I like it when the artifice drops and Biglaw is shown to be dominated by greed. I don’t necessarily use the word “greed” pejoratively. I like money, you like money, and if somebody offered you more money to do what you are doing already, you’d take it.
I just like it when people can admit that the only thing they care about is money. It just makes things more efficient. What do you want? More money! When do you want it? Now!
Associates get a lot of flack for being unabashedly greedy, but an excellent report in today’s Wall Street Journal illustrates that Biglaw partners are just as obsessed with money has anybody else.
And the only problem is that the partners losing out on the money grab are kind of pissed….
At the heart of the WSJ’s report is the fact that the pay gap between “superstar” Biglaw partners and everybody else is rising:
Now some top rainmaker partners at firms in New York, Los Angeles, Washington and Chicago earn $10 million or more a year, compared with $640,000 for the average partner at a U.S. firm, said Jeffrey Lowe, a managing partner at the legal recruiting firm Major, Lindsey & Africa.
“The [pay] differences have gotten huge between the top and the bottom,” said William Roberts, an attorney who previously worked at Hogan & Hartson before co-founding a small firm in Boulder, Colo. “It’s not without economic justification, but it comes with a cost in terms of ego and morale.”
In fact, there is a very good economic justification: clients are paying for people, not firms.
Widening pay spreads are a response to the way companies assign work. Clients generally care more about which lawyer, and not which firm, will be handling their affairs, driving up the value of those lawyers who command loyal client followings. Stars are particularly sought these days, lawyers said, partly because their rates are less apt to meet client resistance.
“We hire lawyers more than firms,” said Matthew Biben, the general counsel of Next Jump Inc., an e-commerce company in New York. “I’ll pay certain top lawyers $2,500 or $5,000 per hour to solve a problem,” said Mr. Biben, who was previously the deputy general counsel of Bank of New York Mellon Corp. “I will pay for value, and I’m not as concerned about how firms internally divvy up the pie.”
Of course, it’s entirely possible that clients aren’t making an economically rational decision. Are people like Biben really paying $5,000 an hour for lawyers that are best at solving problems? Or are they paying that money for the lawyers who are best at selling themselves? You know, I liked the Bud Lite Superbowl ads too, but I don’t make my beer-buying decisions based on ad campaigns.
But that’s on the clients. Biglaw is a service industry. Firms are just trying to respond to what the clients want, and the clients apparently want big names. And if you are not a big name, no matter how good you are at being a lawyer, you lose:
Hogan Lovells, which has 2,500 lawyers globally and is known for its corporate and litigation practices, pays its highest earners more than 10 times as much as its lowest earners.
The divergence hurts the firm’s partnership ethos, creating a sense among some partners that being a lawyer is “less of a profession and more about making the most money you possibly can,” said Jeffrey Pariser, a former Hogan partner.
Well, if that’s the goal (and “he who has the most toys wins” does sound like a Biglaw maxim), you have to ask how well schools and firms are training young people to compete on those terms. The WSJ highlights Kirkland & Ellis as a firm with a wide pay disparity among its partnership that has been successful at poaching big-name partners.
Is it more economically efficient for Kirkland to poach big names rather than train their own? Would it be cheaper for Kirkland in the long run to train and retain the superstars of the future instead of having to buy them from a firm like Skadden?
Or is developing a “superstar” such a nebulous crap-shoot that firms just can’t figure out how to develop that kind of talent?
In any event, it is more than obvious that if you want to make as much Biglaw cash as possible, you need to focus on your rainmaking skills more than your lawyering skills.
Learn how to make the best client pitch if you want to make seven figures. Leave the best brief writing to the people content to make six figures. And let your own greed clarify your career decisions.
Pay Gap Widens at Big Law Firms as Partners Chase Star Attorneys [Wall Street Journal]