This is common sense. Charging clients for the work of first years is a total racket. The first years offer little to no value to the client, whatsoever. Why should clients have to pay for a firm's education of it's personnel?

is this why latham ny laid off more than half the 1st year class?

FIRST to flag a typo: "comes the clients of "??

2: This is nonsense. We charge for paralegal time, and even for word processing time. The problem is not that we charge them for 1st yr time, it is that we charge them $350/hr for it. That is practically double what we charged when I was a first year 10 years ago.

This is common sense. Charging clients for the work of first years is a total racket. The first years offer little to no value to the client, whatsoever. Why should clients have to pay for a firm's education of it's personnel?

i think i may just return my severance and start a blog trashing my former v10 that laid off masses of 1st years. i keep hearing juicy gossip that yearns to be published.

at kinky spalding this may not happen if the 1st year is willing to have sex with the client - in which case, the associate may be immediately promoted to partnership

im sorry - but first years can edit, proofread, and do research. if they don't get to do anything as first years, how will they know how to do anything as second years? firms do have to hire new talent at some point, don't they? or will the legal profession just die off b/c no one is willing to train new lawyers from now on?

Foolish clients. The meat of a tender young first year is the most delicious, and a premium should be paid for it.

5- Point well taken. However, the clients wouldn't object if firms charged rates for 1st/2nd years that were appropriate to their (nonexistent) knowledge and legal skills. I think this was implied by my comment. Obviously the clients should be charged something for their services, just not very much.

-2

NOBODY CARES - TAKE A $40K JOB LIKE OTHER AMERICANS DREAM OF.

50 MILLION AMERICANS ARE LIVING IN CARS, ON FOODSTAMPS, IN TENT CITIES OR ON THE STREET.

NOBODY CARES THAT DOUCHEBAG LAWYERS CAN'T MAKE $160K.

N

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A-HOLES

This is evidence of Morgan Lewis's crumbling, not BigLaw's. Do you think Cravath's or Williams & Connolly's clients micromanage how the firm allocates work? Morgan's clients must be real TTT -- "banning" 1st years from matters is equivalent to me telling GM that I only want certain people on the assembly line making my car. Who gives a damn how the work is allocated as long as I get the final product at a certain price?

Morgan's clients should just change firms if they're not happy with what they're getting, rather than tell the firm how to manage itself. The fact that Morgan tolerates that suggests that they're pretty desperate.

This guy is pathetic. It's "not healthy" for a lawyer to have free time?? You know what would make me even more unhappy than not being busy? Not having a pay check or health insurance.

Why can't he just tell the truth, that they don't want to pay people if they don't have work for them. It's not unreasonable. Instead he comes off like a humongous douche.

@2,

Wake up and smell the coffee. Charging clients hundreds of dollars an hour for ANY lawyer's work is ridiculous. Lawyers are too expensive, because they are too inefficient.

Instead of fancy marble-decked midtown offices with cherry and oak furnishings and pop art, we should be working out of cubicles in suburban office parks. We should not have such high rents, law school tuitions, taxes, and other things that needlessly require us to jack up billing rates. And partners should not be making 7 figure incomes for doing what is essentially commodity work.

Cut the waste out of the system and there will still be an oversupply of good lawyers willing to work for low to mid 6 figures -- more than enough to do all the work of Corporate America.

The clients need to boycott biglaw, and hire the talent they need directly. Oops, but then the GCs wont have the CYA letter they get when they retain Skadden, et al.

What Milone fails to recognize is the ability of 1st years to relate to clients. We're hip to the modern culture, we know how to Twitter, we can use slang. 1st years command their income because of the injection of vigor and zest they provide to client relationships and office culture and atmosphere.

13 -- do you happen to have a book of business of your own and regularly partake in the ancillary outcome vs. value discussions?

12 - I understand living in a car or a tent city, but how in the world can an average adult manage to live on a food stamp?

Also, there might be a problem with your keyboard. The caps lock key seems to stuck, and you have some irregular spacing in your comment.

Morgan's approach (if widely adopted, which I'm sure it won't be) presents an interesting problem. Where are all of the talented 1st years they would normally hire going to work to get the needed experience to be hired when Morgan needs them as 2nd years, 3rd years, etc.? Not too many jobs, if any, provide training in large, complex litigation/deals to new lawyers. Where will Morgan get its mid-level associates?

13: The answer is yes. Of course, in fact it is even worse with "prestige" clients that you want to keep happy. That is why Cravath was 50% off budget last year.

11: The dumb thing is, firms really don't make a ton of money off 1st years anyway. The midlevels billing 200 hrs a month at $450/hr are the real profit engines. This is another example of we lawyers being dumb business people.

Well Mr. Philadelphia Guido Dumbass of the Law...why don't you just not BILL 1st years while they are learning? They become 2nd years in, oh...12 months!

Actually 15, but...the main thing I wanted to say was that Elie making fun of this guy's "most of many of" gaffe is a cavalcade of hypocrisy akin to him making fun of another dude for being fat.

This story was linked in the comments section over a week ago. Way to be on the ball.

@9

In fact, you are incorrect. Firms to not have to constantly hire new talent. There is plenty of "old talent" available in the pool, but no firm wants to have 50-year old associates. It's the inefficiency of discrimination.

They would rather have young, snappy-looking associates than older, capable ones.

It's Kinky & Bogusdick............I saw it on another thread.

16-That was funny. You are joking...right?

Well Mr. Philadelphia Guido Dumbass of the Law...why don't you just not BILL 1st years while they are learning? They become 2nd years in, oh...12 months!

Actually 15, but...the main thing I wanted to say was that Elie making fun of this guy's "most of many of" gaffe is a cavalcade of hypocrisy akin to him making fun of another dude for being fat.

MORGAN'S CLIENTS ARE OFFICIALLY RETARDED. If partners can't delegate to 1st years, then THEY will have to do more work themselves. And the oppty cost of doing so would cause partners to raise THEIR rates. So it would be at least a wash, if not worse, for the client.

These clients need to take a an econ course. It's called the theory of comparative advantage. Even if Rodge Cohen were the BEST, most efficient typist in the world, should s&c client's insist that HE, rather than a secretary, type all the letters? Rodge would do it, but you better believe he'd charge $1000/hr to type letters -- ie, what he's forgoing by typing letters.

"Because the firm culture is better when you fire 55 attorneys and 161 staff during the worst economy since the Great Depression as opposed to taking a hit to profits per partner? My brain hurts."

This was LATHAM'S reasoning. My life is NOT any better now that I'm unemployed because I was dumb enough to rely on them during OCI.

FUCK YOU Latham.

Focusing on first-year associates is ridiculously arbitrary. I added more value as a first year than some lawyers will ever be able to add, and if I'm an exception I'm far from the only one. First years may not be as efficient as a general matter, but that's why their time costs less than second-years', whose time costs less than third-years', etc. Ridiculous. Firms should continue to use first-years as before and just have second-years bill the time if that will make clients feel better; the first-years can be credited with the hours as an internal matter.

Good thing lawyers magically figure everything out when they become second years, otherwise clients would still be getting ripped off!

19, they hire the associates who worked for a lower billable rate and for a lower salary, presumably sometimes from a smaller firm.

You know, a world where people's salaries start out low and go up as they get older, instead of peaking for eight years and then dropping in half as they leave. A world where people don't expect to start out in the top 5% of US households and to pay back their loans in 5 years. Kinda like how the rest of the world works.

Milone's comments are indeed disingenuous. The problem with billings by first and second years doesn't involve their ability as much as it does the relative significance/value of the doc review and other grunt work to which they're typically assigned by Milone and his compatriots at large firms.

Morgan's problem is that they hired a bunch of dead weight from TTThelen.

12,
You shouldn't bite the hand that feeds you as you are undoubtedly a disgruntled biglaw staff member using the Firm's computer to make your comment, you miserable ignoramus.

13 - I hope the next time you need emergency surgery, you to got a top hospital, pay top dollar, and the surgery is performed by a 3rd year medical student.

After all, new doctors need to be trained too.

Client: I want lower bills.
Milone: Alright, we'll shift all of our work to 1st years so you get lower rates.
Client: No, I want all my matters handled by more senior associates.
Milone: But you said you wanted lower bills?
Client: That's right. Make it happen, I don't care how.
Milone: ?
Milone and Client PROFIT

20 -- so do GM's "prestige" clients (eg, companies that buy bulk fleet vehicles) dictate to GM how much they pay the dude on assembly line #3? What's the difference?

