The American College of Trust and Estate Counsel has surveyed the academic landscape — and found it wanting. The nation's law schools have been losing interest in their practice area, reducing, even eliminating courses, and failing to replace retiring professors.
Hoping to stem the tide, this month ACTEC's legal education committee is sending a letter to deans at the 186 U.S. law schools accredited by the American Bar Association. The crie de coeur protests “the tendency in law schools nationwide to decrease emphasis formerly placed on the subject of wills and trusts and on related estate planning courses.” It warns that “the entire profession suffers” from the loss, because “these courses instill essential skills in analysis and writing and introduce the concept of fiduciary responsibility.”
Trusts and estates experts around the nation echo this concern. For if law schools don't prepare T&E specialists, who will? “Practicing lawyers are having a devil of a time figuring out how to train their young lawyers,” says Jeffrey Pennell, a noted professor of trusts and estates law at Emory University School of Law.
With the pressure of billable hours, few firms have time for extensive mentoring in any legal specialty. Some top firms require T&E associates to get an LL.M. Others rely on the dizzying array of continuing legal education courses now available. Come the Spring semester of 2004, New York University will offer yet another option: an advanced professional certificate in estate planning, requiring only 12-14 credits (half that demanded by its prestigious LL.M. in tax). “This is just such a burgeoning area, with lots of interest by attorneys in the field to learn more, and also by attorneys who want to segue into another field,” says Mary Silver, the new director of the graduate tax department's part-time program. Villanova University School of Law started its certificate program last year.
The training of the next generation of trusts and estates lawyers is in a state of flux — in large part because the profession is. Much of the high-volume, low-rate T&E work is vanishing as the tax-free deductible for estates rises annually until 2010, when it is completely eliminated for that one year. If the Republicans succeed in permanently repealing what they disparage as the “death tax,” this part of the practice could be gone forever.
At the same time, though, the much-heralded “Great Wealth Transfer” looms, and with it, the potential of an unprecedented need for estate planning among high-net-worth individuals, mostly nouveau riche baby boomers. Many financial and estate planners are getting into the business of wealth management because economists predict at least $41 trillion will change hands by 2052. The result, says Daniel Daniels, the partner in charge of the private clients group in the Stamford headquarters of Cummings & Lockwood, could be “fewer trusts and estates lawyers, but those who stay will be very high-end players.”
Historically, trusts and estates work has been a gentlemanly practice, a service to existing clients. Big-firm interest in the specialty waned during the last two decades, as pressure to generate revenues increased and resources were diverted to such moneymakers as mergers and acquisitions, high-tech and, lately, bankruptcy. Some T&E lawyers defected, others were cast off; many landed in mid-size firms or started their own boutiques.
But when major firms undervalue T&E, “they're taking a very shortsighted approach to a long-term situation,” says Sanford Schlesinger, chair of the wills and estates department at Kaye Scholer LLP in New York. “The access to these clients, usually people of great substance and great importance, generally is available to the T&E lawyer.” In other words, T&E lawyers can be valuable rainmakers, capitalizing on personal relationships with clients to generate business for other practice groups.
Permanent repeal of the estate tax would not diminish the T&E lawyer's critical role, specialists insist. “Even if there isn't a tax issue, there's always the need for the disposition and devolution of the assets,” Schlesinger says.
Some major firms agree. In August, Holland & Knight LLP announced the formation of a private wealth services section, lending a higher profile and more centralized management to lawyers clustered throughout its sprawling network of offices.
Too bad young lawyers also don't tend to see T&E as a thriving specialty.
Law students “get nervous when they see estate planning,” says Jeffrey Kahn, an assistant professor at Santa Clara University School of Law. Usually, students ask, “‘Didn't that [tax] get repealed?” Then they worry: “‘Am I going to find a job?’” Says Kahn: “We explain that there's a sunset provision” on the law reducing estate taxes, and tell them that, no matter what happens to the estate tax, “there will always be wealthy people who want to control the way their money gets transferred.”
But even young practitioners who profess satisfaction with having chosen T&E admit they might not go into the specialty if they were starting careers now. Rachel B.G. Sherman, a mid-level associate at Cummings & Lockwood, targeted the practice area relatively early in her studies, following the example of a father who was a T&E lawyer and the advice of a mother who was a family litigator and found trials left too little time for her own family. Sherman says, “If I was in law school right now, I don't know if I would go into trusts and estates.” Without the first-hand experience she has gained since graduation, she might have been dissuaded by uncertainty about the estate tax. Most of her peers, she notes, didn't deliberately pursue T&E, but rather fell into it later.
Some students get turned on to the practice through assignments or rotations in T&E departments of law firms during summer clerk-ships, while others take an introductory elective at law school. “The majority of the students that I get in the elective take it because they think it shows up on the bar exam. A lot of them are there grudgingly,” says Tanya Hernandez, a professor at Rutgers University School of Law-Newark. “Often students leave the class more interested, and lament that they didn't take it earlier in order to do the upper-level electives.”
