A legal giant’s collapse presents a valuable lesson for anyone considering law school, the author of a new study says. And recent history shows that such collapses occur with some regularity, uprooting hundreds of lawyers at a time.
Brobeck, Phleger & Harrison was once among the most prominent firms in the U.S. Founded in San Francisco in 1926, Brobeck by the ‘90s had grown into a premier firm for technology companies. It had 900 lawyers, and more than 200 partners in 14 cities around the world. In 2000, Brobeck generated nearly half a billion dollars in revenue, and $1.2 million in profit per partner.
Then the technology sector collapsed, partners began fleeing to other firms, and Brobeck self-destructed under massive debt, going into bankruptcy in 2003. The remaining partners scattered with the four winds.
It’s where those winds carried them that forms the basis of a new study by Chris Rider of the Georgetown University McDonough School of Business and Giacomo Negro of Emory University. The two researchers compared the fates of 224 former Brobeck partners, and came to a striking conclusion. Even decades after graduating from law school, the relative prestige of a lawyer’s degree played a strong role in where he or she ended up after the Brobeck collapse.
AFTER THE FALL
“The greater the prestige of one’s law school, the better one’s post-failure labor market outcome,” Rider and Negro write in the report, to be published in the May/June issue of the journal Organization Science.
Lest the prospect of ending up at a firm that fails seems unlikely enough to disregard, consider not only Brobeck, but Heller, Howrey, and Dewey – not Donald Duck’s cousins, but major law firms that have all gone under in recent years. Heller Ehrman, with 200-plus partners and 370 associates, dissolved in 2008. Howrey LLP, with some 130 U.S. partners and hundreds of lawyers, went bankrupt in 2011. Dewey & LeBoeuf, which had once employed 1,400 lawyers, filed for bankruptcy in 2012.
Last year, legal search consulting firm Major, Lindsey & Africa issued a report highlighting the challenges at major law firms. “The global demand for legal services, at least those services traditionally provided by BigLaw, has contracted,” the report says. “New entrants to the legal services market are taking market share away from BigLaw and expect to make significant inroads over the coming decade.”
Rider tells TippingTheScales that the study’s results contain an important takeaway for would-be law students. “If you’re considering where to go, the prestigious school is probably going to be worth it,” Rider says.
TAINTED BY ASSOCIATION WITH FAILURE
Rider and Negro based firms’ status level on rankings in the Vault Law 100 list, and law schools’ prestige on U.S. News rankings. The scattered former Brobeck partners ended up at law firms of quite varying status. Most took a step, or two, or three, backward. Of the 224 partners, 82%, or 183, took new jobs at firms of lower status. Such slippage depended in part on the time they’d spent as Brobeck partners. “The longer a lawyer was a member of the failed firm’s partnership, the more likely he or she was to regain employment at a lower-status employer,” the report says. That correlation appears to reflect the fact that when a firm fails, not all who worked there are tarred with the same brush.
“Although association with failure will cast doubts on all displaced employees’ abilities to succeed in a similar role . . . those most strongly associated with the failed organization are likely to bear the brunt of failure-related discredit,” the authors write. “Graduates of the most prestigious law schools were least likely to experience such a status loss.”
SCHOOL CREDENTIALS TOPS DURING RESUME SCREENING
The researchers believe the “positive status characteristic” of educational prestige can counterbalance the damaging effects of association with a failed firm. “Many employers view ability as increasing with the prestige of higher education institutions . . . educational credentials are the most commonly applied criteria in résumé screening and . . . employers attribute superior ability to graduates of the most prestigious schools independent of academic achievement,” Rider and Negro write.
In general, law degrees provided protection from post-failure career slippage in accordance with their level of prestige. “It’s pretty continuous,” Rider says. “If you’re in the top 10 you’re generally better off than if you’re at No. 30, and if you’re at No. 30 you’re better than at No. 50.”
The power of a prestigious degree was most pronounced in JDs from the top 10 schools, Rider adds.
“There is a big difference between the top 10 and not the top 10,” Rider says.
The researchers, toward the end of their report, offer another conclusion that may be helpful to people considering law school, or in the midst of applying, or choosing between schools: “One can infer that a decade of experience after being promoted to partner is necessary for a graduate of a non-elite law school to be a comparable labor market candidate to an elite school graduate.”