And if you think for a minute that clients in need of unique, high-risk work are somehow dictating to firms the details of staffing, you're crazy. Do you think Ted Stevens got into discussions w/ w&c about who they staffed? Or that IBM lectures to Cravath on which 1st year is on that big antitrust investigation? Or that Wachtell's clients doing that multi-billion dollar takeover tell the firm who to staff? No -- that's the LEAST of their concerns and is the difference b/w firms that handle the most important matters, and firms like Morgan that do commodity crap work.

I blame the clients for being too stupid to hire and train their own in-house lawyers.

Do the math. 160k for an in-house counsel gets you about 2000 hours of attorney work. $160k of associate time gets you 400 hours of attorney work. It's grossly inefficient to hire outside counsel.

27's argument is fundamentally flawed. I've worked with Rodge -- he's not a particularly good typist. It's silly to assume that legal acumen and typing are related.

at kinky spalding this may not happen if the 1st year is willing to have sex with the client - in which case, the associate may be immediately promoted to partnership

Rackin frackin srackin dumb 1st years. At my firm we make em wear the tightest most scrotum killingest pants around. Back off 1st years. When 1st years come to Texas, the yankees get teabagged.

I agree with number 5. While the law firm rate structure has increased over time, it has flattened significantly. It is absurd that a senior partner bills at $950/hour and that a first-year bills at $400. When I started (a little after number 5) my billing rate was around $200 (and the partners still billed at around $1000). I understand the resistance of clients to higher rates for senior attorneys, but isn't that the implication of "value"? If the real "value" of a senior partner is $3,000/hour he can either collect it as such or via leverage.

35, potentially-attractive analogy, but first-year associates don't perform the legal equivalent of surgery for important clients.

Of course clients want a discount. But they don't care who pays it. And it's ridiculous to assume that first year billables are directly related to first year pay. If they were, first years would be paid more at my firm.

"...Why do they need to downsize? ... It is not healthy for a lawyer to not be busy, to have free time on his or her hands. You don't grow, you don't develop, you're not happy."

Watch out ML first years and incoming classes, looks like ML is about to improve your health...

Elie, etc al...

The reason that a firm's "culture" is better if you lay people off than if you keep them around with nothing to do, is that BigLaw is basically a ratrace.

Ten years ago, everybody knew this and accepted it. When you went the BigLaw route as a law school graduate, you were making a deal with the devil, and you had to be okay with that.

The idea was for you to work on really "interesting" stuff that had unparalled room for "development" and that paid you a ton of money. But in exchange, you had to be willing to work literally to death for it. You were on-call 24 hours a day, expected to work nights and weekends on issues both mundane and trivial.

For several years now, however, that whole model has been failing. The decline began well before the current "recession." Graduates of the last ten years now care about things like "work life balance" and "quality of life." There are more female associates, more married associates, and so on.

As a result, firms have seen average billable-hours-per-associate go down every year, not just in the last year or 18 months. And the dropoff, in some areas, has been steep.

For years this made distinguishing between "good" and "bad" associates as easy as looking at a monthly report. Since no junior associate ever brings "value" to the client, the only necessary evaluation tool was asking whether they had fully and truly made the BigLaw commitment. If they were billing 2400+ hours, you had a good associate. If they were constantly wining about being busy, but only billed 1800-2000 hours, they weren't made of the right stuff.

Now, however, the BigLaw model (already in peril because of associates who want to bill 2000 hours and not an hour more) is broken because it is impossible to tell the difference between a good and bad associate in this way.

Associates who are perfectly willing to work 2700 hours only have 1700 hours worth of stuff to do. And associates who would never bill more than 1800 hours even if work were pouring in around them less just like everybody else.

The result is that firms, frankly, have no idea what to do. Some are accepting the impossibility of the position in the short-term, and keeping as many people as they can. Once the recovery happens, and work comes pouring in, the wheat will easily separate itself from the chaff once more, and these firms will then dump associates in true performance-based cuts.

Other firms are trying to continue to differentiate amongst these associates on some other non-hours basis (with variable levels of success). And still other firms are setting themselves up for pure failure by cutting salaries and other benefits, moves that are certain to drive away top performers once the economy turns and the lateral market unfreezes.

Firms are only trying to make the legal market (within their office) look the same as it did 10 years ago.

10 for the comment of the year.

37, GM's clients don't pay per hour for the GM workers' hours. They pay per car, and they surely dictate which cars they want and at what price. They also negotiate huge discounts and concessions.

A law firm's clients pay per billable hour, and surprise surprise the clients dictate what types of hours they want and at what price.

Drawing the correct analogies is a useful skill when you take the LSAT next year.

You also obviously don't know how much pushback on bills there is from clients even at the "prestigious" firms. Hint: most partners have to ask permission from the client before adding associates to the matter.

38, your comparison makes sense only if there are a constant ____ hours of attorney time needed in a year. in-house counsel is a sunk cost; that $160k is going out the door no matter how much work the lawyer does. outside counsel are paid only for work they do.

46, "work literally to death"? I thought one had only figuratively to work to death; I had no idea the stakes were that high.

Claims of Latham NY laying off half its first years are outright false.

Anyone want to rate this guy on RateAPartner?

http://www.rateapartner.com/

Wow, this managing partner is frank!!! For all of the bad press some law firms have been getting, I don't think any is worse that what this dude is voluntarily airing out. Sorry first years, frankly, you are a lost cause.

The Obama administration objects to your use of the phrase "War on first years" and asks that you refrain from using it and instead use the term "Local Contingency Displacement Action"

Thank you in advance for your cooperation.

I agree with number 5. While the law firm rate structure has increased over time, it has flattened significantly. It is absurd that a senior partner bills at $950/hour and that a first-year bills at $400. When I started (a little after number 5) my billing rate was around $200 (and the partners still billed at around $1000). I understand the resistance of clients to higher rates for senior attorneys, but isn't that the implication of "value"? If the real "value" of a senior partner is $3,000/hour he can either collect it as such or via leverage.

For someone who makes fun of the Tea Party crowd, Elie Mystal does populist outrage just as well as the best of them.

Kudos to M&L's clients for putting their foot down. And 5 is correct; I don't care if you train your noobs on my dime, but it $300/hr is absurd.

Lawyers are assholes. Time for lunch-drunk, which is my new favorite kind of drunk.

Let me know when the gun put to this ahole's head back in 2007 to raise salaries is found.

46: Lots of words that essentially say that associates have held the power during the boom because of the obscene attrition rate. Firms were forced to overhire and overpay to make sure there were qualified lawyers going through the system. Now that the market for qualified lawyers is flooded, and the attrition rate is back down to the low single digits, the firms have to rethink pay and hiring to make sense for the current market.

37: We are lawyers, not an assembly line workers. And if you think Cravath isn't feeling pressure from clients, then why do you think Chesler called for alternative billing systems?

The ship be sinking...

for rookies.

36: you hit it on the head.

We want to pay lower rates, so have 3rd and 4th years working on it!!
What bullshit by a POS partner who wants to cut salaries on the back of debt-burdened first years to keep his fatass pay check intact.

Don't worry guys, everything will be all better once Obama raises taxes on law firm partners. When they see their paychecks getting smaller, they will decide to pay more in salaries to associates.
It makes perfect sense, see.

Yes We Can!

What's the deal with all of the Latham hate in posts that have nothing to do with Latham?

63, a post titled WAR ON FIRST YEARS has EVERYTHING to do with LATHAM

"Its more subtle and, frankly, more sophisticated, than that. They're not just saying, "We want a discount." In fact, most of them, not most of them, many of them are now saying, "Discounts are not the answer." They want a higher correlation, frankly, between the value and the cost."

What kind of bullshit is that?

He acknowledges that many of the clients don't value the firm's services as highly as the rates it charges, and he says that the clients are not seeking a discount.

That leads to the unavoidable conclusion that those clients find the firm's work product lacking in some manner. Probably not the best idea to advertise that many of your clients find your work to be sub-par and then blame it on the industry.

51 is right. Latham laid-off MORE than half of the first year class in NY.

Get it right people.

As an in house counsel, do you know what pisses me off more than having first years work on my matters? Partners doing the work that a first year should be doing, and charging me partner rates instead of first year rates. All clients care about are whether the work is being appropriately valued.

63, "Lathaming" refers to laying off your first year class, as Latham did.

