Clients Want Associates To Get To Work
Clients want associates to remember who pays their salary. As we have previously reported, the authors of What About Clients are trying to start a “Value Movement” which, among other things, asks whether associates should pay their firm for the privilege of working.
Unfortunately, this idea just won’t die. And Holden Oliver thinks that the market meltdown is a perfect opportunity to reexamine the structure of the business of law:
Hopefully, there’s this silver lining in the Down Economy: a renewal of the notion that workplaces exist to serve and give value to Customers and Clients, and the companies organized to help them. Not to serve and cater to Employees. As we see it — and most states have traditionally seen it—it’s a privilege to work. Not a right. And it’s a special honor to learn and practice the law.
More people jump on the bandwagon, below the fold.
Scott Greenfield over at Simple Justice claims that this is an idea whose time has come:
From the perspective of serving the client, there’s always the dirty little secret that big firms like to keep to themselves. When they put a half dozen young’ens on a case (and charge the client fees that would make a 20 year solo practitioner blush), it really isn’t for the clients’ benefit. They actually bring nothing, other than save an old-timer’s back by carrying his heavy bag.If we were to stop worrying so much about the young lawyer, and worry a little more about the client who is subsidizing the young lawyer’s education, would that be wrong?
Well that’s just great! Associates didn’t start the fire, but why not blame them for it anyway?
It seems that if clients are concerned about “subsidizing the young lawyer’s education,” then their issue is with law schools, not law firms. If you want junior associates to do more than review thousands of emails (and by the way: somebody has to review all of your boring emails to make sure that Larry the File Guy doesn’t perjure himself), then you have to train junior associates while they are still in school.
You want to talk about “dirty little secrets?” How about the fact that without astronomically high salaries, many of the best and brightest young lawyers would simply do something else. If you wanted to pay high school teachers $160K straight out of school, America would have the best high schools in the world. Meanwhile, Mr. Woodcock would be standing next to you while some AUSA asked you about “that night you spent in Tijuana.”
It’s a privilege to work? Yes. Absolutely. Thanks ever so much. But it is also a privilege to have really smart people do your bidding and keep you in compliance with a myriad of laws you couldn’t possibly understand. Associates are not leeches; they have a symbiotic relationship with their clients.
You want to take the money away? Go ahead. The legal system would probably be better off anyway if everybody received the same “least common denominator” level of representation.
Simple Justice for Clients and Customers? [What About Clients?]
The Value Movement: Should New Associates Pay for the Privilege? [Simple Justice]
Earlier: Should Associates Pay Their Law Firms for the Privilege of Working There?
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FIRST-SUCK IT EVERYONE!
These pretzels are making me... thirdsty???
I want to say this sucks (and the writing does), but I agree with Elie, clients need to pay for the talent.
Oh, please. Law firms write off this kind of time constantly for clients. Reviewing documents isn't education, it's labor - labor generated entirely by the client. If they want to be cheap about it, the firm can always hire contract attorneys. The client should not, then, be heard to complain when a group of reviewers with no alliance to the client or the firm don't do a top-notch job.
Clients want lawyers to cover everything but the kitchen sink, but they don't want to pay for it.
what are "dirty little secretes"? Is this a hope winters dirty-partner posting?
"than"? Really?
WOW. I don't know about other firms, but at the two V5 firms I've worked at, I don't think it's humanly possible to have to work any harder for or focus any more on the clients.
I think we all know that if clients really meant this, they would pressure partners. There are plenty of law firms available to do work, so if they think they can get a better price somewhere, by all means change. There are a ton of law firms and a ton of lawyers out there.
Clients float things like this to try to put pressure on law firms, but if they really are unhappy they'll show it with their money. The fact is, they want the talent. They need the talent.
So no one should feel bad charging them for it.
What crap. We're supposed to pay for the privilege of learning the practice of law? F-off! Every career has a significant component of 'on the job' learning. Its asswipes like this that think of the legal profession as the guild its always been that lead to dysfunctional law firms in the first place. If firms were run like businesses, so many problems would be solved. Instead, we have this exclusive club that requires us to waste 3 years and hundreds of thousands of dollars for the privilege, when in fact, plenty of people, on shore and off, could do these jobs. This guy can bite my ass.
