Bad Ideas, Job Searches, Law Professors, Law Schools, Student Loans

Law Professor Suggests Cutting Associate Salaries In Response To Job Crisis

My friends, today we have reached a singular height of self-serving hypocrisy. We’ve got a law professor out with the helpful suggestion that the way to deal with the vast oversupply of law school graduates who don’t have jobs is for law firms to collusively decide to pay the people they do hire less money.

According to this professor, law firms will magically hire more people if they just didn’t have to pay as much as $160,000 for new associates. Of course, the argument completely ignores the fact that Biglaw firms could find associates on the street willing to work for nine bucks an hour and a Metro card if they really wanted more people. It overlooks the reality that firms are more interested in hiring as many people as they need, not enough people to make sure law schools are happy. But what does this guy care? He’s a law professor, and as long as he’s shifting the blame away from law schools to somebody else, it’s a deflection mechanism worth putting on the internet.

So yeah, let’s all take a look at the latest bit of horrible logic coming from somebody who is happily profiteering off of the oversupply of young attorneys but is eager to blame somebody else for the crisis that pays his salary. It’ll be good fun…

Professor Lawrence Solan of Brooklyn Law School took to the Huffington Post the other day to offer the kind of unhelpful, unrealistic thought bubble (with no understanding of the actual market) that gives academics a bad name. Here’s his “simple” proposal to fix the terrible job market:

The crucial question facing both legal educators and the legal profession, then, is how to get newly minted lawyers through the first couple of years so that they gain enough knowledge and experience to become “adult lawyers” capable of producing high professional caliber work.

Here is a simple proposal to address at least part of the problem: If clients are not willing to pay top dollar for the work of inexperienced associates, hire the associates at lower salaries, and give them substantial raises as their value increases…

Why not cut associate pay in the early years? For example, offer them $75,000, $125,000 and $175,000 for the first three years, respectively. This salary cut will permit firms to continue to train the next generation of elite lawyers in substantial numbers, while shifting some of the cost of training its most junior associates from the clients to the trainees themselves. Moreover, although large firms face pressure to remain competitive, the promise of these substantial raises should be a significant enticement to attract the best talent. Finally, savvy business clients will respect and choose firms that honestly link compensation to the realities of the market.

Did you get all that? Solan suggests that cutting salaries for entry-level associates will allow law firms to hire more people so they, the firms, can train more lawyers.

As regular readers of Above the Law already know, the most obvious problem with Solan’s “novel” plan is that IT HAS BEEN TRIED ALREADY AND FAILED. In 2009 we covered, extensively, how a bunch of law firms toyed with all kinds of changes in their salary structure so that they had to pay less than the top of their respective markets for new associates.

Some firms, like DLA Piper, cut salaries outright. Other firms, like Dewey & LeBoeuf (remember them) engaged in elaborate salary freezes that attempted to retard the growth of salaries for junior people. You know what happened? It didn’t take. Firms quickly realized that if they wanted to be in the market for the best associates — the ones who go to the best law schools or finish at the top of their law schools — they had to pay top dollar. They figured out that while the dregs would work for cheap, the best expected to get paid. People weren’t willing to wait three or four years to cash in, because most of them didn’t want to be in an awful law firm job for much longer than three or four years anyway. By 2010, most firms had moved back to the market salary scale, because they had to.

These firms aren’t running a charity. They’re paying $160,000 to entry-level attorneys because that’s what it costs. If they could get the same talent for less money, they would. If the recession has proven one thing, it’s that law firms don’t give a damn about what you think you’re entitled to.

And so the firms saved money by hiring fewer associates. There’s also a certain business sense to that decision that might have escaped professor Solan. Firms hired enough people to do the work that they had available. Even if they could, why would a law firm hire two people to do the work that one associate is doing now? This isn’t the good old days where firms have more work than they have staff. Clients don’t want to pay for junior people to do work, why would they be more willing to pay for two junior people to do it?

And while we’re here, not to get all “legal” with a law professor, but I imagine that if law firms decided to set an artificial price ceiling on what they would pay for first-year talent in a collective effort to address industry-wide concerns, federal anti-trust lawyers would become very interested in the “wage fixing scheme.”

I suspect the fact that this has been tried and failed doesn’t really concern Professor Solan. I suspect the fact that this idea doesn’t make basic market sense and is probably illegal doesn’t concern him either. Because the point of this piece is, once again, to shift the blame for the market crisis away from law schools that are currently under the microscope.

For instance, notice how Solan mentions “[t]he crucial question facing both legal educators and the legal profession,” but then his answer doesn’t actually involve legal educators doing or changing a darn thing. Solan starts the blame shifting right at the beginning of his piece:

[L]aw schools, including my own law school, are implementing various forms of experiential learning, ranging from in-house clinics to enhanced externship opportunities to the equivalent of full-year apprenticeship programs. While law schools should continue training lawyers to hit the ground running, these moves respond to only a small part of a larger problem.

For those playing along at home, Solan is trying to say that the inability of law schools to train practice-ready attorneys is only a small part of the problem of clients being unwilling to pay for attorneys who aren’t ready to practice.

I imagine Solan sitting somewhere thinking that if only law firms would go back to paying people to do what three expensive years of legal education can’t accomplish, then everything will be fine. With that dream firmly in mind, he went about writing a fantasy article where firms magically swoop in and save law schools from changing the fundamental way they do business. To say this article is self-serving is obvious.

But I also said it was hypocritical. And here it is simply stunning for a law professor to blame the high salaries of first-year law associates without so much as mentioning his own engorged pay as part of the problem. Law firms should pay a first-year associate less so they can help out more law graduates, but law professors shouldn’t have already taken a huge pay cut so that recent graduates don’t have quite as much crushing debt when they are kicked out into this jobless wasteland? Is this guy serious?

More to the point, Solan is suggesting that everybody who graduates from law school with a job should make less so his salary can stay the same. I don’t know who Professor Solan is trying to help in this piece, but it’s not the graduates of Brooklyn Law School.

UPDATE (10:00 PM): Lat here. Elie clearly isn’t a fan of the idea of hiring more associates at lower salaries. But, for what it’s worth, such an idea was floated in our pages last year by Anonymous Partner.

Pay Associates Less? A Novel Response to a Rapidly Changing Legal Market [Huffington Post]

Earlier: Buying In: More Associates… Making Less

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