LOL, 29. You are both extremely egotistical and apparently unaware of what fraud is. You deserve to be canned.

This settles it: Class of 2009 is the Lost Generation. They were defered, and now they won't start, or, if they do, they will have their pay cut or be fired shortly thereafter because nobody will pay for them.

48 -- take an econ or business course or some freakin thing, b/c you're only embarrassing the profession and underscoring how lawyers are so business and economically illiterate.

You can call the billing structure whatever you want -- per hour, fixed, a hybrid model, etc -- but they're functionally equivalent and only allocate risk differently. When Hertz buys a fleet from GM, they absolutely are paying that assembly line worker per an hour. If it took the line worker 2 hours to install the brakes at $x per hour, the price (at least in the medium term) will be different than if it takes him 4 hours to install the brakes at $y per hour. It's called productivity, and labor productivity is reflected in the final price. What do you think -- GM pulls their prices out of its butt? The prices are based on the HOURLY wage they pay to employees.

So, again, why doesn't Hertz dictate to GM who they put on the assembly line? Presumably, Hertz could really get a deal if it convinced GM to substitute for seemingly more productive labor (eg, by insisting that the 30-year veteran work on the line b/c he's more "experienced.") The answer: b/c Hertz is run by people who have a basic understanding of business and economics, unlike people in law firms and GC offices. And they know that (1) it's stupid to micromanage their suppliers, and (2) the law of comparative advantage means that forcing the 30-year veteran to install brakes is not really cheaper b/c you have to pay him his oppty cost.

I don't have time to explain economics to you. You're a shining example of why the legal industry is in such trouble. Go take a course at community college or something, since you're probably only billing 1500 hrs this year anyway, and make up for that BA in English.

First years will continued to be trained at biglaw but only when their rates and their salaries are slashed. And 61, I have no sympathy for "debt-burdened first years", who should have done their due diligence before sinking tens of thousands into law school. They essentially have made a bet in the legal labor market (too many sellers, not enough buyers = sinking price i.e. salary) and lost.

The problem with this guy's argument: if a first year doesn't do the work, a 3rd year will do it. The 3rd year will bill the same work at 3x the amount.

Clients don't pay the first years for their training - partners do.

I'm thinking its time to drop 1st yr pay to 110k. There is no other alternative.

BTW @ 12 = disgruntled 50 yr old paralegal or EA that still makes 40k after 30 years of service. Thats what you get for going to WYO-tech for your degree.

Don't hate the players, hate the game.

RACE WAAAAARRRRR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Frankly, I think the guy needs to expand his vocabulary...frankly.

If you can't afford to pay for first-year level work, like document review, you can't afford the higher-end firms. Period. Go somewhere cheaper.

I remember this nonsense when I was in BIGLAW. What often ended up happening was senior associates would give far-too-junior associates the work they didn't want to deal with in an essentially sink-or-swim fashion (until the end of the year when, of course, the senior associates were sending their own faxes and making their own copies to hit their bonus numbers). Junior associates ended up spinning their wheels and wasting time and the time ended up getting written off (clients do know that happens, right?). Junior associates often take a long time to do things and do them poorly because lawyers are notoriously bad at managing them. Oh, and because of the built-in incentive to overbill, of course.

I'm at a small firm now and the managing partner would laugh in a client's face if a client demanded that no first-years work on his or her matter.

It is time for US firms to adopt the Belgian model: First 3 associate years effectively are an unpaid apprenticeship (modest stipend to cover bare bones living expenses). Years 4 and 5: 100% compensation is performance-based. Thereafter, you are partner or gone.

Belgian Waffles for All!

As a labor and employment attorney, here is some advice. If your employer tries to fire you, reject their offer. In order for your employer to fire you, there needs to be an offer and an acceptance. If you don't accept their offer, they can't fire you.

78: That is how it was in the US 100 years ago. Before law schools, potential lawyers would actually pay the experienced lawyer for the 3-7 year apprenticeship.

63, it is because Latham is the new Shearman. Every time we see anything about associates getting screwed, we'll remember Latham, just like we remember how Shearman screwed its associates in 2001. It's a Pavlovian response now.

Enjoy!

An asslobster says what?

As an incoming first year, I would gladly take less money. I have no problem with that. Partners at firms, that are now complaining, are the ones that let this get out of control--have the balls, slash salaries and lets get back to rebuilding.

16 = Ryan from The Office.

71, GM's clients dictate what they are willing to pay for, i.e., cars. A law firm's clients dictate what they are willing to pay for, i.e., hours of associates. GM's clients don't dictate the hours of GM's workers, because they have already expressed what they are willing to pay for, and they don't need to duplicate their efforts. A law firm's clients don't have such a proxy, except when they use flat-fee arrangements. In flat-fee arrangements, the clients don't dictate what the firm's employees should do, just like GM's clients.

It's very simple really. When you pay for a product, you bargain for the price and quality of the product, even if it has a labor component built-in. When you pay for a service, you bargain for the price and quality of the service. If you still don't understand, just read those two sentences again. In short, you are a Special Olympics retard.

Just thinking out loud here guys, but should these first years be thinking about a claim against the clients on a theory of reliance -- ie, promise or estoppel? Doesn't Restatement 90 cover this exact situation?

Hard times at ATL? Reporting week old stories that contain nothing new and using actual news outlets as your source?

All of this just demonstrates the problem with the billable hour. Clients should pay for the final product, and law firms should adjust as needed to produce the final product they want at competitive prices. This might mean rewarding some associates who may not bill so many hours but are able to work more efficiently - meaning rewarding output rather than input. That might zap some of the "superstars" who can really score well on law school exams but are pretty incompetent in managing things in real life.

Why should firms not charge for first years?? We are lawyers too - listen you partners out there you went through the same process and grind and were first years too some time - so don't you disown us... our time will come

62 nailed it.

71 = not just a douche, but an epic fail douche.
When you pay for something, you get to specify the type of that something that you want. Car buyers specify what types of cars they want at what price. Billable-hour payors specify what types of billable hours they want at what price.

78,

You've said this in other threads. Others have asked you in other threads how much it costs to go to school in Belgium. Probably not $150k.

If firms want new lawyers from top schools to work for nothing, then something has to be done about law school tuition. I know that I wouldn't have taken on tens of thousands in debt to work for a bare bones stipend for three years.

Associate compensation isn't the main problem -- it's senior partner compensation. They could drop billing rates without cutting associate comp if they only cut the compensation of guys like Milone, who probably makes $3M a year, but has no clients and bills no hours. Morgan has a bunch of those "management" partners. Have any of them taken a pay cut in response to the economic situation? Not a chance.

71 -- EPIC FAIL. Not only are you comparing apples and oranges, but you're being an insufferable douchebag in doing so.

The biggest mistake in your analogy is that you don't take into account the value premium of work being performed by senior attorneys vs. 1st years.

In your example, what Hertz gets at the end of the line is the exact product that was purchased and expected. I agree that whether an experienced or inexperienced worker was on a line is not a concern for Hertz -- they get what they wanted at the price that was agreed upon. Sure, an "experienced" line would be faster and more expensive while an "inexperienced" line would be slower and less expensive -- but Hertz could not care less as long as the financials and quality are in line with their request.

In a law firm, the work product expected by the client cannot be obtained from 1st years. You can take as many hours from a 1st year as you possibly can, but I assure you that the work product still won't be anywhere close to a partner's work-product which could have been achieved faster and, thus, more efficiently. And that's partner-level work product which is expected, not 1st-year work product coming from lawyers who simply don't have the skill set to achieve what is demanded by the client.

When a client says that it wants an outcome in line with value, that definitely hints as to who is staffed on their matters and for how much. Reading your posts, it's obvious you don't have any book of business allowing you to partake in billing discussions, but 101 Partnership Skills will let you know that staffing is ALWAYS discussed with clients for this purpose, including prestige clients.

48 is absolutely right in his criticism.

BIG LAW WILL PERISH LETS START A COUNTDOWN...

Elie;

way to get off the couch and write about a story that happened awhile ago. While you are at it, breaking news: thelen is dissolving. there, i gave you your next article.

http://www.bizjournals.com/sacramento/stories/2008/10/27/daily33.html

This comment will be buried and won't matter to many but: Instead of eating each other, why aren't we focusing on the fact that Profits Per Partner seem to be the only thing being protected in a lot of these moves? I'm sorry but I don't really have any sympathy for the bigshots in the corner offices having to drop down from 2.2 million to a meager 1.8 for a a year or two if it meant not gutting my entire firm.

