Is Law a Business or Profession?

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Is law a profession or a business? This remains an ongoing debate, and raises questions about whether law schools should teach the business side of law. But first, let’s examine the profession vs. business arguments.

Legal Profession vs. Legal Business

Traditionally, law has been treated like a profession. Lawyers have a government protected monopoly because only lawyers can practice law. Lawyers must maintain high ethical codes. Further, lawyers often know each other through law school, court interactions, involvement in deals, politics, or law related social events, so lawyers have their own community, which is often interwoven to an extent that surprises new lawyers.

There was a time when most people didn’t know a lawyer. These days, most people know at least one lawyer.

What has changed? One thing that changed in recent decades is the number of lawyers. Law schools are graduating more lawyers each year. This increase is based on larger class sizes at current law schools and the addition of new law schools. Further, the creation of online law schools has grown the base of law graduates even more. And since online law schools are not approved by the ABA, the ABA has no control over their growth.

Another factor affecting change in the legal profession the past few decades was lawyers’ conversion to a business mindset. As the number of lawyers increased, lawyers had to be increasingly savvy about bringing in clients through networking, marketing, and other methods of competition.

Lawyers who adopted this business mindset went beyond client acquisition, and focused on retaining clients through improved client relations, better communications, better reporting to clients, and alternative fee structures. In short, lawyers increasingly focused on client satisfaction to keep clients from finding another lawyer now that more lawyers were available in the market.

Should Law School Teach the Business Side of Law?

The evolution of the legal profession and integration of a business mindset raises the question of what role law schools should have in teaching the business side of law.

For the most part, law schools in the United States teach the substantive legal doctrines and procedural legal systems to prepare law students to understand legal theory and apply it in court. Rarely do law schools teach about legal marketing, project management (lawyers obviously must juggle multiple cases and matters at once), managing secretaries and junior associates, and networking.

In addition to these pure business concepts, other concepts are hybrids between law and business. Many of these areas are taught in law school, at least to some degree. For example, areas like structured settlements involve an understanding of both law (damages, assignment, etc.) and business (valuation, investment markets, risk assessment). The areas of law practiced by transactional attorneys frequently require similar knowledge of business subjects.

Do we assume that new attorneys will pick up these skills naturally during their first few years of practice? Or maybe we leave these skills to be taught by CLEs. If the skills and knowledge required to operate a law firm under best practices is important, maybe law schools should teach theses areas rather than leave them up to lawyers to learn themselves.

However, there is also merit to the argument that law school can’t contain every possible subject a new attorney must know, so it must focus on the priority subjects, leaving the other subjects for lawyers to learn in other settings. This is a valid argument, but it is only reasonable if its premise is true.

That is, this argument is only reasonable if current law school courses actually are more important than teaching law students how to manage multiple projects, delegate tasks effectively, market themselves, and compete in this new legal environment.

That question probably has supporters on each side. However, I think the time is coming when business skills will no longer be able to be neglected by law schools. The U.S. legal market is becoming more competitive, and the international legal market, including India, is increasingly carving away parts of American law that it can do more effectively or cheaper (or both) than American attorneys.

In other words, since competition is inevitable, success for new attorneys and their law firms will be obtained by responding to market changes, and being the best attorneys possible, which means integrating the business mindset and business skills to attract and keep clients.

On a more personal note, a vast majority of a law students I attended law school with have no experience in business or an understanding of the business side of law. Maybe they will learn this. Maybe they won’t have to learn this, because they practice law with someone who handles the business side for them.

But I have a feeling that many of them will struggle with these areas because they don’t even know what they don’t know. I wish that for their sake, they had at least some education on the business side of law.

Your Advice?

What do you think? Is a business mindset important for today’s attorneys? If so, should it be taught at law school?

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3 Responses to “Is Law a Business or Profession?”

  1. Shaheem Ali Says:

    The law career is no different than any other career in a free market system. Today, in any business, having a great product or service(highly-skilled legal representation)alone is not suficient to maintain and expand a successful business.

    In addition to managing multiple projects, delegating tasks effectively, marketing themselves & their office, and competing in this new legal environment (which may include competing against outsourced services from other nations), businesses must maintain a profitable enterprise by consistently managing expenses, making wise decisions when spending money for marketing, office space, the hiring of employees, etc., and keeping awareness that the revenue/expenditure correlation must be regularly analyzed for prifitability. Our goal should not be based on courtroom wins alone. Our goals should also entail building a successful business enterprise.

    Too many business offering a great product or service fail in this ever-increasing competitive free-market system because of their lack of knowledge, or lack of appreciating the value, in business acumen.

    Finally, sending new lawyers out into the ultra-competitive legal arena without preparing them with the proper business acumen is like teaching law students case law without teaching procedure. It makes success much more difficult than it really needs to be.

  2. Rob Says:

    An interesting question. As an attorney with over a decade of experience, my belief is that Law was a profession that has been turned into a business. For this, you can basically thank the baby-boomer generation of attorneys.

    That’s the generation that basically looked at what CEOs were making in the 1980s and thought, “hey, we should make that much too”. However, there were limited ways to do that with the billable hour. So, they took the law firm culture from more of a family-like profession (where most lawyers make partner and parter is a job for life) to a pyramid structure where those who were already partners (them, at the time) were on top, followed by other tiers of lesser partners, associates, and counsel. Partners who weren’t driven enough to give up their lives to billing also are shown the door. This started with the bigger firms, and has trickled down to where even tiny firms in small towns have multiple tiers.

    One problem with that is that, really, most lawyers are poor business people. They didn’t foresee that operating more like a business would open them up to business-like consequences (especially higher associate turnover) and related costs.

    Old partners who read this will probably respond with the typical legal bravado: these billing requirements are for the tough, and those weaklings out there can’t hack it. I don’t know about you, but I don’t want to hack it through life — I’d rather have time for friends and family, and other interests. A broken family seems to be a common theme among these “tough” high billers.

    So, the next time you hear an attorney in their 60′s grouse about associate turnover or the young associates wanting to have lives, remember it is that generation that set the current course, but failed to really realize the goal — CEOs work very hard, but they are able to sell companies on their value without submitting time tickets.

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