[A Legal Profession: A Case Study]

DR. EDWARD O. LAUMANN: We're goingto take an empirical illustrationof the transformation of the legal professionin Chicago, in an effort to concentrateempirical period of 20 years to illustratethe transformative nature of the division of labor, scale,and corporate action. [Dr. Edward O. Laumann, Professor,

DR. EDWARD O. LAUMANN [continued]: Department of Sociology, University of Chicago][Case Study: 20 Year Study of Chicago Legal Profession]

DR. EDWARD O. LAUMANN: So we're nowinterested in maybe illustrating thiswith a very concrete example of the legal professionin Chicago.Professor of law, John P. Hienz, at Northwestern Universityand I came to collaborate over a 25 or 30-year period

DR. EDWARD O. LAUMANN [continued]: in a study of the legal profession here in Chicago.We formulated a study designed at 1975,drew a sample of 800 folks from about the 18,000 peoplewho had law offices in the city of Chicago,and in 1995, we replicated that questions

DR. EDWARD O. LAUMANN [continued]: with a new sample that represented--as a sample of 8000 people again--that were drawn from 36,000 lawyers whohad offices within the city.So we have two time periods where we have essentiallyseen the sheer volume, or scale, of the legal profession

DR. EDWARD O. LAUMANN [continued]: has doubled in size in this period of time.And we're now interested in how the division of laborproceeds within this particular setting.Now in the practice settings in this tablehere, we see 1975 and 1995 and we see the differentials

DR. EDWARD O. LAUMANN [continued]: in the third column in the growthor decline in the scale-- or in this character of the practicesetting.As you can see in the very top, the solo practitionerhas dramatically declined in his presence, or her presence,in the legal profession in 1995.

DR. EDWARD O. LAUMANN [continued]: This is reflective of the change in the nature of organizationthat is going to be used in answering this activity.In this case here, we're looking at taking advantage of the factthat lawyers charge for their time.So they're very self-conscious about how much time they spend

DR. EDWARD O. LAUMANN [continued]: doing different kinds of-- handling different kindsof legal matters.So they think can actually answerwhat is the percentage of time that I spentdoing probate work, or securities work,or tax for large organizations, or criminal defense, and so on.And as you can see in this particular slide,

DR. EDWARD O. LAUMANN [continued]: and examine at your leisure, you can see dramatic changesover the time between these two periodswith regard to the scale of the division of labor.Business litigation, which consumed about 3.9%of the effort-- legal effort-- in Chicago in 1975

DR. EDWARD O. LAUMANN [continued]: now comes over 13% or 14%, which represents a huge percentageincrease in business litigation.Remember that the bar in 1995 is twice as largeas it was-- so the volume of effortis much larger than it was in 1975.And in addition, it's capturing a much larger amount of it.

DR. EDWARD O. LAUMANN [continued]: So what it is telling us is that the nature of legal interactionamong businesses has become much more litigious,and involves many more challenges that end up in courtto be adjudicated.And this reflects changes in the nature of corporate practiceover this time period.

DR. EDWARD O. LAUMANN [continued]: So we have here an example of changes in scale, or volume,and changes in the nature of specializationas it moves from a new kind of distribution.Now, how do organizations like law firms get organized?We've already alluded to the factthat solo practice is in decline.

DR. EDWARD O. LAUMANN [continued]: There is simply many fewer peoplewho are practicing solo practice or single-person law firm.Most people are practicing in larger entities-- law firms--but they've become organized in very different ways.And the structural features of the three classesof law firms we identify here takes into account

DR. EDWARD O. LAUMANN [continued]: whether departments characterize the law firm.That, is are the law firms organized in departments taxpurposes, for securities law, for corporate tax,for real estate, or whatever.So departments are a feature thatallows an organization to re-organize to a much

DR. EDWARD O. LAUMANN [continued]: smaller set of persons.There's a very interesting point to think about here.If you have n persons in a system-- in an organization--and there are n times n minus 1 possible ties.If you are paying attention to the direction of ties,if you don't want to pay attention to direction,

DR. EDWARD O. LAUMANN [continued]: divide it by 2, and that's going to tell you,so that in a two-person firm, youhave one relationship between a and b.In a four-person firm, you have an increaseof 4 times 3 divided by 2-- six relationships thatare possible in that firm.

DR. EDWARD O. LAUMANN [continued]: As you can see, the larger the firm-- and it goesup very, very rapidly, in fact it increases exponentially--the possibility of being directly connectedto everybody else disappears as you increase in scale.So we are looking at a situation where in orderto manage organizations, you begin clustering

DR. EDWARD O. LAUMANN [continued]: more people into specialties.In those specialties are then related to each otherin an administrative way.The other characterizations have to do with the presenceof a nonprofessional manager.In the old days, in 1975, it was notlegally possible for the firm to be

DR. EDWARD O. LAUMANN [continued]: managed by a nonprofessional.You had to be a lawyer to be able to manage,to act as an administrator for the firm.They were small firms, so this was not an issue.As you grow in size, you begin having logistic problems.You have to have IT work.You have to add other kinds of administrative capabilities,

DR. EDWARD O. LAUMANN [continued]: which require non-legal training really to do well,and so the emergence of a new kind of managerthat is not professionally tied to the lawitself becomes an option, or a necessity, in fact.The presence of managing committees.Traditionally in a professional collegial firm,

DR. EDWARD O. LAUMANN [continued]: everybody who was a partner had a sayin how they were going to divide the spoilsat the end of the year.With the emergence of these large firms,you have managing committees whichare made up of a small set of peoplewho make all the big decisions with regardto the allocation of money and payments, and so on.

DR. EDWARD O. LAUMANN [continued]: In 1975 it was against the code of ethicsto bid competitively for legal work.This was regarded as unprofessional, and, in fact,in violation of the codes of ethics.Now we have competitive bidding.So firms say, we'll do all the foreclosures for your bank

DR. EDWARD O. LAUMANN [continued]: for this month for closure and it is nowgoing to be done by a bunch of junior people--junior lawyers-- under the supervision of somebody elseto do this in an efficient manner.So, again, we have a new kind of organizational tacticthat is reflected in the final column of the table

DR. EDWARD O. LAUMANN [continued]: where you look at corporate firms, whichare organized like business firmswhere they have a supervisor, and theyhave a bunch of folks working for themunder their supervision in a specialized sort of way.So this is just sort of to give you an ideathat even in this 20-year period, whichis a relatively short period of time,you have the transformation of the corporate activities

DR. EDWARD O. LAUMANN [continued]: of the law firms themselves, so that theytake different organizational shapes,and they do it in order to manage the specialization,and to do it in a way that is competitive.