How about a post on what to do if you get no-offered for performance reasons? Is it okay to work in another field for a year or two and then try to get back into law or by then are you gone permanently?
ATTTL
Holy hell, Elie posts a reasonable (and correct as far as I'm concerned) diatribe! Kudos!
Could a monkey (or Loyola 2L) do a lot of my low level associate job? Absolutely. Would the client end up losing his business because he only paid for a shit-house bunch of lawyers who got shitty training and went up against the lawyers who cared and actually developed their professional ability because they got paid enough to do it? You betcha.
7 -- are you actually surprised, or are you just parroting the thousands before you who have pointed out Elie's glaring editing shortcomings?
I'm sick of hearing clients and people in general complain about legal fees. They knew the fee structure when the engagement started. If they don't want to pay our rates, go somewhere else. There are lots of small shops that can do the work more cheaply. Use them.
Oh, what? You [corporate america] want to cover your ass by using the best and brightest? OK, then STFU!
Why is this posted in Biglaw? The guys who are advocating this work at tiny firms where this proposition actually makes some sense -- their cases aren't that big, there aren't mountains of e-mails to review, and they've got a handful associates at best anyway. Scott Greenfield is a criminal defense lawyer, for pete's sake -- he has literally no need for an army of associates. Hull's firm has a handful of associates and only a dozen or so attorneys overall.
I think it makes sense for those guys; their associates don't have unique work from partners, and it probably is more like an apprenticeship. Where this idea falls apart is when someone attempts to translate it to the Biglaw world, where there IS a ton of low-level work that has to be done. These guys don't realize that their practice is fundamentally different from the complex litigation and transactional work that necessitates the use of a legion of associates, and they're trying to argue that what makes sense for them should also work for a case where there are five million pages of production and forty deponents. It doesn't translate, and we should stop paying attention to them on a blog focused on Biglaw.
Clients can lick my balls. And so can firm management. The part about me going to do something else if the salaries weren't high is spot on. In fact, it's getting to the point where the salaries still aren't high enough for me to put up working in this self-important lame-ass field. I'd rather teach for $50k a year and have my summers off. Besides, kids are less of a pain in the ass than partners and clients.
There is another issue that is absent from the argument. Larger clients tend to have long-standing relationships with firms. They all say "we hire lawyers not firms", but they're full of it at the top levels. So who's going to do this work? When the big boys retire to the Hamptons, someone has to be there to answer the phone.
I agree with this policy,
In the spirit of not learning from the past and letting it repeat (ala past economic meltdowns and our reaction to it) we should go back to the days where companies were client based. EVEN THOUGH it is the accepted consensus between academia teaching management that a employee centered company produces a better product.
Also, lets invade Iran already, whats the hold up?
I've said it before, and I'll say it again. Working at a firm and buying firm services is no different than working-at and buying-goods-at McDonalds. You think that McDonalds Big Mac really costs $2.50 or whatever? No, you're paying for the loser behind the counter to jack off half the day into the mayonnaise. There are inefficiencies in every business from Mickey-D's on up. If this loser wants to riot about law firm inefficiencies, he should also be rioting about gas, food, clothes, haircuts, cars, taxes for gov't services, etc. etc. etc.
Greenfield is a joke. If he thinks it's unfair to pay youngn's salaries that would make a 20 year solo practitioner blush why doesn't he just send his business over to the one-man shop.
Greenfield is a joke. If he thinks it's unfair to pay youngns' salaries that would make a 20 year solo practitioner blush why doesn't he just send his business over to the one-man shop.
15: The thing is, I work for a small firm and they write off associate work all the time. If anybody's getting screwed by the learning curve, it's the firm, not the client.
9: Amen. Nobody shows up the first day of work knowing precisely what to do - not surgeons, not teachers, not consultants, not accountants.
