Here’s one great benefit of blogging: Publishers send you free copies of books, hoping that you’ll review them!
I received and read, but now choose not to review, Steven J. Harper’s valuable new contribution to the literature: The Lawyer Bubble: A Profession In Crisis (affiliate link).
I’m not reviewing the book, but instead using it as a jumping-off point to discuss a tangent. Harper explains in his book two things that every sentient lawyer has noticed over the past several years: (1) students are graduating from law school buried under a mountain of debt, and many of those students can’t find jobs, and (2) many law firms have lost sight of the law’s noble history as a learned profession and are now obsessed with maximizing their profits per partner in the coming year.
Harper’s right about these things, of course, and this isn’t exactly late-breaking news to anyone who’s been following either Above the Law or Harper’s blog, The Belly of the Beast, for the last few years. Harper’s book advances the discussion, however, by exploring these issues in more detail than others have. He also proposes possible solutions to these problems, including “allowing the federal government to recover [law school loan] guarantees from a law school (and its university) whenever a student loan became the principal contributor to an alumnus’s later bankruptcy.” (Page 159.) Or encouraging law firms to release their “Working Culture Index,” which would show the percentage of lawyers billing more than 2000, 2100, 2200, 2300, 2400, and 2500 in the previous year (perhaps with separate totals being released for partners and associates). (Page 173.)
These ideas are well worth discussing, and I’m glad that Harper has taken the time to analyze these things. But I have another topic to highlight, which is an odd tangent to Harper’s two issues . . . .
I’ve written before about “the partners’ lament” — equity partners at law firms, previously strangers to me, who called to cry on my shoulder after I moved in-house and started writing this column: “Tell me how you did it, Mark. I’ve gotta get out of here!” (I actually didn’t “do it.” I was working happily as a partner at one of the world’s largest law firms when an intriguing offer fell my way, and I decided to experiment with a different path. So far, so good.)
Why are some equity partners desperate for change? Equity partners at large firms have succeeded, for heaven’s sake: They landed choice jobs out of law school, successfully ran the partnership gauntlet (the link is for the commenter who once insisted the word is spelled “gantlet”), moved through the income partner years, and emerged at the top of the pyramid. Equity partners earn the riches of Croesus every year, have associates at their beck and call, and are the envy of others in the profession.
And many of them are miserable. What’s up with that?
One thing that’s “up with that” is that these folks may not feel as though they’re working in partnerships. In an environment in which many partners protect themselves (and maximize their personal incomes) by hoarding clients, a “partnership” is not a very collegial enterprise. Instead of working together with colleagues to earn some money, have some fun, and do some good, these unhappy partners find that they’re competing with their colleagues to attract new business, are receiving few referrals from their partners, and are constantly at risk of being thrown out of the equity partnership ranks for having had a couple of bad years. That environment may not breed satisfaction.
Harper’s book provides three numbers that shed light on another side of equity partner dissatisfaction: (1) the gap in pay among equity partners has risen dramatically in recent years (Harper cites one firm in which the pay spread from the lowest paid to the highest paid equity partner has risen from five to one to nine to one during the past decade; page 101); (2) “A majority of big firms have begun reducing the compensation level of 10% to 30% of their partners each year, partly to free up more money to award the top producers,” page 102); and (3) “Typically, two-thirds of the equity partners earn less, and some perhaps only half, of the average PPP.” (Page 103.) (Before Dewey & LeBouef collapsed, “[s]ome partners were making $300,000 a year; others were pulling down $6 million to $7 million.” (Page 136.))
Think about what this means for the average hugely successful person who is an equity partner at a brand-name firm: If the firm has average profits per partner of $1 million, and the firm pays its three heaviest hitters $4 million per year, then the firm must pay 18 partners $500,000 per year to make the arithmetic work. Although $500,000 is nothing to sneeze at, it’s surely a little demoralizing to read in Am Law about how rich you are while you and the IRS know the truth. Many equity partners at large law firms will spend their entire lives hoping to work their way up to average partner pay and down to average partner hours, and most — not “a few,” or “some,” or “the incompetents” — will never reach those goals.
Don’t get me wrong: I understand that the “plight” of a guy earning $500,000 a year who’s worried largely about being demoted to income partner or “of counsel” doesn’t equate to the plight of the unemployed recent graduate buried under $100,000 in debt or someone struggling to support a family of four with an income that’s not up to the task.
But there’s something odd about seeing folks at the pinnacle of their profession (and, in many ways, the pinnacle of the world) so deeply dissatisfied with their careers.
One former editor of the Harvard Law Review criticized the profession even more harshly before abandoning the practice of law: “The law is crowded — interesting — full of despair. It offers its own rewards, but none other. As a game there is nothing to match it. Even living is a poor second. But as a philosophy, as a training for such eternity as the next hour offers, it is nowhere — a mockery of human ambitions.” (Page 203.)
That guy — Archibald MacLeish — went on to do okay for himself. So perhaps all is not lost.
(MacLeish also (almost) gave some fine advice on legal writing: “a brief should not be, but mean.”)
Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at [email protected].