Law Firms Subsidizing the Public Interest
This week's news carried two items on what Above the Law's David Lat terms "irrational law firm egotism" -- and how that egotism is being harnessed for the public good. The first item is David Lat's Op-Ed piece in yesterday's New York Times, titled
The Supreme Court’s Bonus Babies, which comments on the stratospheric bonuses of $250,000 that law firms are expected to pay to this year's crop of departing Supreme Court clerks (my colleague Bob Ambrogi posted on the topic of Supreme Court bonuses previously here, and WSJ Law Blog readers discuss Lat's article here). Lat questions why firms pay out these huge bonuses; as he points out, Supreme Court litigation is a narrow niche, it's not all that profitable and ethics rules bar Supreme Court clerks from appearing before the court for two years, by which time they may have left the law firm for other employment (most commonly, academia). So if the bonuses aren't a wise economic investment, why do firms pay? Here's Lat's fascinating response:
The financial freedom supplied by these bonuses can allow the clerks who decide against a corporate career to move on more quickly to what truly interests them — academia, government practice or public-interest law. Law firms end up in effect subsidizing less wealthy precincts of the profession. In recent years, the practice of law at the nation’s largest firms has become much more of a business and much less of a profession. Firms have been squeezing more billable hours out of their associates, abandoning less lucrative practice areas and showing the door to partners who don’t bring in enough business — measures that would have been unheard of in the profession’s more genteel days.
So this bizarre competition among prestige-hungry law firms to collect the most young legal rock stars actually represents a healthy check, however modest, on this profit-maximizing behavior. By harnessing irrational law firm egotism to serve the rest of the profession, enormous clerkship bonuses achieve an impressive, increasingly difficult feat: getting top law firms to contribute to something other than their own bottom line.
Though Lat's concept of the "benevolent power of irrational egotism" seems a bit far-fetched, already, one story from today's Wall Street Journal,
Willing to Pay to Work for Nothing, corroborates Lat's theory. The WSJ article reports that law firms have grown so eager (perhaps desperate?) to take on interesting pro bono cases that they have started to pay for the privilege. And legal assistance groups, realizing that they have the upper hand, are pumping law firms for contributions. From the article:
Since 2005, Lawyers Without Borders Inc., a nonprofit organization that focuses on strengthening the legal process around the world, has required that law firms donate at least $7,500 a year to guarantee access to the cases it handles. Volunteer Lawyers for the Arts Inc., a nonprofit which delivers legal services to the arts community, gives first crack at desirable cases to firms that contribute to it. In other, less explicit arrangements, firms give money, office space or clerical help to organizations that funnel pro bono work to them. These cases don't just come," says Scott Harshbarger, a former attorney general of Massachusetts who was hired by Proskauer Rose LLP in 2005 in part to head up a new pro bono initiative at the firm. "You've got to pony up."
Of course, pay-to-play doesn't apply for just run-of-the-mill pro bono cases like landlord tenant evictions and welfare matters, where there's always a demand. Instead, firms are more interested in high-profile cases such as asylum cases, voting-fraud class actions and reviewing tax-reporting requirements for organizations like Teach for America Inc.
Is irrational egotism more tolerable when it produces incidental, altruistic results? I'd like to say no, but then again, it beats the alternatives: irrational egotism void of any beneficial results, or mandatory pro bono where every lawyer, from Biglaw to solo practice, is forced to handle a case for a legitimately needy litigant. What do you think?
Posted by Carolyn Elefant on June 19, 2007 at 06:21 PM | Permalink
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