Biglaw firms have been talking about moving away from lockstep since the start of the recession. Orrick's Managing Partner, Ralph Baxter, has been talking about it since before the recession.
Next year, Orrick will be doing it. Instead of a lockstep system, the firm will introduce three different levels for associates. Here is the how the firm describes the change in its official press release:
Orrick will replace the automatic lockstep advancement model for its partner track associates with a model that allows associates to advance at a pace that reflects their developing skill set.
The firm will have three levels of associates - Associate, Managing Associate, and Senior Associate - with well-defined performance criteria for advancement from one level to the next and with corresponding compensation levels. To implement this program, the firm is enhancing its associate training, mentoring, and feedback systems.
"The traditional associate lockstep staffing and compensation model is based upon out-dated assumptions," said Laura Saklad, Orrick's Chief Lawyer Development Officer. "Our new Talent Model recognizes that not all associates advance at the same pace, tenure is not a proxy for advancing skill, and clients should not bear the cost of training associates. In the end, our goal is to deploy the right lawyer or professional for the right task at the right cost. "
The three classes apply only to "partner track" associates. What are non-partner track associates going to get? More details and an opportunity to provide some instant feedback via a reader poll, after the jump.
American Lawyer has released its A-List for 2009. The rankings try to measure the qualities that make an elite law firm:
This list, which we launched in 2003, aims to measure and quantify the qualities that define an elite law firm, making an effort to look beyond profits. We examine four factors: revenue per lawyer, commitment to pro bono, diversity among lawyers, and associate training and satisfaction. Our formula gives more weight to the first two factors; we double a firm's scores for revenue per lawyer and pro bono, and then add scores for diversity and associate satisfaction.
This year's A-List? The elite of the elite? The top three firms are:
In the past two months, we've reported on three firms instituting an apprenticeship model for first year associates: Drinker Biddle, Howrey, and Frost Brown Todd. "Apprentices" start at the firm at a lower salary and are not billed out to clients, billed out at a lower rate than normal associates, or billed out for lower total hours. It sounds like an apprentice is a "paralegal plus." Of course, that "plus" includes a J.D. and its accompanying law school debt.
Still, when we polled you last week, almost 70% of ATL readers who voted said they were in favor of Howrey's $100K-plus-professional-training apprenticeship.
The National Law Journal (subscription) has an extensive piece on apprenticeships (noting two other firms that have instituted the practice -- labor firm Ford & Harrison and Dallas's Strasburger & Price):
These firms are putting new recruits through additional apprenticeship programs that they say will better train their attorneys for life at a law firm and for handling clients. Think of it as the equivalent of a medical residency, only with suits instead of scrubs.
The latest -- and so far largest -- firm to move to an apprenticeship model, 659-lawyer Howrey, announced its program last week. Starting next year, first-years at the firm will get a pay cut -- from $160,000 to $100,000 in base pay plus a $25,000 bonus to pay down law school loans -- and they'll spend a good portion of their time attending classes with partners and shadowing them on client matters. The apprenticeship period will last two years.
Are law students really like medical students, in need of on-the-job training in order to operate in the real world? If apprenticeships become widespread -- which admittedly seems unlikely once the tough economic times are behind us -- should the training at a firm mean one less year in law school? Firm salaries are going down, but law school tuition is going up. Maybe it's time to rebalance.
A round-up of the salaries for BigLaw apprentices, and a poll on how law schools should be reacting to deflating salaries, after the jump.
Oh Charlotte. Oh Queen City. My how global economic crisis denuded your legal industry.
Maybe it is time for a comeback? The Charlotte Observer reports that a legal services firm is poised to hire 100 Charlotte based attorneys:
Unfortunately, we're talking about document review attorneys:
DiscoverReady, which analyzes e-mails and electronic documents for law firms and corporate legal departments, is opening the office on Trade Street uptown in mid-June. The company has already hired about two dozen workers and will hire others in waves throughout the year, said Jim Wagner Jr., DiscoverReady's chief executive officer.
About a third of the positions will be full time; the others will be temporary and contract jobs, he said. Most of the company's workers are attorneys, but company officials are also looking for project managers, office staff and other employees.