Advanced courses may not be offered at their school — and the higher-ranked the institution, the less likely they will be. “The national law schools are teaching fewer mainstream practice courses,” says Professor Pennell at Emory.
The bifurcation of law school priorities is illustrated by the different experiences of father and son tax professors. Jeffrey Kahn sees a high demand for T&E courses at Santa Clara, while his father, Douglas Kahn, watched as attendance in his former estate and gift tax course at the University of Michigan Law School dropped from about 100 students in the early 1970s to less than 20 the last time he taught it in the mid-‘90s. Now the estate and gift tax class attracts few students and is taught by an adjunct. “Students are turning away from courses that are more doctrine-based. I don't think the students want to work that hard,” says Douglas Kahn. “Maybe they see that it's not as valued.”
When courses are taught by adjuncts rather than tenured professors and when retiring scholars are not replaced, a message is sent to students that the area is not vital. Scholarship also suffers. “The kind of writing that's being done in the legal academic world today, by and large, just isn't being done in the trusts and estates area,” says Douglas Kahn. He argues that the theoretical and inter-disciplinary analyses popular with law reviews — in comparison to the more pragmatic advice published in bar journals and legal magazines — help to annoint the academic stars that law schools court to fill faculty vacancies. “It permeates through the top students who will end up on law reviews, will emulate the top professors, and won't have taken the trusts and estates courses.”
Kahn, like numerous professors and practicing attorneys, laments an educational system he sees as growing more removed from the profession and less practical, leading lawyers to resort to graduate programs to bridge the widening gap.
Graduate school often is the only recourse for those seeking sophisticated, sustained T&E instruction. As more lawyers enroll in such programs, schools are creating new options.
The University of Miami School of Law offers the nation's only master of law degree in estate planning. Students take 32 credits (compared to the 24 credits for most LL.M. degrees), usually in a single year. Enrollment has risen from 10 students in the mid-1990s to, these days, about 20 full-time students and a few part-timers. Semester-long courses akin to those offered at most graduate tax programs are followed by a series of one-week intensive seminars on topics such as charitable giving, multinational planning and fiduciary administration.
At the University of Missouri Kansas City School of Law, there's an LL.M. in tax with an emphasis on estate planning . While it falls under the umbrella of the graduate tax program, the required courses are more specialized, including drafting and preparation of estate plans. Students also choose from electives such as elder law for estate planners. The program was developed in response to the dearth of masters degrees in this area, but now fewer students at the school are devoting themselves to estate planning “because of upheaval in the law,” says Maureen Scully, acting associate director of the graduate tax program.
Other law schools have established concentrations of estate planning electives within the curriculum for a masters in tax. There is, for example, the trusts and estates cluster offered at the Georgetown University Law Center in Washington, D.C. A few schools have packaged these courses in certificate programs that put practitioners on a fast-track to specialization. Temple University's Beasley School of Law began offering an estate planning certificate 10 years ago that requires only four comprehensive courses. “We knew the first semester that there was a lot of demand. All of a sudden they became our most popular courses,” says Adelaide Ferguson, the law school's assistant dean for graduate and international programs. About a third of the 12 to 20 students in the certificate program each year end up continuing in the LL.M., tax, program. Temple's success attracted competition in the Philadelphia area: Last year, Villanova University School of Law launched an estate-planning certificate program with two tracks, one for attorneys, the other for accountants and other professionals.
New York University School of Law — until now New York City's only provider of an LL.M. in tax — is also getting into the act. In the spring of 2004, the first class of mostly part-time students in the certificate program will begin taking the same trusts and estates courses that masters students do, but without having to attend the pure tax classes. Lisa Stern, a fifth-year in the T&E department at New York's Proskauer Rose LLP who completed her LL.M. degree at NYU in December, found the estate planning classes directly applicable to her work at the firm. But, she adds, “I did feel that a few courses were more in-depth in tax than I needed.”
Stern began her graduate studies fresh out of law school when she joined her former firm, LeBoeuf, Lamb, Greene & MacRae L.L.P., and discovered that the T&E department expected its associates to pursue an LL.M. “They said, ‘Welcome to the department. When are you starting [at NYU]?’” she recalls. Like some other large law firms in New York, LeBoeuf Lamb foots the bill for tuition and accommodates associates' part-time course schedules.
This fall, the city's T&E lawyers have another option for an advanced degree: New York Law School is starting an LL.M. program in tax that offers a concentration in estate planning. “We felt that, since NYU can only take so many people, there really was room for us to give high-quality, practical training,” says Professor William LaPiana as he prepares for more than 25 students in the inaugural class. “Managing wealth is complicated to do, and it's becoming much more difficult to do. This requires far more knowledge on behalf of attorneys than ever.”
Complex and evolving tax laws have long made trusts and estates one of the most popular, and increasingly competitive, subjects for continuing legal education. The largest programs in estate planning were initiated decades ago, even before states began adopting CLE requirements. Today 40 states mandate CLE, and others are considering it.