LET'S TALK ABOUT THAT for once instead of getting into these pissing matches that usually boil down to 'my firm's milkshake brings all the associates to the yard, and they're like.. it's better than yours' bullshit...

I agree with number 5. While the law firm rate structure has increased over time, it has flattened significantly. It is absurd that a senior partner bills at $950/hour and that a first-year bills at $400. When I started (a little after number 5) my billing rate was around $200 (and the partners still billed at around $1000). I understand the resistance of clients to higher rates for senior attorneys, but isn't that the implication of "value"? If the real "value" of a senior partner is $3,000/hour he can either collect it as such or via leverage.

"If they were billing 2400+ hours, you had a good associate. If they were constantly w[h]ining about being busy, but only billed 1800-2000 hours, they weren't made of the right stuff."

That's exactly right. I came up through the ranks at Biglaw during the 1999-2001 boom, when there was so much work to do you could be billing 2600 your first year right out of the gate. Senior associates would counsel us on how to keep overnight kits in the office, where to store a cot, eat light so you don't run against a wall the second day of an allnighter, etc. Then came the axeman in 2002 after the dotcom crash and 9/11 combined.

How did the firms pick the survivors? It was as simple as looking at a balance sheet. It didn't matter if you were good or bad, litigation or corporate. Because if you're a litigation associate at Biglaw, you're not the go-to person for the client in front of the judge anyway. If you're corporate, you might get more face time with the client, but you're simply pushing a transaction along--the client just cares that the deal is closed and on time, you can't screw that up and if you do you're fired anyway. But there is no better way to demonstrate "excellence" to the Firm than in terms of your hours. In the end that trumps all, by far.

As the poster above noted, that system breaks down when hours are low. In the old days, before I started, some of the old GPs told me how it used to be, how GPs had an almost paternal instinct towards the GAs. It was a profession first, and there were rules of conduct. Firms grew very selectively and when a firm grew it constantly considered very long-term business considerations. During bad times, there was plenty of cusion, everyone shared the pain, GPs didn't jump ship when PPPs went down because they had a stake in the partnership and the partnership had a stake in them.

So this is where we are now. GPs demand to make $2 million or else they take their book and go somewhere else, so Firms need to be brutal. The Firms need to grow aggressively any time they can, because you can't tell a busy GP there is no capacity to do his work because everyone's too busy. He'll go somewhere else where he gets "support". The pyramid structure must also be maintained since that is the best way to boost PPP (hourly rates are market determined), and it must be ever-steeper or else the GP will go somewhere else where he can eat more of what he kills.

So you over-hire in the lower ranks. On purpose. Knowing you can't possibly support a fraction of that number should they all choose to stay 9 years. So you make it utterly miserable for them--that makes them bill more, gets rid of low billers by themselves, and then some time between year 4 and year 8 you give them the "handwriting on the wall".

That's if you want to be merciful to them. If you're not and you need them too much to let them go, you encourage them to bill even more and exhaust themselves and families all the way until they are "up" for GP. Then you tell them you really fought for them, but ExCom are a bunch of jerks and also the practice he's in simply can't support another GP. Sorry. It's just a timing thing. Meanwhile every year you play musical chairs with the GAs; you yank out a few chairs every year, winnowing that horde of GAs.

So what do you do when there's a recession and the workflow itself collapses? Well, you have to brutally trim the ranks even more, otherwise PPPs are hurt and GPs go where they will get more "support". Do you feel sorry for the GAs? Heck no. You're paying them $160,000 right out of school. Because you're paying them so well, you owe them nothing. You don't worry about how they will pay their student bills. You don't worry about their career, sense of humiliation or what is going to happen to them. You sleep better at night. Because you're paying them $160,000 right out of school. We're all grownups here, after all. If you don't like it, you shoulda gone into something else kiddo.

Marcus Aemilius Lepidus

as a midlevel associate with too much work, I don't want first year associates on my cases either - they're worthless.

98--your argument is implicit in Elie's fulminating.

101 - just a few years back (not so long ago) you were a mere 1st year too completely useless - look how powerful you have become now - so they are not so worthless - what you can do they can do too - dont you ever forget that

Philly in da house today!

Philly in da house today!

98, would you take a ~20% pay cut to $125k so your firm could keep its lower-level workers (e.g., staff) around?
Yeah, thought so.

100 I was going to skip your post because it is so long but it is actually a very good summary of the law firm bubble that is now popping and should be required reading for anyone thinking about going to law school.

100 I was going to skip your post because it is so long but it is actually a very good summary of the law firm bubble that is now popping and should be required reading for anyone thinking about going to law school.

73: Third years do not bill at a rate anywhere near triple that of a first year. Your argument, and your intelligence, both FAIL.

101 - - you are probably some shit midlevel at a shit firm.

106 there is a huge difference between someone just starting out in his career with huge debt taking a hit from 160k to 125k and someone who has been making millions of dollars a year for a long time taking a hit of 100k or 200k for a year or two. The lower income for the partner is negligible, especially after taxes.

100 - Even I can see that your post was excellent.

"That's alright --this thing's gotta happen every five years or so -- ten years -- helps to get rid of the bad blood."

113 -- superb GF reference. Well-played, sir.

This is just another cry for law schools to stop playing games and start educating people. If firms have to train new attorneys (and they do) what the hell is the purpose of law schools?

What's the backlash against juniors about? You all realize that work done by big firms require a lot of doc review and diligence right? There is no way to get around it (except for the silly idea of outsourcing to India). That is the cost of doing business for the clients. Who else is going to do it? If the solution is to have juniors bill out at $150-200 an hour and only bill out much higher say after 4th year, let the market work that out. But clients can't demand they don't want first years on a deal when in 90% of the circumstances, there is a bulk of work that should only be done by 1st or 2nd years. Obviously if it is for routine client counseling or drafting, that is a reasonable request, to an extent. But depending on workload, timing and what's on a mid-level's plate, the mid-level has to pass it to a junior. The market is much slower, but it doesn't mean some folks with the experience clients are seeking are not fully utilized and can't turn to every matter.

Wow - that interview with the Morgan Lewis partner only confirms the theorem that the number of times one says "frankly" is directly correlated with the amount of BS you're shoveling.

"[Clients] want a higher correlation, frankly, between the value and the cost. . .Sure, every business is under pressure to cut costs. . .But they're a lot more, frankly, sophisticated than simply saying, "We want more for less.""

The definition of "cutting costs" is getting more for less. Stop with the sophistry and just admit that clients won't pay as much. Oh, wait, that would entail admitting that your clients want to pay less for the gold-plated legal work offered by the partners at [whatever firm].

Also, I'm sick of hearing this canard of "why should we [client] pay for you [firm] to train lawyers?" Fine, why should the consumer pay for your R&D? Why should the consumer pay for your headquarters building or support staff, or for the MBAs of your executive team? When you buy something, you have to pay enough for the seller to cover ALL of the costs of providing that thing. Or it won't be provided.

The lengths to which clients and law firms will go to avoid saying the obvious are pretty amusing. This whole economic situation is not hard to understand. Everyone with power is using it to force concessions from the counterparties to whatever business they are in. Clients are using it as an excuse to try to force price concessions out of their service providers. Partners are using it to tilt the balance further against associates, after being angry for 3 years that they have to pay $160,000 to get the kind of lawyers they want/need to be able to market themselves as "elite" to the clients they serve.

Every big law firm could fill their incoming class with people happy to work for them for $80,000/year. Why don't they? Because the people they want, with the elite backgrounds they need to attract the top clients, won't sacrifice 2400+ hours/year for that. That is the market at work.

This is CHANGE! (NY/BigLaw was foolish enough to believe in)

86 -- are you really this dumb? I'm not saying this is how clients DO think; i'm saying that's how they SHOULD think. When a company hires a firm to close a deal, you think that they buy "hours" for the sake of hours??? NO -- they buy a "product" in the final analysis, just like GM -- they pay to have the deal closed at a given cost. WHAT DIFFERENCE DOES IT MAKE whether that deal is closed by a partner, an associate, or a paralegal? It only matters who can do it most "productively" (taking into account each person's oppty cost).

A partner may charge $1000/hr and close the deal in an hour. An associate may bill at $200/hr and take five hours to close the deal at the same level of quality. What's the difference? Try to step back from your law firm paradigm for a minute. Does the client give a damn whether the partner or associate closes the deal, all else being equal?