All and all, isn't this good news for the Charlotte legal economy? More details after the jump.
The second quarter's Managing Partner Confidence Index is a good news/bad news situation. The good news is that the managing partners at the nation's law firms are more confident than they were last quarter. The bad news is that managing partners overall are still expressing "negative" confidence -- and that could lead to fresh layoffs in over the next six months. The Wall Street Journal Law Blog reports the good news:
The good news: the overall confidence index was up 23 points to 91. We're still in "negative" territory, but only slightly. Summarizes Citi's Mark Costiglio: "Managing partners are much less pessimistic about the broader economy and the legal market, and there's a sense that the worst is behind them."
And the bad news:
The not-so-goods: Expenses. MPs continue, it seems, to fret over expenses, especially lawyer compensation. And that, LBers, could lead to a continuation of the parade of horribles: layoffs, hiring-freezes, salary-cuts and the like.
After the jump, the Managing Partner Confidence Index executive summary points out the ugly news.
Here's an interesting rumor we've heard. We're a little short on details, and we're trying to chase down additional confirmation. We thought we'd toss it out as a blind item and solicit the missing information from you, our readers.
This is what we're hearing. One large law firm is so hard up for work that it is starting to give some summer associates what we'd call "fake work."
To be sure, much of the work given to summer associates, in any economy, is make-work -- e.g., write a memo to file on a legal issue that will never actually arise in the litigation. But this isn't mere make-work; it's fake-work. Summers are being given assignments for projects that have already been completed. For example, summers are being asked to draft research memos for briefs that have already been filed. And, interestingly enough, multiple summer associates -- but located in different offices of the firm, to reduce the likelihood of their comparing notes -- are being given the same fake-work assignment.
What are the advantages of this approach? After the jump.
This isn't going to come as a galloping shock to most people, but it turns out that the firms that are making the most profit aren't feeling the need to defer their incoming first year associates. Am Law Daily reports:
The only top ten firm that is making deferrals mandatory this year is Schulte, Roth & Zabel, which is requiring all new associates to start in 2010.
But the rest of the top ten most profitable partnerships are taking a different path. Wachtell, Lipton, Rosen and Katz; Quinn Emanuel Urquhart Oliver & Hedges; Boies, Schiller & Flexner; Sullivan & Cromwell; Paul, Weiss, Rifkind, Wharton & Garrison; Kirkland & Ellis; and Cleary Gottlieb Steen & Hamilton are starting all of their associates next fall as originally scheduled.
Congratulations to the incoming first years lucky enough to be heading one of these firms in the fall.
But it's time to learn an important lesson about the difference between "revenue" and "profit."
According to the NLJ, despite all the hits the Chicago legal market has taken during this recession, the city is in an expansionary mood:
While law firm expansion has slowed in Chicago during the recession, particularly compared to the accelerated growth in the prior five years, many national firms that set up shop in the city since 2000 are still looking to add lawyers. Efforts to recruit partners with business has been a constant, but firms in the past month have started to look for associates in certain practice areas, including finance, banking, litigation and bankruptcy, said Amy McCormack, who leads the Chicago recruiting firm McCormack Schreiber.
Does that include Kirkland & Ellis? Let's take a look inside (its new offices), after the jump.
Some of you have probably seen this already. It went up on YouTube in 2007. But we came across this today, and it made us terribly nostalgic. And not just because Cyndi Lauper always had a better voice than Madonna.
Remember when billing hours was cause for a somber ballad about the difficulties of being a lawyer? Now, hours are like a Hazmat suit in the middle of nuclear winter.
We regularly receive tips about educational or charitable events that might interest our readers. Because we don't have the ability to give shout-outs to all, and to ensure equal treatment, we direct everyone with events of a non-commercial nature to mention them in our Community section (which, by the way, is overflowing with openings for deferred associates right now).
(The Community section is for non-profit events or opportunities. If what you're trying to promote is commercial in nature, please advertise. Commercial postings will be pulled from the Community.)
