One Gets Oats, the Other Gets Only Hay

At Well-Paying Law Firms, A Low Paid Corner reports on “in-sourcing,” the growing practice of big law firms hiring “career associates” or “permanent associates,” full-time non-partner-track lawyers staffing offices in places like Wheeling, West Virginia and Dayton, Ohio.  They do much of the same work as their partner-track colleagues, travel less, work more regular hours, and often earn less than half–the article mentions salaries of $60-$70k–than the $160k starting salary of a partner-track first-year associate.   Such positions make good economic sense for firms trying to control costs (“[e]veryone acknowledges that $160,000 is too much, but they don’t want to back down because that signals they’re just a midmarket firm . . . It’s a big game of chicken”), for clients demanding that firms reduce billing rates, and for lawyers looking to combine big-firm type work with family responsibilities.  They also contain the seeds of frustration and discontent:

[A] two-tier system threatens to breed resentments among workers in both tiers, given disparities in pay and workload expectations. And as these programs expand to more and more firms, they will eliminate many of the lucrative partner-track positions for which law students suffer so much debt.

In other words, there are trade-offs. It would be corrosive to work in such a position as a 3o-ish recent law graduate who thought he or she deserved a shot at partner. Being a donkey in a stable of show ponies can rankle if you focus too much on what you do not have and too little on what you do.  Thus sprach the non-tenure-track faculty.

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Another One Bites the Dust

A friend’s daughter just announced that she is voluntarily leaving her position as a Big Law fourth-year associate to join a smaller litigation firm.  I won’t name the firm she is leaving but it always appears on lists of the country’s top ten corporate law practices.  She has an impeccable academic pedigree and coming out of law school had multiple offers from top Boston firms.  She has not been laid off or cut for sub-par performance.  After successfully chasing the prize her whole life she caught it–and hated it.  She hated the firm’s culture, the way partners treated associates, the constant tension and pressure.  She wants more control over her life and a workplace that doesn’t tie her in knots.  She is thus like most young associates, those golden girls and boys wooed by promises of fat paychecks and practice at the profession’s pinnacle only to leave big-firm practice well before partnership.  It’s a remarkably inefficient system.

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Be Real

Recently a blog reader suggested, after reading Considering Law School?, that I am down on law school.  I’ve thought about her observation quite a bit.  I don’t think my thoughts about becoming a lawyer have changed much in the past decade.  Are recent posts about law as a career choice more critical than my posts of a few years ago?  I’ve counseled caution before the recent bear legal market.  Don’t Go To Law School, The Purpose of Law School II, and Thinking of Law School? Read This have a similar message, which is that many law grads earn salaries that barely cover–or fail to cover–student loan payments.  (Click here for links to all of my law-school related posts.)  I am not singing a new tune.

Still, as the legal job market deteriorated over the past year my advice became more pointed.  There are far fewer jobs for new lawyers today than there were twelve months ago.   Starting salaries are less than they were a year ago.  A friend who graduated this year from BU Law was hired by one of Boston’s best firms as a first-year associate with an expected salary of $160,000, to start this September.  The firm wrote last week to confirm that the incoming class will start work in January 2010, not a major delay under current conditions.  Her salary is still up in the air.  Somehow, as if my magic, the major Boston firms will all decide independently to pay incoming associates the same as-yet-undetermined amount.  Whatever she it is, her salary will be at the top end of the market.  She’s in the minority.  She earned top grades in college and law school, worked incredibly hard, and had to pay her dues to land a big firm job.

Most of the prospective law students I advise are interested in corporate or business law.  Many express their interest in working at large, national corporate firms.  Others possess the interest but are more circumspect about expressing it.  Most are unlikely to get there.  Being a lifelong B+ student does not mean you won’t have a satisfying and successful legal career, but it does mean your chances of landing a job at any of the top 100 firms in the country are miniscule.

Be realistic.  Do not define success by whether you (or anyone else) lands a big-firm job.

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Considering Law School?