It's all BS from clients - it's a cost they don't want to pay no matter what. Litigation is expensive - it's a cost of doing business - try not to screw up. Corporate work is expensive - it's a cost of doing business - again, try not to screw up. Legal is one of the lowest costs of making a deal. It's not like we are making investment bankers' salaries.
This is such crap. If clients want cheaper representation, there are thousands upon thousands of firms in cities like Albany, Dayton, Pittsburg, Milwaukee, etc. that would jump at the chance to take their work (hell, there are plenty of cheaper firms in manahattan that would be happy for the work).
But if they want a top 50 firm in manhattan to handle their securities, M&A, class action, anti-trust and white collar litigation work, it comes at a price. That price includes the high rates of junior associates who went to top schools.
Seriously, someone has to do diligence on each transaction. It takes a long time and you want a good issue spotter doing it. Sure a mid-level can probably do the due diligence slightly more quickly and competently, but that's why their rates are 40% higher.
I'm sick of hearing clients and people in general complain about legal fees. They knew the fee structure when the engagement started. If they don't want to pay our rates, go somewhere else. There are lots of small shops that can do the work more cheaply. Use them.
Oh, what? You [corporate america] want to cover your ass by using the best and brightest? OK, then STFU!
"Paying for the talent" Haha! At some point we all develop some discernable legal skills (or hope to) but if you think that paying some 25 year old 1st year 160k is just part of "paying for the talent," then you're retarded. Most 1st years don't know their ass from a hole in the wall. Worse yet is when a jerk-off15th year associate/ of counsel does paralegal level work at $500 an hour...no wonder clients get pissed.
Having a good law firm represent you is a privilege, too. If a company doesn't want to pay for prime legal talent, they are free to go to a non-Vault firm. It's not as if only expensive firms are the only ones that exist. Complaining about the expense of top firms when cheaper alternatives exist is buying a Cadillac and demanding Ford prices.
I really don't understand the client's beef about paying first year associates. Nobody is making them pay these fees. If you are a client and feel like you are paying too much, go somewhere else. It's really that simple. If I think I am paying too much for someone to clean my house, I find somebody else who charges less. A client must feel like it gets some value for paying these astronomical fees.
I really don't understand the client's beef about paying first year associates. Nobody is making them pay these fees. If you are a client and feel like you are paying too much, go somewhere else. It's really that simple. If I think I am paying too much for someone to clean my house, I find somebody else who charges less. A client must feel like it gets some value for paying these astronomical fees.
GULC me long time.
GULC = TTT OF THE T14
Last time I checked, I paid over $120,000 for the privilege of studying law, now it's time to make some money because I don't understand the bailout to include my massive student debt. How much am I supposed to pay? We can also add on the mediocre salary I made while doing my clerkship in order to better learn the law.
Medieval guilds is the answer to the financial woes afflicting the legal industry.
As a follow up to law school debt, it's slightly ironic that we pay such huge amounts of money to learn the law, get good jobs, and then our law professors (on average) take that money and use it to support politicians who want to raise our taxes while we try to eliminate our debt. What a system.
1. Generally, first year associates at least know how to spell "discernible."
2. Any firm could enter the legal market, promise clients that it will always staff cases with the minimum number of quality attorneys for efficient resolution, and supposedly make beaucoup profits because of this huge market demand that these commentators claim exists. There are no structural barriers to entry for this kind of firm.
3. Because we have not seen this happen on any grand scale, I would suggest that the actual problem is that clients know part of the price of high quality legal service is the bundled expense of over-staffing/training younger associates. They see this as a better bargain than paying another firm that probably does not have much, if any, young talent and training to staff cases with fewer attorneys.
Very logical argument =
people hate parting with money
legal fees make people part with money
people hate legal fees
Wouldn't it be a lot simpler if instead of three years of Socratic method BS entry level attorneys spent 1 -2 years working for $50k as trainees rather than spending more to attend 2 more meaningless years of law school? Doc review etc. could be completed for much less and by the third year an associate who would otherwise be useless might be competent enough to handle certain "real lawyer" tasks. The only ones without risk are the law schools...endless lines of applicants, tenure, easy work schedule, no client pressure, pull in a few hundred grand plus benefits/pension and can make more $$$ writing/speaking.acting as of counsel etc. The whole set-up is a scam. Way too many new lawyers and the line between the best and the rest is skewed by so many varibales...one need only look at the Wolverine Scholar program or USNWR data/rankings to see waht a joke law is turning into.
