Market Power: Universities Can Put Their Money Where Their Mouth Is

In bad economic times, power shifts from suppliers to demanders. In the legal market, that means from lawyers seeking jobs to law firms, and from law firms seeking clients and work to clients. One important group of institutional clients that it's easy to forget about are universities. The same universities and law schools that say they can't do anything about law firm hiring choices and diversity and gender equality. They may not have power as job fair hosts trying to boost their employment numbers for U.S. News, but as clients with a lot of legal work to allocate to firms they have a lot of market power that could be really useful if they harnessed it and wielded it effectively.

Building a Better Legal Profession wondered if university legal offices were already using their market power, so students decided to do a phone survey to ask about how in-house lawyers pick outside counsel and allocate legal work. They started with the legal offices at the home universities of some top law schools, and widened their survey based on recommendations and references from people with whom they spoke. In the end they spoke to representatives at 10 schools. Here is some of the most basic information they found:

• When asked how they choose outside counsel for university legal work, 0 of 10 university General Counsels mentioned diversity unprompted.
• The big factors that all of the General Counsels did mention in choosing outside counsel were expertise, value/fees, and relationships/recommendations/fit. Geography and local expertise sometimes came up.
• All of the schools surveyed used multiple law firms.
• Some schools gave most of their work to afew preferred providers, while others spread out the work very widely.

Institutional Inconsistency

            Universities think about the diversity (racial, gender, socioeconomic, and geographical) of their own student body, and they are concerned when their numbers dip. Yet they don't seem to give much thought to equality when allocating millions of dollars each year. And there is some endemic unfairness in law firms that leads to employment of strangely low numbers of women and minorities, particularly in positions of power. This unfairness is magnified in tough economic times, as demonstrated by this year's American Lawyer Diversity Scorecard; for an explanation of the numbers from The American Lawyer, go to their article here; and for explanation and commentary, see BBLP's previous blog post on the subject (here).

            In our next post, we'll follow up with some thoughts about what universities can do as institutional legal clients.

Building a Better Legal Profession (BBLP) is an organization based at Stanford Law School.   BBLP is a national grassroots movement that seeks market-based workplace reforms in large private law firms. For more information, visit BBLP's Web site at www.betterlegalprofession.org.