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K&L Gates Chairman Advises Would-Be Law Students to Reconsider

Posted Sep 25, 2009 7:12 AM CST
By Debra Cassens Weiss

The chairman of K&L Gates says would-be lawyers should think twice before going to law school.

In an interview with the Wall Street Journal (sub. req.), chairman Peter Kalis made clear that he doesn’t like debt. Law graduates have too much of it, he said, while his own firm doesn't have it, making its expansion less risky.

Other topics included fixed-fee billing (K&L Gates is “quite open” to alternative fees) and law firm finances (K&L Gates hopes to “hold our own on the bottom line”).

The Wall Street Journal asked Kalis whether college graduates should think twice before heading off to law school, given cuts in law firm hiring. He replied this way:

“Yes. The business model of the U.S. law school doesn't quite make sense to me. Law schools will bring you in from college and educate you, but they will encumber you with six-figure indebtedness at a tender age.

“The assumption was that there was no problem, because law firms like K&L Gates would pay that off for you. And that is where the wheels are falling off.

“I've heard that law school applications are actually increasing. We will be pouring tens of thousands of young people into a market that I suspect is not going to be able to absorb them at the remuneration levels that would have justified them taking on that debt.”

Kalis also addressed debt as it relates to his own firm. He said expansion would be “terminally risky” for some law firms, but not for K&L Gates. When you have no debt, as we do, and you combine with other firms with little debt, the risk is manageable,” he said.

In the last two years, K&L Gates has merged with three law firms: Bell, Boyd & Lloyd in Chicago; Kennedy Covington Lobdell & Hickman in Charlotte, N.C.; and Hughes & Luce in Dallas. The firm has also opened new offices abroad, including in Singapore, Frankfurt and Dubai.

Comments

1.

PubliusEsq
Sep 25, 2009 9:05 AM CST

Finally, somebody in a prominent position within the profession admitting what the rank and file have known for years.  Now, what is the ABA going to do about it?  It is unscionable to continue to allow college grads to attend law school without some limitation as to how many can attend.  Supply has to become commensurate with demand.  The federal loan underwriting gravy train has to be limited by the number of lawyer jobs that the economy can support.  The present scheme is insane.  Additionally, the ABA, or government has to do a comprehensive study to determine what the actual rate of law grad underemployment and unemployment is.  The law schools and NALP currently publish fictitious rates.  Below is a link to a year 2000 Texas Bar study that found that, 6 months after graduation, 38% of licensed attorneys were unemployed.  This is probably indicative of the levels in every state, as Texas had a reasonably strong economy at that time.  The rates now must be astronomical.  How can the ABA let the law schools get away with fraud in the inducement, and even continue to accredite new schools that are completely unnecessary.  There must be some effective gatekeeper on law school entry, lest law grads continue to be burdened with enormous amounts of debt and no job prospects.  The economy simply cannot support the number of lawyers that need jobs. 

http://docs.google.com/gview?a=v&q=cache:dxDSv2T033EJ:www.texasbar.com/TemplateRedirect.cfm?template=/ContentManagement/ContentDisplay.cfm&ContentID=12077+“law+schools”“employment+status”&hl=en&gl=us

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2.

J
Sep 25, 2009 12:34 PM CST

Right… At this point for us 3Ls, we just have to shrug and suck it up. Too late for us… But I sort of wish I’d stayed out when I left instead of coming back to “finish what I started.”

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3.

Click click click
Sep 25, 2009 5:51 PM CST

ABA, I know you’re reading this. Why don’t you help protect the profession like the AMA? Doc review, the last resort of jobless attorneys, is being shipped to India.

Have you no shame?

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4.

M
Sep 25, 2009 6:31 PM CST

ABA,

I will not have one iota of respect for your organization, nor will I pay one single cent of membership dues, until you reverse your decision to allow outsourcing.  The ABA is so obviously in the back pocket of biglaw firms…it’s terrifying.

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5.

B. McLeod
Sep 25, 2009 11:46 PM CST

The opinion referred to has certainly not helped “BigLaw.”  It was Pandora’s box for “BigLaw.”

I do think the questions that were asked could (should) have been answered more narrowly.  Maybe the problem was that the question itself gave such offense that careful response was not a consideration.  It does not matter now.  This is well out of the bottle, and cannot be put back.

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6.

anon solo
Sep 26, 2009 6:57 AM CST

ABA stands for American Biglaw Association

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7.

fed up
Sep 26, 2009 7:02 PM CST

Bunch of crybaby lawyers.  Millions of ordinary people need legal services in this country.  Go serve them in your profession.  Figure out the finances like millions of ordinary people do every day.  Or go get a so-called real job.

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8.

Dan
Sep 28, 2009 6:03 AM CST

#4- I completely agree! The ABA is generally thought of as the organization that “regulates” the industry. In doing so, how has there not been even the slightest attempt to mitigate the circumstances? I attended the ABA conference in Chicago over the summer, anxiously awaiting to see if there would have been any presentations or seminars on “responsible law school recruitment” to nobody’s surprise, of course there was nothing! ridiculous…really.

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9.

Loyola 2L
Sep 28, 2009 7:31 AM CST

feed me

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10.

to: fed up
Sep 28, 2009 9:37 AM CST

Yes millions of ordinary people need legal representation - that is why the ABA fails as an organization…its current policies (or lack there of) do NOTHING to fix this problem. The ABA’s plan for fixing the glut of lawyers in under-represented communities is to rubber stamp the approval of new private law schools with tuition and interest rates that cannot feasibly be paid off based on an average attorney’s salary. Even with the new IBR “breaks” from the government, most recent law graduates cannot afford to serve the public.

Think about it….when most of the big law partners went to law school, tuition was a lot cheaper and did not hyper-inflate until recently. Current tuition rates have climbed leaps and bounds over the rate of inflation and the salary rate increases from when those partners were in law school. Now firms are freezing or reducing salaries, intiating hiring freezes, and outsourcing legal services while law school tuition rates keep climbing without any slowdown.

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11.

jason
Sep 28, 2009 11:58 AM CST

Medical school is a better avenue these days.

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12.

Ben
Sep 28, 2009 3:32 PM CST

Someone asked me if the ABA was a union for lawyers.  I said, “Well, no, it’s like you had a union and instead of the workers running it, the management ran the union.”
“Lawyers” graduate from law school with arguably less practical skills than a paralegal, and almost totally dependent on being blessed with an apprenticeship (aka associate position) to actually learn to practice. 
The whole system is messed up.  It is ruining lives.  You can’t even declare bankruptcy and get rid of this debt.  You’re screwed.

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13.

B. McLeod
Sep 28, 2009 11:51 PM CST

Best of all possible worlds!

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