SO, Morgan's idiotic clients apparently want the partner to do all the work. Fine -- partners will do legal research. BUT, instead of going out and getting more business (which is worth, say, a million dollars in profit), that partner has to search westlaw all afternoon. SO, that partner is gonna charge accordingly -- a lot more than $1000 per hour -- to make up for his forgone oppty.

95 -- you're master of the obvious. Obviously, none of this applies if the 1st year CANNOT physically or mentally do the deal. Partners presumably won't give associates work that they CANNOT do. The issue at Morgan is that its clients won't let them staff 1st years, PERIOD. So partners and seniors get to search westlaw and spell check. You apparently think this makes sense b/c its a "service" industry. hence the problem with the legal profession.

What's the backlash against juniors about? You all realize that work done by big firms require a lot of doc review and diligence right? There is no way to get around it (except for the silly idea of outsourcing to India). That is the cost of doing business for the clients. Who else is going to do it? If the solution is to have juniors bill out at $150-200 an hour and only bill out much higher say after 4th year, let the market work that out. But clients can't demand they don't want first years on a deal when in 90% of the circumstances, there is a bulk of work that should only be done by 1st or 2nd years. Obviously if it is for routine client counseling or drafting, that is a reasonable request, to an extent. But depending on workload, timing and what's on a mid-level's plate, the mid-level has to pass it to a junior. The market is much slower, but it doesn't mean some folks with the experience clients are seeking are not fully utilized and can't turn to every matter.

12 -- AMEN!

120 -- Better quality doc review and diligence is done by paralegals than by new associates. And a paralegal with 20 years experience gets a salary that's HALF that of 1st year associate.

86,

so based on your logic, when i go buy a car, i should ask for the bios and credentials of everyone in involved in making the car. After all, their ability is a "proxy" for the quality of car i'm getting.

I have a crazy idea: how about i just avoid all that transaction cost and use GM's BRAND as a signal, and use their reputation as a proxy for the quality of product/service i'm getting. That way, i don't have to waste time micromanaging GM's internal operations and can ismply compare price and quality. I heard that cravath and wachtell are moving to this radical model. Morgan -- not so much.

"Every big law firm could fill their incoming class with people happy to work for them for $80,000/year. Why don't they? Because the people they want, with the elite backgrounds they need to attract the top clients, won't sacrifice 2400+ hours/year for that. That is the market at work."

Because everyone is a slave to the Cravath System.

Read this:

http://www.elsblog.org/the_empirical_legal_studi/2008/07/how-the-cravath.html

Why do firms need to pay junior associates to be doing due-dilligence and doc review? That kind of work doesn't teach the juniors anything or further their development into valuable mid-levels.

Instead, that kind of work should be handled by Staff Attorneys, who will cost far less than 160k+

Paralegals get billed out at high rates too. One of the firms I worked at billed out paralegals at practically the same rate as jr. associates. Is it better for the client to have an actual attorney working on a matter or a paralegal working on the matter if the cost is the same?

Doc review and due diligence aren't rocket science. If I'm going to pay the same for a paralegal as I am for an attorney, then I'm going to go with the attorney.

Zombie partners are seizing on a few comments by GCs to throw first years under their firms' runaway trolleys. Those comments generally go something like "I'd gladly pay a partner $1000/hr but I refuse to pay first years". What's afoot is an old zombie partner exploit - work hoarding.

Does it really make sense to pay a zombie partner say $650/hr to do work that a first year, someone far more likely to be up to speed on the current state of the law and its direction, could do for $300/hr? Obviously not. But that's what's happening.

Firms will continue to lose superstar rainmakers until they implode, merge or repel the zombie partner hoarde - first years just don't factor in. You see, the real reason firms can't pass along most of the profits generated by rainmakers to their rainmakers is because of zombie partner feeding frenzies.

I'll post part 2 of how partners become zombies after an interesting and oddly overdue announcement is finally made.

I'd rather have a paralegal than an attorney at the same cost.

It's easy to spot a shitty para and get rid of them. Therefore, it is unlikely that the work will have been performed by a shitty paralegal.

A shitty lawyer, on the other hand, takes a lot longer to spot and therefore it is much more likely that your work has been performed by one.

I'd rather have a paralegal than an attorney at the same cost.

It's easy to spot a shitty para and get rid of them. Therefore, it is unlikely that the work will have been performed by a shitty paralegal.

A shitty lawyer, on the other hand, takes a lot longer to spot and therefore it is much more likely that your work has been performed by one.

You can question the reasoning, but I have no reason to doubt the truth of Milone's comment. I know of at least two large, sophisticated clients who refuse to pay for first years. They put it in their written "guidelines" for outside counsel. That's not BS, it's happening.

I think -16 bears further discussion.

"You have to make a judgment about whether you can keep people busy going forward. It is not healthy for a lawyer to not be busy, to have free time on his or her hands. You don't grow, you don't develop, you're not happy.

And from a cultural perspective, you don't want to build a firm that culturally is populated by a lot of people, or too many people, who don't have enough to do."

This is an absolutely ridiculous statement. Oh those poor lawyers with some free time!

Has this person ever looked at the job satisfaction levels of BIGLAW lawyers? Have they considered that maybe some of the reason lawyers are so miserable is that they have no time to do anything outside of work?

I want to have #10's babies.

When you're a Jet, you're a Jet all the way
from your frst cigarette to your last dyin' day.
When you're a Jet, let 'em do what they can, you got
brothers around, you're a family man! You're never
alone, you're never disconnected! You're home with
your own when company's expected, you're well
protected! Then you are set with a capital J, which
you'll never forget till they cart you away. When
you're a Jet, you stay a Jet!

Just want to point out that not all 1st years are 24 year old kids who went straight through undergraduate and law school. I know quite a few first years who either had careers before law school or who have other advanced degrees. I know one 1st year with a masters in economics and several years of work experience.

These people bring a lot to the table and excluding them is a mistake. This is especially true when they are the cheapest members of the team.

My two cents.

115 is right. A lot of these problems would be solved by cutting the third year. Thats cuts 40,000 in tuition right off the bat and there would be associates would be less concerned with going down to 100-125,000.

If you really have a burning passion for International Human Rights, get an LLM. I'm sure schools would add more masters programs to recapture some of the lost 3L revenue.

Of course that lost 3L revenue is the reason the two year program will never happen.

121- and how much did you pay to go to law school? Oh, that's right, you didn't. If you want a seat at the adults' table, put your money where your mouth is or else stop complaining that you don't make as much as people who risked a lot of money to make a lot of money.

MLB sucks. Worst "big law" firm. Avoid it if you can.

No. 12 couldn't be more right. The law firm landscape is changing, and its about time. If you're a good lawyer and hustle, you can make a decent living. Young attorneys being paid $160,000 is a fucking joke.

MLB is second worst. First in the race to worst is Locke Lord, they are the Trig Palin of law firms.

"Wow - that interview with the Morgan Lewis partner only confirms the theorem that the number of times one says 'frankly' is directly correlated with the amount of BS you're shoveling."

Exactly, 177. Overuse of the word "frankly" is an excellent indication that one is an insincere douchebag and actually being the anything but frank. The interview tends to confirm this.

15 --
Speaking as someone who works in a suburban office park cubicle - there's *a lot* to be said for marble with cherry & oak furnishings....

--inhouse in the midwest...

Is the Jones Day Kansas City office nice?

Stop this ATL right now! You used to be an advocate for law students and associates and now you're virtually doing everything in your power to start a massive salary cut. Stop bringing it up in every post, stop making major headlines out of every small, unimportant firm that does it. STOP GIVING FIRMS EVERY REASON TO DO IT!

122, wow, way to completely miss the point and assume the opposite of what I am saying. If you're paying for cars, you get to pick what cars you want. If you're paying for billable hours, you get to pick what type of associates provide that billable hours.
So yes, if I am paying for billable hours from GM employees, I get to pick and choose which employees are racking up those hours. But since I am just paying for a car, I tell them what cars I want and not which employees I want.
And when firms move to bill by a flat fee, the clients no longer need to specify which types of associates they want. But you see...we're talking about the billable hour model right now.

NO NO NO!!! It's not a discount. You get discounts at Walmart. Our clients are major multi-brazillion dollar corporations -- they're waaaaay more sophisticated than that.

*knocks 15% off the top*

136, since you seem to think that those who got into a lot of debt must deserve to have a high salary, I don't think "risk" means what you think it means.

You are all idiots.

