The new economy, the billable hour, and law school tuition — change is afoot.

When things change, things change.

I’ve written at length before about the perversities created by the hourly rates charged by lawyers. Hourly billing has been the standard practice in most of legal practice for the past 50 years or so. The practice on its face is troubling — just as our current health insurance scheme provides incentives for doctors and hospitals to do and bill more (and, conversely, to engage in less preventative medicine), so too does the billable hour provide incentives for lawyers to do more and, therefore to bill more.

The system has maintained itself in the same way many of our economic practices have maintained themselves — by means of an every increasing pie. And from the provider end the inflation worked its way down to every level — bills, salaries, hours, and law school tuition all skyrocketed. The tuition rise could be paid for by loans that could be paid with inflated salaries. The inflated salaries were paid by inflated bills, which were produced by inflated hours.

And in 2008 the whole edifice came crashing down. Now, all the talk is about different billing practices.

We’re all still waiting for the change, however. One outcome of a change would be, I hope, a decrease in the use of sheer economic weight to out-litigate an economically disadvantaged adversary. As things stand, as much as I hoped always to be efficient for my client, the adversary would require me to do more than I otherwise would if the adversary chose to contest every matter and to thoroughly investigate every single piece of discoverable evidence (no matter how trivial or irrelevant).

And U.S. students are desperate for relief from the tuition costs the billing practices have raised. Legal jobs are scarce, and those that exist are at depressed salaries. But tuitions have not yet come down. They’re going to have to.

The financial crisis is an opportunity for innovation in legal practice and law schools.

This blog is supposed to be about law and innovation — both the ways law affects innovative and creative endeavors and the ways creativity informs the practice of law.  I’m not sure where I go t the nerve to believe I have something worth saying on these matters, but it is gratifying when I find out that I’m not entirely empty-headed.  The New York Times yesterday published an editorial observing that the economic downturn is hitting the legal profession just as profoundly as it is hitting any other occupation.  As the Times notes, The “American Lawyer is calling it ‘the fire this time’ and warning that big firms may be hurtling toward ‘a paradigm-shifting, blood-in-the-suites’ future.” The thrust of the editorial, though, is that crisis is an opportunity for change and that the legal profession is much in need of change: “The silver lining, if there is one, is that the legal world may be inspired to draw blueprints for the 21st century.”

I am not at all happy with the job market, especially for my students.  They are talented, well educated, and hard working people who will do a lot of good for their clients.  But I am gratified that the types of changes the Times are ones I’ve long believed are important.  I do believe the U.S. legal system is a brilliant embodiment of practical justice, but it’s biggest defect in achieving justice is its cost.  It is appalling that achieving any sort of justice against any adversary willing to fight you (regardless of the merits of his cause) will invariably cost you enormously.  The fact someone whose position has little or no merit can make you expend enormous amounts of money to prove the demerits of his claims undermines justice by tilting the entire system radically in favor of the more wealthy members of our society. The internet has brought home this phenomenon to artists who want to make their work available and to people who want to post their family videos, but it will be one familiar to anyone who has called upon the legal system or been dragged into it, whether through divorce, the need to obtain payment from one’s customers, the need to get relief from economic or physical threat, or any of the myriad other ways one might need to call upon legal process to attain justice.

Two ways the economy will force down the costs of using lawyers are (1) the salaries of lawyers at the top end (which the Times notes begin at $160,000 at the wealthiest law firms) will have to be reduced and (2) the reduction of money available to spend on lawyers will mean “more leverage to push . . . for successful outcomes” on the part of those who have traditionally been less well financed.

Moreover, law firms will have to change their billing practices, replacing the “billable hour,” Law firms also, of course, will have to come up with more efficient ways of delivering their services.

The Times also suggests the economic crisis might require law schools to “become more serious about curricular reform,” in particular by “including more focus on practical skills.”  I could not agree more — making clear the inextricable bond between legal theory and legal practice has been central to my work as a law professor.  I don’t understand how you can teach law without understanding how it works.  My conviction is evidenced, I hope, by the school i’ve chosen to teach at this year and (at least) next, the University of Detroit Mercy Law School.

But I am skeptical of the power of the economy to change law schools.  Lawyers and judges have for a long time called for  law schools to focus more on training lawyers (rather than teaching legal theory in a way that makes sense primarily to law professors, not lawyers or judges), and still the changes have been very, very slow and very, very minor.  Law schools do not look to their success at training lawyers to guide their curriculur decisions; rather, they principally look to a rankings system that rewards law schools that admit students most like the students at the schools that are already the highest ranked. That’s a formula to entrench the status quo, not a formula for change. Nor does the critique from within law schools of the most influential rankings system really do much to solve the institutional deference to the status quo.  Brian Leiter, a law professor at the University of Chicago, publishes his own rankings and regularly critizises the most influential rankings, but even he relies principally in judging law schools on the “scholarly reputation” of faculty (which is largely based on where the professors teach and the law reviews in which they publish, both of which are merely indicators of how well those professors fit the prevailing view of quality) and student undergraduate grade point averages and LSAT scores (both of which correlate to success as law students, not as lawyers).

It cannot hurt, though, that the New York Times has joined the chorus calling for law school’s to focus their curricula more on the practice of law.