Wouldn't it be a lot simpler if instead of three years of Socratic method BS entry level attorneys spent 1 -2 years working for $50k as trainees rather than spending more to attend 2 more meaningless years of law school? Doc review etc. could be completed for much less and by the third year an associate who would otherwise be useless might be competent enough to handle certain "real lawyer" tasks. The only ones without risk are the law schools...endless lines of applicants, tenure, easy work schedule, no client pressure, pull in a few hundred grand plus benefits/pension and can make more $$$ writing/speaking.acting as of counsel etc. The whole set-up is a scam. Way too many new lawyers and the line between the best and the rest is skewed by so many varibales...one need only look at the Wolverine Scholar program or USNWR data/rankings to see waht a joke law is turning into.
I don't believe for a second this is some client-proposed initiative: clients just want lower bills, period. This is some partner looking for an excuse to keep even a bigger piece of the pie for himself without reducing costs to clients one iota. How transparent.
Hell, if I weren't nearly $180k in law school debt and paying almost $1,500/mo. in student loans (for the next 10-15 years), I'd certainly be willing to be paid less for my work.
Imagine Holden Oliver's statement played on the evening news, and cut off before the last sentence:
"Hopefully, there's this silver lining in the Down Economy: a renewal of the notion that workplaces exist to serve and give value to Customers and Clients, and the companies organized to help them. Not to serve and cater to Employees. As we see it--and most states have traditionally seen it--it's a privilege to work. Not a right. "
Can you imagine the uproar?
How well would this go over: the assertion that the employer/employee relationship gives all rights to the employer and none to the employee? That it isn't a negotiated exchange between parties but a privilege generously bestowed? That unionization (along with its offspring, the five day workweek) was a decades-long misadventure, best forgotten?
Can someone please tell these people that skilled midlevel and senior associates are not created overnight? Clients are paying for a package--the midlevel/senior associate and the cost of his training when he was once as clueless as the new first-year. You can't have one without the other.
Imagine Holden Oliver's statement played on the evening news, and cut off before the last sentence:
"Hopefully, there's this silver lining in the Down Economy: a renewal of the notion that workplaces exist to serve and give value to Customers and Clients, and the companies organized to help them. Not to serve and cater to Employees. As we see it--and most states have traditionally seen it--it's a privilege to work. Not a right. "
Can you imagine the uproar?
How well would this go over: the assertion that the employer/employee relationship gives all rights to the employer and none to the employee? That it isn't a negotiated exchange between parties but a privilege generously bestowed? That unionization (along with its offspring, the five day workweek) was a decades-long misadventure, best forgotten?
Imagine Holden Oliver's statement played on the evening news, and cut off before the last sentence:
"Hopefully, there's this silver lining in the Down Economy: a renewal of the notion that workplaces exist to serve and give value to Customers and Clients, and the companies organized to help them. Not to serve and cater to Employees. As we see it--and most states have traditionally seen it--it's a privilege to work. Not a right. "
Can you imagine the uproar?
How well would this go over: the assertion that the employer/employee relationship gives all rights to the employer and none to the employee? That it isn't a negotiated exchange between parties but a privilege generously bestowed? That unionization (along with its offspring, the five day workweek) was a decades-long misadventure, best forgotten?
ATTTL
Greenfield is a fucktard. Associates add "nothing?" As Elie correctly points out, what biglaw partner, or for that matter, 20 year solo, wants to click, click, click his way through documents for 12 hours a day? And what educational value does that have, anyway? "Oh, thank you biglaw massa', for the wonderful gift of doc review! This 'training' shall serve me well when I depose a Fortune 500 CEO."
(sorry for the triple post of my Holden Oliver comment. website glitch made seem nothing was happening)
Speaking of associates getting back to work...I just started a few weeks ago and still have almost nothing to do, and neither do most of the new people in my department.