Lock the Law School Doors argues in favor of reining in law school admissions:

As firms begin an industrywide overhaul, which has entailed slashing jobs and reconsidering hidebound inefficiencies like the lockstep salary, students will compete for half as many $160,000-a-year jobs this year as they did last. According to the National Association for Legal Career Professionals, the 2008 recruiting season marked “what is likely to be the beginning of a weaker legal employment market that may last for a number of years.”   Meanwhile, as job opportunities abate, law school matriculation rates rise unchecked.

The article takes issue with three lower-ranked New York area law schools that claim “45 to 60 percent of their 2008 graduates who reported salary information are making a median salary of $150,000 to $160,000.”  The key to the school’s claim is who reported salary information.   What percentage of the graduating class is that?  How many of those who graduated into $45,000/year jobs want to report that fact to their law school?  The idea that such jobs await about half of those who graduate from law school is ludicrous.  The reality is that only the biggest firms pay those salaries, in the best of markets the biggest firms only hired from the cream of each year’s graduates–the top few percent, at most, from schools out of the top tier–and in this market they have significantly cut back on the number of new associates.  If you think such a job awaits you after law school take a cold shower, read the article, and talk to some recent graduates.

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No Bell

The recession has whacked salaries of associates of big law firms, but has not reduced the disparity in starting associate salaries according to Study Shows Sharp Disparities in Law Associate Compensation.  The study is based on 2008 starting salaries.  Since 2000 starting associate salaries abandoned a bell-curve distribution for a distribution with two peaks.  The first is part of a small bell curve between $40,00 and $65,000 and accounts for 42% of starting salaries.  The line trends down steadily to $65,000 and then soars to a narrow peak between $160,000 and $170,000, where 23% of starting salaries lie.  A rollback in starting salaries and re-engineering of associate compensation models should move that peak to the left in coming years–it may “inch back toward the $145,000 range” flatten the curve.  In other words the low end will remain low and the high end will move closer to it.

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State of the Profession

Everyone knows that the legal job market is brutal.  Firms have laid off thousands of associates and staff, cut back on new hires and summer associate programs, diverted incoming associates to public-service positions, and deferred new-hire start dates.  New York-based Stroock & Stroock & Lavan has added a wrinkle to the “how-can-I-miss-you-if-you-never-go-away” minuet:  it is paying incoming associates $75k to stay away.  The new hires must decide now whether to take the money, payable in September and January installments, or defer until January–and hope Stroock has positions for them.

My first response is that of course I would take the money and go to Plan B.  Is that the glib reaction of a lawyer who left big-firm life in the rear-view mirror two decades ago?  It may be.  If I were 25, graduating this month with $100,000 (or whatever) in student loans, and believed that big-firm experience and credentials were critical to my career, I would not just grab the cash.  Working in a big firm can be a career-changer.  My years long ago at Mintz Levin provide a still-useful distinct, if dim, aura of legal achievement.  I cannot casually reject the big-firm imprimatur.

I don’t know how aware new law students are of the transformation being wrought in the legal profession.  Everything I’ve written here over the past three years about the legal profession’s tiered nature, and the need to analyze the costs and benefits of law school with a gimlet eye, are truer than ever.  A law school degree guarantees nothing:  not financial success, not satisfying work, not professional respect, not entree to greater things.  Nothing.  I’ve written some two dozen law school recommendations since last September.  Am I complicit in perpetuating mass delusions about the attractiveness of a law degree?

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Grim Career News: One-Stop Shopping

I have keen interest in the job market for recent law graduates.  My oldest son is looking for a position after his current judicial clerkship ends next fall and a 3L friend is gingerly holding a permanent Big Law job offer, fearing it may disappear with one brief email.  As a service to law students, interested observers of the legal job market, and worried parents The Shark (motto:  “don’t stop swimming.  it’s law school”) has compiled all the depressing info we could find on your future, all in one place, a chart detailing which firms have rescinded offers to 3Ls, deferred 3L start dates, and closed or cut back on 2009 summer programs.

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