Skadden Secure <3

117, 120 and 122 have it.

Even before the "economic crisis," I was struck by what seemed to be the ruthless attitude at Morgan Lewis. I had a long conversation with a managing partner at one of Morgan's largest offices about what "smart" lawyers are doing and how "good" firms manage their people. He didn't bother to give lipservice to things like employee morale or company culture; instead, he only talked about "fungible associates," the practice areas that are most marketable, and squeezing the most out of your labor units. I remember walking away from that conversation swearing to myself that I would never get involved with the firm in any way.

MLB seems to attract a certain type of person. Maybe that works for them. But whoa unto them if there ever comes a time when associates actually have a choice about who to work for again.

Wait a minute, do law firms' clients actually think the Partners themselves are doing the majority of the work for them?

There is not a Partner in any firm truly worth the millions they make each year.

Zombie Partner's comments are consistently the best from anyone on ATL with an avatar. No flame, no schtick, no hyperbole, no uninformed ramblings. Thanks, Zombie Partner!

This is fucked up

Frankly, I think 46 = Milone. They both like to be frank.

146, that is not my point; I never said anything about deserving it. People who spent a bunch of money on a legal education can rightly expect to get a higher paying job than a paralegal or else they wouldn't have bothered going to law school. I'm not saying that it actually happens (see, e.g., most people who didn't attend a top 50 law school). Since 80% of grads don't make $160k, there is a huge risk that their gamble doesn't pay off. A paralegal doesn't risk anything and has a job precisely because other people took a risk on law school, had it work out, made it as an associate and, finally, made it as a partner (and, presumably, threw work off to the paralegal the whole time).

Thanks 100

~Signed 46

------------------------------------------------------------------------

Listen folks,

One other issue you're neglecting (while you should be studying for Secured Transactions) is that no client is rate-sensitive about every matter.

In february, when a client had a "oh shit" event, they needed all hands-on-deck over a weekend to deal with a major filing on monday. 2 Partners, 1 midlevel, and 3 juniors ended up working around the clock.

In the end, the client paid up the bill happily, because we tackled a major problem in a timely manner. The 1st year's both added serious value to the cause -- doing research and "gophering" that the partners simply didn't have time for.

This demonstrates the problem with the current market --- 10 years ago these types of weekends were commonplace, and were the best way for a junior to establish value to the firm (and clients). The juniors who were more willing to pull those weekends week after week (and more inbetween) were the ones you kept. The ones who shrugged off with "oh sorry I made plans this weekend" got fired after their 3rd year review.
------------------------------------------------------------------------

The basics of the BigLaw "bargain" have never changed. BigLaw partners, despite their apparently glamorous lifestyles, generally work ridiculous amounts of hours, sacrificing the raising of their children, hobbies, friendships, and even their health for that $2mm paycheck. Just because juniors (who are 50% of ATL's traffic and 90% of the attorney traffic) don't see any of that, doesn't mean it doesn't happen.

There is no such thing as "making it." One of the biggest rainmakers here has spent the last month hop-scotching across Asia selling the firm and building business. It seems glamorous until you realize he's missed his son's birthday and his wedding anniversary and hasn't slept in the same bed for more than 2 nights that whole time. And in addition to the 10+ hours a day of business development, he's up until 1 or 2am local every day working on billable matters (much of it spent dealing with junior associates back at the office) before getting 5 hours of sleep and starting over again at 7 or 8am.

That is what it takes to be the "greedy partners" that ATL readers want to vilify. There is no "work-life balance" down the road. You can only be the best by working longer, and harder, than everyone else. And in this economy, that means working even harder and longer than you did before the shit hit the fan.

A junior associate today has basically one concern -- how many hours do I have. A partner has dozens of concerns -- including worrying about where those hours are coming from and whether the firm is going to get paid for them.

Instead of worrying so much about "rounding up" like you all are while you troll ATL, try worrying about doing every single task you're given as fast and as efficiently as you possibly can. Instead of worrying about whether you've got enough work to fill your quota, worry about pumping out as many completed assignments as you can. Partners WILL notice.

In this economy, a junior associate who burns through every assignment they're given and who you just can't quite seem to keep busy no matter how much you give them, is a partner's dream. THEY will find you the hours.

Clients aren't charged $350 for first-years because anyone believes first-years are inherently worth it. They are charged $350 for first-years because it's part of the total package whereby the firm agrees to take on work for the client. $350/hr (80% of which goes to the partners) is just part of the scheme of shifting money to the partners. If you reduce first-year rates to $100, the partners will have to raise, say, 8th-year associates' rates by a corresponding amount in order for the partnership to keep earning the same amount of money

ATL is a way for firms to avoid antitrust issues yet learn about the market. Good job ATL... :(

126 -

I think a zombie ate your brain. Why on earth would a first year be more up to date on what current law is or, even more ridiculous, the direction the law is heading than a partner?

As an incoming associate at (what was once) a respectable firm, I am disgusted by the some of the comments from associates. You think that you are more deserving of a job (and a high salary) because you graduated 2-3 years earlier than me? I promise you, some of us are fully capable of hitting the ground running; we can learn how to do whatever it is you do within 2-3 weeks. So enough with the "3L's are useless" garbage. We are no more useless than you were 2-3 years ago. And some of us are better than you.

Firms need to come clean with their 3L's. This deferral shtick is just postponing the inevitable. They continue to sweep the issue under the rug. I am well aware that, in the 'new economy', there is simply not enough work for all of us. Some incoming associates will need to be cut. We are all very much aware of this fact. So why string us along for 6 months or a year if the end result will be the same -- some offers will have to be revoked.

Personally, I will jump at the first job that looks half-decent and will likely never join BIGLAW. I am just so bitter about the whole scheme, and this is before I even start. And yes, some of us will have options.

I truly believe that, after the economy recovers in 2015 or so, the best and brightest will no longer see BIGLAW as a good option. The firms will end up losing out on the best talent. Yes, I know (you fucking jackasses) that there will always be people willing to sell their soul for $160k. My point is simply that the best among us will not. The BIGLAW show is over.

So come on you asshole associates, lash out at me. I don't give a shit anymore.

"gwaa... gwaa..." - translation: as long as senior associates/partners supervise the work product of first years AND write off some (or a substantial part) of the time billed by first year, clients should be OK with first years bliing to their matters.

As a 1980 TTT graduate, now inhouse in a senior position with a big stable corporation, I want to express admiration for all of the intelligence and wit presented in these various comments. This thread is by far one of the best I have read on the entire subject, especially 100, 123, 124 and Zombie. it is also difficult to top PE for comic relief on a tough day.

I would provide two glosses maybe approaching insights.

1. I have been having numerous dinners and conversations with successful peers who went on to manage the V20 firms addressed here. Their issue is simple survival, as the Thelen dissolution shows. Simply put, their rainmakers will leave to preserve their profitability, we clients are utterly unsympathetic and happy to outsource to India, and they have been eating lunch with the zombies for 20 years or more. As those practice areas evaporate (maybe never to return) they will attempt to "retool" their friends (and the parents of their kids friends!!) rather than protect the interests of those not yet hired, or even known to them.

2. First associates with skills and intelligence are worth paying for. Some sort of Darwinian process forces some to useful and marketable skills and leaves the others as document review chum. To survive find a REALLY boring speciality that no one else wants, stick with it, and try to see if there's a relevant government agency to work for.

Last, I have to say that what provoked me finally to comment is that when i joined the BIG FIRM meat market of ours back in 1980, the big fight was whether to bill over 1800 hours and if that would lead to unprofessional work. I am absolutely floored to learn that the standard is well above 2500 billable. I no longer resent the salaries I read about. Each of you is worth your weight in gold to those firms, and I had no idea it had gotten that bad.

Two years ago I enjoyed "supervising" a document production in London, somewhat resenting making less than the associates engaged in a doc review -- no more!!

Many of us are doing what we can -- which may be no more than to steer people away from law school for a while. it is hard to say who is in the worst position right now -- although I think my vote is for first or second year associates caught in a layoff. (I have less sympathy for the zombie partners in their big houses . . . .)

maybe clients would be more happy to have first years working on cases if the law firms paid these people 60 to 80k per year more like normal entry level for a great many number of new attorneys instead of the whole ego/presteige driven BS that goes into paying someone with no experience 25k summer/160k to start. just a thought. Why does any firm have to pay a newbie that much to start anyway? many other businesses drastically cut salaries when times are tough to avoid firing people. The ego/prestiege trip of these law firms is killing the profession for both junior attorneys and more importantly, clients.

maybe clients would be more happy to have first years working on cases if the law firms paid these people 60 to 80k per year more like normal entry level for a great many number of new attorneys instead of the whole ego/presteige driven BS that goes into paying someone with no experience 25k summer/160k to start. just a thought. Why does any firm have to pay a newbie that much to start anyway? many other businesses drastically cut salaries when times are tough to avoid firing people. The ego/prestiege trip of these law firms is killing the profession for both junior attorneys and more importantly, clients.