Is this normal for first year associates? A product of the down market? Just a normal slow time of year for legal work?
This story only applies to GULC associates. Everyone else is fine. Only GULCers have to pay their employers.
In lawschool I did a bunch of for-credit unpaid internships with government agencies relevant to my practice area. By the time I finished the bar and got to the firm, I hit the ground running and was an efficient biller with a bunch of contacts from my internships I could call for help and to grease the wheels for clients' projects pending at the agencies.
Law schools can require some amount of interning like this to help cross-train students. The ones who need it most are those who went straight through college and law school and who have never had an office job beforre.
In lawschool I did a bunch of for-credit unpaid internships with government agencies relevant to my practice area. By the time I finished the bar and got to the firm, I hit the ground running and was an efficient biller with a bunch of contacts from my internships I could call for help and to grease the wheels for clients' projects pending at the agencies.
Law schools can require some amount of interning like this to help cross-train students. The ones who need it most are those who went straight through college and law school and who have never had an office job beforre.
Greenfield is a moron. Try closing a finance deal, securities issuance or whatever with just partners and paralegals. Let's see how far that gets him.
Pay for the privilege of doing shit work. I love it. It's Friday and I have a mountain of stuff to do before I can get out of town for the weekend. The idea of paying to be doing it is ridiculous. Tell the partners on the golf course I'm not adding value.
This is all GULCs fault. If it wasn't for all of these sub par GULCers running around, clients would not be so suspect of billing practices.
GULC = final nail in the coffin of this once great empire
UVA2L
#35- Suck a dick. You can spell it either way. Google it.
Generally clients get what they ask for. Generally, they request that junior associates do the doc review and due diligence, because contract attorneys f*ck it up. But if they want contract attorneys, our firm will oblige. When a client has a less important case or deal, they generally hire a cheaper firm. The market generally works.
Further, if someone thinks junior associates are getting trained on the client's dime, they are dead wrong. Junior associates don't receive training. Period. After seven years of practicing in biglaw, we are less equipped to try a case or negotiate a deal than a lawyer who has practiced for 6 months in small law. We do the grunt work because they clients don't want it f*cked up, not because our firm is going us some kind of favor
#48 - it's totally normal to have no work (anywhere from 0 to 20 hours/week) for your first month or two at your firm. If you want to know whether you should be worried, look at how much the associates in class of 06 and 07 are billing. If rising second years barely have enough to do, they won't pass anything down to you, and senior associates and partners who already have relationships with them will give them their work, not you. In that case you would be f*d.
Two points:
Greenfield just doesn't get how client billing works. I am in-house counsel at a large company. I have routinely paid single law firm bills for more than $200,000. The legal market is competitive. However the bill is arrived at, clients agree to pay only what the market will bear for the job done. It doesn't matter if a bunch of the time is first years or partners. It's the total dollar figure that matters. How much of that gets paid is a function of market pressures. In different circumstances, there are different pressures on both sides. Some work could be done by a bunch of different lawyers and firms. The law firms know that and don't jack up the bill. If they do, I call and refuse to pay the full amount. For some work, there are only a handful of places I can go to get the job done (and sometimes some of them have a conflict). In those situations, I grudgingly pay very high bills that are full of junior associate time. That's the market. How the bill is broken down according to first year associate, senior associate or partner doesn't really matter.
Second point. Even if the market did demand some correction in billing, sticking it all to young lawyers is unfair. This BS proposal is another example of the baby-boom generation's greed and disregard for its duty to the generations that follow it. The law is (or at least during the formative years of baby-boom lawyers, was) a profession. We all know that law-school doesn't provide graduates with all of the knowledge and skills needed to practice law. That's why it's up to the previous generation to provide on the job training to new lawyers. Switching to a british style system now would allow the baby-boom generation to get the benefit of free training without the corresponding responsibility to pass it on (for free). The baby-boom generation has already made it tough on younger generations by strip mining our economy. Don't let them shirk this last responsibility they owe to the profession.
