both are in the process of launching LLM programs in “entrepreneurial law” as reported in the National Law Journal  (NLJ) and the WSJ’s Law Blog.

The idea is pretty straightforward. An LLM-level program in entrepreneurial law (with courses and clinics focused on entrepreneurship and emerging companies) will ideally give lawyers greater skills to advise start-up businesses—or to become entrepreneurs themselves.

In the NLJ piece, professors at both Duke and Colorado talk about how lawyers are increasingly called upon to advise start ups, and how a knowledge of business in general and entrepreneurship in particular will be helpful to lawyers in giving that advice.  I agree.  But to me, it’s the second part of the equation that is much more interesting—helping lawyers become entrepreneurs themselves.

Now, as regular readers know, I have argued over and over and over again that the legal profession needs to be more entrepreneurial. The fundamental model is in need of a huge overhaul to become much more innovative and customer-centric.  To do that, lawyers need to think more like business people.  Maybe having some courses in entrepreneurship will help. 

The Duke and Colorado programs promise to teach students about employment, organizational behavior and financial strategy.  These are, of course, critically important parts of business, and long overdue topics for law schools to begin covering.  That said, what about the other aspects of entrepreneurship? What about judgment, about knowing how to calculate risk, and when to take it, focusing on customers, and aligning incentives to maximize output and performance?  These are also critical, and they are not typically associated with law school curricula.

Instead, where entrepreneurs look to balance risk and reward, lawyers tend to minimize risk above all else.  Where entrepreneurs seek out innovation and efficiency, lawyers look to perfect the standard operating procedure, all the while billing by the hour.  Where entrepreneurs by their nature look for shortcuts, lawyers always seem to take the long route.  Where good entrepreneurs are maniacally focused on the customer, lawyers tend to be self-absorbed.

The bottom line is that the entrepreneurship programs at Duke and Colorado are a step in the right direction, and they will undoubtedly help lawyers as they advise their increasingly entrepreneurial clientele. But I’m hoping they will also teach lawyers how to be businesspeople in their own right. If they succeed in accomplishing that goal, the lawyer entrepreneur won’t have to be an oxymoron.

As close readers might recall, I have long called for an end to the billable hour model of legal service, arguing instead that contingency fees were a better solution for lawyers, clients and justice.

Well, as Claire Ruckin over at Legal Week reports, it appears that no less an authority than Lord Justice Jackson agrees with me.

Lord Justice Jackson, a widely respected appeals justice in the U.K., was asked to conduct an independent review of the rules governing the costs of civil litigation in the U.K. and to provide recommendations that would lead to greater access to the civil justice system.

Among Lord Justice Jackson’s conclusions are that lawyers in the U.K. be allowed to charge for their services through the use of contingency fees.

This is an important step for the U.K. because contingency fees had previously been prohibited on the grounds that lawyers with a significant final stake in the outcome might lose their ability to give impartial advice.

As a good English lord might say, that’s poppycock.

Contingent fees align the interests of counsel and clients, and they allow lawyers to take on costly and complex cases with little risk to the client. Finally, these fee arrangements promote efficiency because they encourage lawyers to be honest with their clients about the likelihood of success on the merits.

Most importantly, contingent fees are client-centric; something the legal profession could use a whole lot more focus on.

Whereas the billable hour essentially reimburses lawyers for their time, the contingent fee compensates the attorney for the client’s outcome. Lord Justice Jackson is 100 percent right, no matter how radical his proposal might seem to our bewigged brethren.