Now, though, these programs are expanding to attract wealth management professionals of all stripes. Accountants and other non-lawyers comprise as much as 20 percent of attendees at major CLE programs. The University of Miami's Philip E. Heckerling Institute on Estate Planning is the largest and most prestigious CLE program in the field, with about 2,500 attendees last year. Heckerling has incorporated classes that appeal to this nonlawyer population as well as attorneys who are doing more fiduciary work. This winter, the 38th annual conference will feature a new financial assets track. Sessions on fundamental skills were added a few years ago for the entry-level lawyers.
“Over the last 10 years, there has been an explosion in the CLE providers,” says Alexander Hart, director of the ALI-ABA Committee on Continuing Professional Education, a collaboration between the American Bar Association and the American Law Institute that is one of the nation's largest providers of CLE. The group's T&E programming “is big proportionally to the portion of the bar that practices estates and trusts,” says Hart, who attributes this to “more estate planners than are visible, because they're hiding behind shingles that say, ‘attorney at law, general practitioner.’”
To reach lawyers in remote geographical locations, ALI-ABA and other major providers such as the independent ABA Center for Continuing Legal Education and the 70-year-old Practicing Law Institute, have added teleconferences and webcasts. Although these high-tech offerings are not accepted for mandatory CLE credits in some states and don't afford the same networking opportunities as in-person events, they can accommodate lawyers reluctant to travel because of post-9/11 fears, cost-consciousness or concerns about losing billable hours.
Some law firms also are using high-tech to keep counsel current. Withers Bergman LLP, a mid-size tax specialty firm that is the product of a recent transatlantic merger, is increasingly using teleconferences and webcasts, as well as videotaped speakers at its main U.S. office in New Haven. These options allow the firm to expand training beyond the two live seminars a year budgeted for its associates.
Firms like Withers Bergman and its larger competitors also are developing more structured in-house programs, starting with orientation and continuing with regular lunch seminars.
For Holland & Knight's new private wealth services section, “one of the primary issues is training and professional standards: How do you insure that quality across the country?” says J. Alan Jensen, a T&E partner in the firm's Portland, Ore. office. Among the components: regular meetings using video- and tele-conferencing to connect members of practice subgroups across geographic divides.
Some firms put a partner in charge of training associates, with the understanding that the lawyer will bill less hours than other partners. In January 2002, Jeffrey Cooper was brought in as a partner at Cummings & Lockwood, a mid-size firm with about 60 lawyers in its private clients group, to revamp the firm's training program so it would better leverage the expertise available in-house. “In full-service law firms like ours, associates are now expected to bill almost like partners,” says Cooper, who is not compensated based on billable hours. “What we're trying to make sure is that the economic pressures to bill and the technology doesn't just make it too easy for associates to skip that foundation. So it's a bit of a return to how things probably were 25 years ago.”
Other aspects of the Cummings & Lockwood program include an annual “boot camp” for newcomers, Cooper's reviews of every document first-years draft and bi-weekly lunchtime seminars at which partners and associates discuss everything from investments and charitable trusts to family business entities and probate court practice. The sessions start with a review of basics, then an examination of specific issues.
At just such a Cummings & Lockwood lunchtime session this August, 20 lawyers of all ages sat around two long conference tables, with another dozen lawyers and a few fiduciary accountants participating via teleconference from other offices in Connecticut and Florida. “Are you a first-time caller?” quipped principal Conrad Teitell, mimicking a talk show host. More lighthearted jokes followed about “floating spouse” and Crummey provisions. The relaxed atmosphere encouraged candid opinions, questions, even disputes.
“I loved the part of the seminar where the partners were going back and forth, sparring,” says mid-level associate Elisa Rizzo afterward. “It's nice to know that there's still disagreement, different ways of handling the same issue.” The firm's structured focus on training was a primary attraction for Rizzo, a lateral from a top Wall Street firm where, she says, “I was concerned that I wouldn't learn enough to become an independent, self-sufficient attorney.”
Hands-on training can be more difficult to arrange, as clients may feel uncomfortable having associates listen to discussions of sensitive personal matters — even if there's no charge for the young lawyer's presence. David McCabe, a partner at Willkie Farr & Gallagher, persuades clients by arguing that having an associate at a client meeting saves time, and avoids potential misunderstandings. “If the associate is listening closely and taking copious notes, there's a lot less that I need to translate to them in the drafting of the documents.”
Another way to help associates develop good bedside manners and gain first-hand experience is by drafting wills for the firm's staff, says Jay Waxenberg, the partner in charge of the trusts and estates practice at Proskauer Rose.
Despite the potential danger of firm lawyers becoming in-bred by circulating the same perspectives, as one CLE provider warned, such training certainly helps ease the transition into private practice. Still, ACTEC members and other elite T&E lawyers believe that the professional training opportunities — at law firms, CLE programs and graduate schools — do not eliminate the need for more trusts and estates courses at the J.D. level. It will take more than a letter to law school deans — to reverse what New York Law School's Richard LaPiana describes as a “reinforcing downward spiral” or “nasty negative feedback loop” between the nation's top law schools and large firms. But practitioners can take heart: The T&E bar has begun to fight back.