The proposal is impossible. Who is going to be the first firm not to pay their associates? No one would work there. The only way this gets implemented is by some sort of change in the law, or an antitrust violation by law firms.
Good post, #58.
@49 and 54 --
The contextless GULC bashing is soooo tired. Maybe time to switch back to your pirates/ninjas meme?
Only a pirate would continually bash GULC out of context.
GULC ninjas are worse than GULC pirates. Or maybe its the other way around. Maybe it depends on what context the GULC ninja is being described in. Anyway, I was always raised to never speak to strangers or GULC ninjas.
58,
You are 100% correct.
What kind of a Law Firm loves writing in Capital Letters to Excess? Someone trying to sound more Prestigious than they Are?
58 - excellent points.
16 - you are an ass clown. you would not survive in a classroom.
16 = racist GULC
I think this really comes down to an indictment of the billable hours system. As 59 notes, clients generally have a budget for services (which is not computed at an hour-by-hour rate) and are not focused on the breakdown of bills. Even so, one of the major irritants clients seem to be reacting to is the generally flat scale of billing rates that biglaw firms use. When a first year associate is billing at $350-400/hour and a senior partner bills at $1000/hr. there is a fundamental disconnect in the relative fee for services. This bizarre result arises from the desire to bring in revenue, without raising top rates above a level which creates further issues. A more rational billing system would have senior partners billing much more, and junior associates billing less. If this is politically untenable (because people would hate a $2500/hr. billing rate for a partner), the better solution is a flat fee. As clients seem not to like this, we are stuck with the same shitty situation.
65- but they forgot to switch all their Ss to Fs. That would truly show how prestigious they were.
58 -- right on everything, particularly the vile baby boomers.
On the GULC stuff ... it amazes me that law students, who must be in their mid-20s at least, still engage in rah-rah "ur skool sux" pep rally bullshit.
#68, it's all part of the pendulum swing. Clients start out with a flat fee, then they get paranoid the firms are reaping a windfall and so they request an itemized bill, then law firms demand more and more hours out of the associates, then clients get paranoid the associates are being intentionally inefficient, then clients demand a flat fee, and the circle starts all over.
In my experience, if 100 things need to be done in order to handle a given case well, then in a flat fee scenario, 80 things get done, and in an hourly billing scenario, 120 things get done. Neither is a conscious attempt to do more or less than necessary. But, in a flat fee scenario, there is a push not to do anything that's irrelevant, so things that are only potentially important don't get done. In an hourly billing scenario, there is a push to make sure every avenue is explored, and a few end up being dead-ends. The client should choose whether the case/deal is important enough to need 120 things done or whether 80 things will suffice.
#71 - That's possibly the most intelligent post I've ever seen on ATL.
I want associates to pay for the privelige of working at a law firm the moment I am made partner, and not a moment sooner.
Only 9 years to go.
58 here,
Very nice point, 73. As long as the baby-boomers don't get this windfall too. I'm OK with switching to the british apprentice system at a time that benefits the myspace generation (or whatever the hell your generation is called). (I'm gen-x.)
71, choice is good for clients, but you don't want to be the one flat fee matter in a billable hour world.
I heard that Davis Polk & Wardwell now have Free car rides home, free dinner/meals late nights and on weekends.
Is it true?????
I think the point is that a first year associate doesn't know his arm from his elbow and clients should not have to pay several hundred dollars an hour for said associate to learn how to do his job. With the billable pressure, senior attorneys are often unable to provide the kind of oversight and mentoring that is required to improve performance.
In the UK, solicitors and barristers do have an apprentice program following their law degree. The benefit is that junior folks learn the ropes without pressure. The downside is they pay for the privilege or get paid peanuts (not sure which) for that part of their "education." I'm not sure that would be such a bad thing for our profession.
There is an awful lot of nuance that goes with the practice of law, and younger practitioners aren't getting the benefit of the mentoring and training they need post-law school that they should.