Can we all admit this is a direct consequence of 160K salaries? We should've stayed at 120K - now partners feel they owe us nothing.

Well said 159. I'm sick of the bitching about "worthless 3L's and first years" and moaning about how they dont' add anything to the bottom line. No shit. There's only one way for a first year to become a third year, so unless someone has an alternative suggestion, stop slamming those who are in the exact same position you all were at one point.

elie, your shtick about firms owing the new associates something bc of the associates' debt obligations is tired and non-sensical. STFU please. thank you.

Morgan Lewis did not just talk the talk, it has got rid of lots of its second years already (if not all). Milone is now working hard to justify his ruthlessness decision of throwing these junior associates to the worth legal job market since the Great Depression.

Morgan Lewis did not just talk the talk, it has got rid of lots of its second years already (if not all). Milone is now working hard to justify his ruthlessness decision of throwing these junior associates to the worst legal job market since the Great Depression.

Morgan Lewis did not just talk the talk, it has got rid of lots of its second years already (if not all). Milone is now working hard to justify his ruthlessness decision of throwing these junior associates to the worst legal job market since the Great Depression.

163, if they paid 60K-80K they'd still be able to find people to work for them, but the most "desirable" law students (however "desirable" is defined) will choose to work for the federal govt for equal pay, a better lifestyle and more interesting work. Perhaps "lesser" law students can do sufficiently fine work, but so far, at least, this is not a path that firms have chosen to follow

Clients are obviously rejoicing at the opportunity to exert downward pressure on their legal costs given the economy. However, I think no self-respecting firm can long afford exclusion of first-years from the work of any given client. As people have mentioned above, today's first year is tomorrow's mid-level. The firm and ultimately the client will suffer without people properly trained on the job. And of course, the firm deserves to bill something for the time that staff and attorneys put into a matter.

The real crux of the issue is what is a reasonable rate for a first year attorney. I agree the Belgium model mentioned above is a poor one given the economics of a legal education in this country. However, it is worth noting that young physicians in this country graduate medical school with debt typically exceeding that of a lawyer (4 years of medical school) and then take 3-6 years of training at fairly low pay. For reference, the salary in the New York area for these interns and residents amounts to about $55k for a first year with a $2-3k additional per year of training. This uniform salary is partly a result of receiving a single job offer through a computer bidding system at the end of an interview system ("the match") which you are committed to unless you want to experience severe penalties. There is no difference if you attended Harvard Medical School or SUNY. It also doesn't matter if you are training at Columbia Presbyterian or a small hospital in the Bronx. The salary is basically the same. Once they finish their residency and fellowship, they will enter practice for a variable period of time (2-5 years) before being promoted to equity partner. However, at that point these physicians will typically earn something on par of a biglaw associate.

While the physician training model does exploit young physician labor, it protects their overall career interests because they get mentorship during their vulnerable period of "low-value" and enter into the job market fully trained. The AMA has also carefully regulated the size of the workforce so that you don't end up with huge boom-bust cycles for doctors.

The only downside with this model is that physicians --even at the high end--are unable to leverage themselves the way that attorneys do. There are certainly fewer doctors making a million plus dollars a year than lawyers. However, this scheme protects the long-term interests of physicians by ensuring even supply and demand in the workforce and ultimately higher than average compensation (at least compared to lawyers as a lumped in category). It also protects quality though impairs access somewhat.

So perhaps the solution is to create residencies for lawyers? Hopefully with salaries lower than those offered today but higher than those offered to resident physicians. After all, most corporations have deeper pockets than the government which subsidizes resident physician salaries in this country.

166 is Elie

"Can we all admit this is a direct consequence of 160K salaries? We should've stayed at 120K - now partners feel they owe us nothing."

That's right in that the high pay absolves the GP from guilt--GAs are making top of the market money, GPs are not going to settle for less than top of the market profits either. It also absolves them from having any responsibility towards a GA, since their motives are identical and nothing is left of the old veneer of civility but the pretense that GPs put up with summer GAs that this is some kind of "normal" job. It isn't, not at Biglaw. It's a gauntlet, it's not fun, you survive it or you drop out. Worse, if you finish it you don't get to rest and feel a tremendous sense of accomplishment. You just feel like you've just sunk 13 years into this thing and you have to keep going to get some reward for it all or else it will all be for naught. It never ends. You better find a way to enjoy it day to day, or for the love of god leave and find something you do enjoy.

Decreasing 1Y salaries to $120k doesn't solve the problem, a GP with a decent book of business does not feel any loyalty these days (and gets none in return) towards the partnership, and will defect to wherever billing rates, partner shares and leverage work to best advantage his practice. So unless GPs are also willing to take less of a cut, going to $120 can't work, top GAs will go elsewhere and/or the GPs will just pocket the difference and still trim the "fat".

The whole legal market has changed, and we can't blame the GAs or GPs alone, they each did what was in their best interest and this is where we've ended up. I'm not saying all this because I want to change anything or have any idea how to do that; I'm only doing it because I still meet fresh young GAs from top schools who still don't understand how it all works, or talk about "firm culture" or their firm being "different", all the while going through the exact same thing I've seen dozens of other GAs go through. If it's Biglaw and $160,000, your firm is not different. You child.

100 - Marcus Aemilius Lepidus

PS: None of this is directed at 164, I just used the quote.

166 is Elie

In Morgan's "stealth" layoff (conducted in January 2009), the target was those junior associates with low billable hours (at the market downturn, billable hours were kept by senior and mid-level associates). These junior associates got poor reviews at no fault of their own, and lost not only their jobs, but also their career.

175 must have been a layoff. Bummer for you, dude. But get over it.

So 176 is the one who kept the hours to yourself? Just remember you are once a first year!

175/177 -- stop whining. you got axed becuase you suck, pure and simple.

Did BIGLAW change forever? There will no longer be so-called prestigeous Vault 100 soon. Small is better in this market.

179: No, biglaw hasn't changed forever. The legal market now is like it was in 2002, 1997, 1991, etc.

Is it fair that associates in the class of 2006 got a very easy ride when the class of 2009 is a nightmare? No. But it is life.

154, call it whatever you want. There is no reason why someone who took on more financial risk should "expect" a higher financial reward.
People make stupid financial decisions all the time. Just look at all the people paying full ticket to go to TTT schools.

Agree wtih 180, life is bad during ressession. Let's hope for the best. It is life. LIfe is composed of randomness, good luck, or bad luck. Ultimately everyone is going to come out of this recession fine - it is just a different career path for those whose lives are changed.

180 - 2009 is nothing like 2002, get real.

183 -- I disagree. 2009 is like 2002. Just add 7.

--180

184, you're right, my bad.

-- 183

181 -- it's not taking more financial risks, it's getting to law school for purposes of being a licensed attorney. Paralegals are not licensed attorneys as a general rule. It is perfectly normal to expect a higher salary when you're legally entitled to give legal advice and perform the bulk of the legal work, which paralegals cannot and don't do.

What would first years do if not doc review and due diligence?

Many first years serve a purpose. Partners enjoy the ones who are willing to bend over or spend em.

144-

i hope you're joking. clients don't hire ASSOCIATES, they hire a FIRM or maybe a PARTNER, and the FIRM or PARTNER chooses how to accomplish the work -- ie, what labor to employ, what paper to use, what desks to buy, and what type of computer to type on. Law firms are not escort services -- where clients get to pick and choose who is staffed on what (beyond the partner level)!

Morgan's issues merely reflect an overall price pressure by their clients BECAUSE morgan and its partnerssimply cannot command a premium like cravath, etc. But morgan cannot admit this, so they spin it by saying that clients won't pay for 1st years. They WILL pay for 1st years, AS LONG AS those 1st years generate quality product! I

Morgan's issues are a symptom of a morgan problem, not some systemic issue sweeping top tier legal industry.

7, where do you work?

