BigLaw Clients Push Back

The BigLaw business model continues stumble, according to The Wall Street Journal in What’s a First-Year Lawyer Worth?:

Law firms often treat the first two years of an attorney’s career as a sort of apprenticeship, albeit a well-paid one: the yearly salaries at many of the nation’s largest law firms start at $160,000. Traditionally, law firms have recouped costs of young attorneys by giving them simple jobs—research, proofreading or culling important documents from boxes of paperwork—and passing the costs along to clients in the form of hours billed at $200 or $300 a pop.

But many companies are now refusing to pay those kinds of bills. According to a September survey for The Wall Street Journal by the Association of Corporate Counsel, a bar association for in-house lawyers, more than 20% of the 366 in-house legal departments that responded are refusing to pay for the work of first- or second-year attorneys, in at least some matters. Almost half of the companies, which have annual revenues ranging from $25 million or less to more than $4 billion, said they put those policies in place during the past two years, and the trend appears to be growing.

Increasingly, companies send their simple jobs to contract lawyers, independent contractors who are far less expensive than young associates.

4 Replies to “BigLaw Clients Push Back”

  1. Morgan Schapiro

    This has been a trend for a while since 2008, especially as a surplus of lawyers has been growing. It has become much cheaper to in source this kind of research to lawyers and law research firms in places like Kentucy or larger firms like Thomson Reuters (WestLaw Next).
    It is a pretty good policy on the part of firms and law firms are going to be forced to adapt into more efficient models.

    In the coming years I don’t think anyway will be doubting the validity of a Business degree and a Law degree, even for those not in corporate law.

    In reality Law Schools are also going to have to adapt. If consultancies can hire people straight out of undergrad and put them to work, then there is no excuse (besides the barriers that have been set up in the profession over centuries to keep wages artificially high) for lawyers straight out of school being unable to do fully fledged legal work. Especially at 160k a year (although I’ve read that most are only getting around 120k, you can’t rely on the self reported numbers coming from law schools).

  2. Peter Rhim

    I believe this is a good idea but could be modified. The apprenticeship idea for the first two years seems like a very logical way for attorneys to grow and develop.  It seems like they learn the little things of what goes on in the business. But I agree they shouldn’t be paid $160,000 for these simple jobs they do. They is an absurd amount of money for an entry level position. But I don’t agree that you should not pay them at all. While not paying them would save money, firms should offer some sort of compensation for their actions. It shouldn’t be on a grand scale of a six figure salary, but something decent in return for their work. Their duties give them experience in the law field which will help the company and the attorneys further their spectrum.

  3. Raven Lok

    A lot of young lawyers  have already spend years in law school, doing summer internships, and take exams. But most clients do prefer to hire lawyers with actual experience for their case. Since the experience lawyers make many times the apprentice’s salary, it is only fair for the first and second year lawyers to make a decent amount considering the time and money they spent to obtain their position as lawyers.

  4. Anand Brahmbhatt

    I’m not sure what I feel about that. I think when you compare these findings to the life of other professional schools – it sorts of makes sense but I guess the hardest part to deal with is the fact that it’s a newer thing. Med students don’t make much money the first five years, PhD students also just make enough to cover basically their living expenses. So relative to that, it makes sense. But then the question is, how many lawyers can’t even find free work out there? I’m really curious to know.

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