No massive corporation should ever berate their outside council for inefficiencies. I used to work in a fortune 100 company (not in the legal department either). Now I work in a very large law firm. I can tell you from firsthand experience that the corporation was vastly more inefficient. I remember sitting in a meeting once where the CEO was answering employees questions about the future of our company and some guy stood up to ask a question. The guy announced his title before the question, something like "Senior Director of Educational Development and Resources." The CEO actually responded, "We have one of those." Corporations with tens of thousands of employees really do not need to look any further than inside their own doors to find all the inefficiencies they need to save some serious money.
Couple points - Agree with 58 on his points. Clients aren't paying a 1st year hundreds per hour because they think they're worth it. They're paying for the package of services that a large law firm provides. You can't just hire a firm and expect the senior partner to do all the work - they simply don't have the time.
As I've said before, this whole movement just smacks of unabashed greed. Even if you were successful in reducing associate salaries, some of that would be reflected in lower bills, but much would just be increased butter for the partners who already averaging paychecks in the millions of dollars. As much as law firms like to whine about associate salaries, there's still a ton of profit built into a junior associate's rate and that number has only continued to increase.
During the 90s and into the 2000s, there was a massive increase in producivity in law firms, mostly due to technology. It wasn't that long ago that a document had to run from a single location and markups Fedexed back and forth. That meant if you were working on a deal and missed the FedEx deadline (generally 9 pm), comments weren't going out that night. There were always workarounds (you had faxes, but they were horribly slow and of poor quality, you could drive out to the airport to meet the late, late FedEx deadline, etc.) but it was nothing like today, where a client can send you comments at 5 pm and expect you to send back a revised draft at 4 in the morning via email. So yeah, some of that efficiency has resulted in benefits to clients through better service, but most of the gains have simply been captured as profits by the firms (there's a reason most firms have seen PPP rise by annual double-digits amount for a while now).
44 is also right. There are a lot of stakeholders in a large organization, including equity owners, clients and, yes, employees. The pendulum is swinging more towards taking the needs of all stakeholders into account than away. Yes, the company may be owned by the equity owners, but that doesn't mean their interests are more important from a societal perspective than the needs of all employees (to speak nothing of the strange lumping of customers in with equity).
Moreover, his conceptualization of the employer-employee relationship is seriously skewed. Nobody is claiming that law student has the "right" to a job as an attorney. Subject to the obvious (and narrow) exceptions, firms can fire employees whenever they want, for any reason or no reason. Whining about the fact other students won't work for you if you engage in stealth layoffs is just whining about the market. Nobody set the market by fiat. It is what it is because that's how it developed and because law students are now getting more information, not because of some big-government knuckle-dragging full employment policy.
Further, nothing stops anyone from stepping out and offering lower wages to employees (or even forcing them to pay you). Here's a link to an ad from Craigslist for a legal job with no salary (but you get free furniture!): http://newyork.craigslist.org/mnh/lgl/850499631.html Now it's possible that's elaborate flame, but it seems more likely to me it's just another person who thinks like this guy that young lawyers should pay for the "privilege" of working. If you want to roll out with that, that's your choice. There's no shortage of lawyers out there who are desparate for work (and the number is increasing, not decreasing). Large firms hire top grads from good schools because they want talented, motivated people doing the work. If this was really as irrational as some people claim, I have to imagine there wouldn't be some big firm who was successful bringing in a bunch of kids from the bottom of their class at the Charleston School of Law and paying them $28.5 a year. The fact that there isn't speaks volumes. Now that doesn't mean there isn't a place for a rethinking of the law school curriculum, but any such change would have little to do with the relatively free market in which firms operate.
*end rant*
First, I don’t profess to know for certain whether these so-called "value movement" proponents are genuinely concerned about their clients, or are simply stodgy old partners who are sick of seeing their personal profits decreased by having to pay, what they perceive as worthless associates – though I suspect it’s the latter.
Regardless, of whether their message is one born out of genuine concern for clients, or out of a selfish concern for their own pocketbook, their naiveté of how a market works and what is likely good for clients in the long run is astounding – and very sad for their clients, who probably expect some degree of sophistication from the senior partner on their case.