Biglaw isn't dead. But the class of 2009 is so fucked it's beyond comprehension. How will firms absorb all of us? Even if the economy does improve, which is highly unlikely, the firms won't be able to take in 80+ person incoming classes any time soon.

The firms need to just cut us already so we can move on. These deferrals are a joke. Nobody believes we will ever start at our respective firms.

Will Morgan Lewis Latham its first years?

I am a Belgian model.

176 - "Get over it?" Easy for you to say. Go fuck yourself.

Laid off 1st Year

136 -- $73K , class of '94. wake up and smell the coffee, punk!

136 -- $73K , class of '94. wake up and smell the coffee, punk!

I wish I'd never gone to law school. This is a horrible life.

Love the honesty 173, I can't wait to fold this hand.

Hey guys,

Can we get more comments about how much a law firm is like an auto plant? I was really enjoying all the back and forth.

-Arnost

what a load of Bockius

Are your lawfirms so big you don't know what is really happening?

Our smaller law firm represents big corporations including General Motors, Honda, Wyeth, etc and these companies dictate to law firms - a lot - about how the firm will operate.

They will review and approve (or not) all resumes of every billing person on the case, attorney and paralegal. They will say how many attorneys at which levels will be assigned to the case. They will cap billing rates, refuse rate increases. You can't just add a billing person to a case - like someone needs work and you have extra billable work - you either give them the work and not tell them that their time will have to be written off because they aren't approve to work on the case or you don't give them the work (the former is more common sadly enough).

They will tell you which outside vendors you can use, like copy firms, the max amount of time you can bill for certain activities, how much they will pay for faxes - if they will pay for faxes at all - whether you can use WestLaw or not or the max amount you can spend on Westlaw a month for all cases, what hotels you can stay in, the time of day you can travel by plane (off work hours only).

These big clients will tell you so-and-so lawyer isn't allowed to work on their cases anymore or this-or-that partner is the only one permitted to depose experts, or no associates can attend trial (well, they can attend, but the client won't pay for them to attend).

They will dictate what the bills look like and how they are sent to them (electronically sometimes). These companies tell the firm when they will pay - 60 days, 90 days - it's up to the clients. The client studies every line of every bill and scratches out all kinds of things and will refuse to pay. This can be "clerical" or "too much time" or "not allowed" or anything else they can think of and it's written off the bill. These big clients dictate all of these things.

I am sure they have already dictated 1st years can't bill on their cases at some firms. I bet some 1st years will have to work on cases anyway, it just won't be billed to the client. Our 1st years do all kinds of things including attend trial and the firm just eats a lot of it. Seriously, 54 hours billed to draft a Motion for Summary Judgment?? A client isn't going to pay for that.

This affects V30 to V100 firms more than V20 (i.e., firms charging more than they're worth).

I work for a V20 firm. We don't work for clients who bitch about billable hours. If they want cheap service, they can hire a cheap firm. If they have a case that exposes them to hundreds of millions or billions in liability, they will happily cought up the Benjamins for top-line legal services. We turn away high-brow work on a daily basis. It's the firms who can't discriminate against whiny clients who have to kowtow to clients' whimsical value demands.

It's all about bargaining power, and firms like Morgan Lewis don't have much.

201-

well, those clients are just reshuffling the cards. they can "refuse" to pay for 1st years, but that just means that the firm won't list "1st year" on the bill. They will list "5th year," but that 5th year will just delegate the work to 1st years anyway (and then review that work)! who gives a shit HOW the work gets done?

203 - wow, you would have to be real careful with that. If a 5th year is assigned to the case and he passes work on to a 1st year, but the work is billed to the 5th year, that could lead to problems. If the 1st year's work is bad, the client can say , "Hey your 5th year's work product is crap" and the 5th year can get jacked for that - even if the firm was okay with the work getting passed on, but billed by someone else. The firm would deny having knowledge of the practice and throw the 5th year under the bus.

I have seen a corporate client state a certain associate can no longer work on the cases because of a personality conflict. The firm still had him work on the cases, but covered up that he was the one doing the work. They had others do all the communicating with the client. The client figured out what was going on and took away all of their work from the firm. The firm was in a spot because it could not give the work to another associate - no other associate had the same background and experience. I think he was a 5th year.

This makes more sense at Morgan than at some other firms. At least at some offices, we place little emphasis on first year recruiting, believing our top talent to come from lateral recruiting. Accordingly, we have some lousy first years and some very top-notch V10 refugees who lateralled because they wanted to leave New York. Some of it's a self-fulfilling prophecy. Some of it is because of lousy summer programs and insufficient effort at law school recruiting.

100 aka 173,

Your posts are so dead-on as to the reality of Biglaw that I copy and pasted them so I can re-read them now and then. I must admit, the reality is a bit depressing . . . Can you shed some light as to whether you're a partner now? And what's your suggestion for a third year who still has his Biglaw offer intact, is there a way out of this depressing "gauntlet" that will still take care of my loans and future?

You are all idiots.

Skadden Sidebar (praying I have a job still waiting for me)

Thoughts on paralegals, because there seem to be so many positive thoughts on using more paralegals.

NYC biglaw hires kids straight out of top undergrad schools who paralegal for a year or two before going to law school. No disrespect to career paralegals, but those temporary paralegals are notoriously overworked, overbilled, and underpaid. And usually very good at there job after a break-in period of a few months. The client is getting a deal. Then those same paralegals go work for law firms. The reason you can't just hire paralegals instead of junior associates is that you can't do real legal work as a paralegal- you top out in a year in what you can do, realize where the real money is, and jump ship. Yesterdays paralegals (who you seem to love) are often tomorrow's first year associates (who apparently are hated).

~former V20 paralegal, now T5 law student

Wait, Latham NY laid off more than half the first year class, and 45% of its total associates? Holy B'Jezus.

Latham's behavior in 09 was far worse than Shearman's in 01.

On a positive note, Shearman is probably breathing a sigh of relief now that Latham has become the new whipping boy in the legal community.

We are using less paralegals. Clients have decided a lot of what they have been doing is clerical and not billable. Some of their work is getting bumped to the secretary and some to the associates with a more legal sounding description of the activity.

For instance, arranging depositions is now considered secretarial. The associate can email around to all parties to get availability dates for depositions, but bill it has a million other things - TC with all parties regarding discovery issues. Firm makes more money anyway if the associate does it over the paralegal. The paralegals are getting squeezed out.

"If you can't afford to pay for first-year level work, like document review, you can't afford the higher-end firms. Period. Go somewhere cheaper."

What utter BS.

I was in-house for a Fortune 50 company in the late 1990s. For sophisticated work we hired firms where 90% of their lawyers spent their first three years out of school in clerkships, generally ending with a SCOTUS clerkship.

For mindless crap like document review, that firm hired contract attorneys at like $100/hr.

Any sophisticated client that pays BigLaw first year rates for a document review of any scale deserves what it gets.

If you are a highly compensated first year associate at an AmLaw 100 firm and the bulk of your time is spent doing document review, you need to understand that you are trapped in a business model that's about to go over the cliff.

Face it, first-years are pretty worthless.

God, you are such bitches.

Shut. Up. Already.

Nobody cares that you hate your jobs and, likely, yourselves. What a collection of worhtless, whining children.

To 212: Document review is not "mindless" work. Careful review by a good legal mind can and sometimes does result in breakthrough discoveries that make or break a case. For example, due diligence document review for a client planning an important acquisition in which the IP was the critical element disclosed a document containing an oblique reference that seemed to suggest that all was not as it should be with the target's IP. The reference was tracked down; it turned out the IP was all subject to an exclusive and irrevocable license, making the target worthless. The reference never would have been spotted, much less tracked down, by a "mindless" review. Was the client bothered by paying fifth year Top Ten rates for the document review? No way; the client was delighted and thankful and remains a client to this day.

On Morgan Lewis: Many years ago, I brought my $1m plus book of business to ML. It was the most miserable year of my life. Paralegal and junior associate time billed to my clients was outrageous and clearly fictional. The poor kids finally admitted that the firm dictated that X time be billed for Y, no matter how long Y really took, and it often took 1/10 X. I refused to send out bills until the overbilling was corrected; ML refused to correct them. No bills went out to my clients until I was leaving, when ML finally agreed to correct the bills given the alternative of my advising the clients that they ought not to be paid. I rather doubt that these practices have changed.

ML clients have the wrong end of the stick when they refuse to have first years work on their matters. The first years arent the problem; ML management is the problem.