As a brief aside, their manufactured outrage at the “lazy and entitled associates of this generation” is laughable and the equivalent of the “back in my day I walked 5 miles in the snow to school – uphill both ways” sorts of comments that those on the verge of senility often make to chastise ‘young whippersnappers’ for how much harder it was “back in the day.”
Back to the post, first, every service or product that we as consumers pay for has “training costs” built in. Your local Starbucks builds into each drink the cost of training new baristas, your financial planner builds into his yearly fee the costs of training new associates or analysts, your television includes built-in costs for training new factory workers. The point is, acting like passing the costs of training partially off onto clients is something unique to the legal world is simply not true – it happen in every business, and the customer is better of for it. We get better coffee, financial planning, televisions - you name it because companies invest money training their employees. And where does the money for that training come from? Not out of the ether, and certainly not out of the CEO, CFO, or COO’s (partners?) paychecks, it’s built into the cost of the products and services you and I buy.
Please, please, please stop acting like the current state of the legal profession is some sort of an aberration. It’s the way every business operates. The only difference is that law firms are more transparent because they engage in hourly billing – thereby making the built in training costs more obvious.
Second, sophisticated clients, I assume, understand that although the work done by a junior associate could be done more efficiently by a senior associate or partner, even if a project takes a junior associate 2 hours when it would take a senior associate 1.5 hours or a partner an hour it is still, from a cost-effective standpoint, cheaper if the junior associate is used – at least at the average billing rates that I am aware of.
Third, sophisticated clients (like the banks, accounting firms, and Fortune 500 companies my firm serves), take a long-term view regarding associate compensation and efficiency. They may overpay for first and second year associates (although the market appears to suggest not), but they want these junior associates to become senior associates and eventually partners who will provide top-notch services 5, 10, or 15+ years into the future. Removing economic incentives for these junior associates (many of who have six figures of debt) would likely cause a mass-exodus to hedge funds, I-banks (or i-banking arms of bank holding cos.), etc. This might make some clients happy this year and next, but 10 years down the road, when there are not enough highly talented and motivated senior level attorneys they will be paying far more than they are paying now for these attorneys’ services (this is simple supply and demand…if you cut the number of qualified junior associates now, you will reduce the number of senior associates and junior partners in the future, thus, those who stick it out will be able to charge MUCH more than they do today because their skills will be that much more in demand). This will result in fee shifting (more fees coming from senior associates), but does not save the client anything in the long run; it just reduces the pool of quality attorneys down the road.
Thus, at least in my opinion, these “value movement” proponents seem to care less about clients (at least in the long run) and more about vilifying associates at big law firms – I will echo other posters in noting the irony that the majority of those calling for “reform” are not partners in big law firms, who understand the subtleties of such a proposal, but partners in small law firms – who are perhaps bitter that associates in big law firms are making more than they did/do? Just a thought.
There’s no need to address the point about associates costing the firms in which they work more than they are worth. I can guarantee that the 2200 hours I bill will help, rather than hurt my firm’s bottom line.
It's humorous for Holden to say that it is a "privilege" to work. I may be wrong, but I think that we still live in a market based economy (at least for now). Also, I'm not sure what the states that Holden refers to that have seen work as a privilege. I think more often than not work has been viewed as a necessity.
It's a privilege to work... hmm....
I feel blessed to have a good job in a rough economy. But I certainly don't think that my law firm and the clients it serves are somehow doing me a favor - why would they as self-interested actors?
Holden, the way the job market works (at least outside of the fairy-land you apparently live in) is that my employer has a need and I have a skill set (or at least the foundation upon which to build that skill set) that fills that need. And I have a need - money so I can pay my mortgage, my loans, and put food on the table - and my employer can fill that need with a paycheck.
We then enter into some level of arms-length negotiation, governed by market forces to decide how much the firm is willing to pay for my skill set, and how many hours of my life I am willing to trade for that compensation.
After we reach an agreement I work and they pay - at least until I decide that my skills are worth more than they are paying (I quit) or they decide that my skills are worth less than they are paying me (I get fired).
"Privilege" and "right" never come into the equation!