Our rule against event promotion admits of exceptions. We will mention events featuring significant participation by Above the Law editors -- like this one, taking place this coming Tuesday, July 16:
Breaking Back into a Large Law Firm: How to Make Your Way Back into a Top Law Firm
Moderator: BRIAN DALTON, Managing Editor, Vault.com and Editor Vault Guide to the Top 100 Law Firms
Speakers: DAVID LAT, Founding Editor, AboveTheLaw.com; T.J. DUANE, Principal, Lateral Link; HELEN LONG, Director Legal Recruiting at Ropes & Gray LLP; JOHN J. CANNON III, Hiring Partner, Shearman & Sterling LLP.
The panel is part of an a day-long conference, co-sponsored by the New York City Bar and Vault, with the following mission:
Affected by the current financial crisis, many lawyers are finding themselves looking for employment. This program is designed to assist job-seeking attorneys in learning how best to market themselves whether they are looking to go to a firm, start their own practice or are considering an alternative legal career.
For details and registration, click here. Hope to see you there!
Wednesday, June 10, 2009 11:06 AM - By Elie Mystal
Remember the days when junior associates thought that work-life balance was important? Remember when people thought that law firms could be forced to change to accommodate associates who wanted to be lawyers and have personal lives?
Those days are seemingly over. An interesting post on Law21 suggests that the quest for work-life balance (WLB) is pretty much dead:
[T]he market has changed just a little. After 10,000 lawyer and staff layoffs at large US and UK firms, even the most active WLB boosters have toned down talk that might earn them the dreaded "entitlement" label. Articles and posts that reference the term "work-life balance" now do so in an environment of cold pragmatism: Ashby Jones at the WSJ Law Blog and Dawn Wagenaar at The Complete Lawyer provide good recent examples. Realist observers like Dan Hull and Scott Greenfield have gained the upper hand in the WLB discussion -- check out this slam-bang debate at Legal OnRamp about "work-life balance" generational expectations.
We have mentioned before that law students and junior associates have lost any kind of leverage over law firms. People are desperate for jobs, and firms feel they can pretty much do what they want. But some people think that the work-life balance attempt was doomed to fail:
Where proponents of "work-life balance" went off-track, to my mind, was that they argued the duty to ensure a satisfactory proportion between a lawyer's work and the rest of her life was an institutional responsibility -- that it was up to the law firm, basically. The firms disagreed, and all they had to do was wait for the marketplace to turn their way to make that clear.
Law firms aren't going to unilaterally change their business models for the sake of WLB. No law firm ever budged an inch on its billable quotas or offered associates more money and perks because its partners genuinely felt they should be nicer employers -- appeals to conscience at partners' meetings don't have a roaring record of success. Firms change their working conditions as the talent market dictates. In a seller's market like the one we've just had, they play nice; in a buyer's market like this, they don't.
But just because the movement towards better working conditions has been stalled, it doesn't mean that many young lawyers don't still need better working conditions.
Let's remember how this all got started, after the jump.
We want you here as long as it makes sense. -- Fictional Firm Chairman
What does that mean? -- Fictional Junior Partner
It means you're here until you're not. -- Fictional Firm Chairman
Those are lines from a bit of YouTube fantasy porn for BigLaw attorneys frustrated by the way their firms are treating them during the economic downturn. The video ends with the junior partner telling the chairman that he feels unappreciated and that he's leaving.
If you can't play with the BigLaw boys, then move along.
A legal marketer in New Jersey was hired by an unnamed mid-size firm to create a video to help with the firm's lateral recruitment. It features a young BigLaw real estate partner, named Steve, meeting with his firm's chairman to seek guidance. The chairman, who calls the partner Gary throughout the meeting, is not especially sympathetic to the younger lawyer's recession-induced crisis:
JUNIOR PARTNER, STEVE: I've worked so hard to build something here. You wiped the floor with me for eight years as an associate. I am a partner now. I have a book of business, and yet I feel... lost.
BIGLAW CHAIRMAN: Do you have any idea how much billable time we wasted during this conversation? How long were you outside my office lurking like a wolverine of sorts?
According to the marketer Micah Buchdahl, the firm wasn't a fan and declined to use the video. Check it out after the jump.
In this weekend's piece about the White & Case business model, the New York Times noted the law firm, cash-on-hand business model. Yesterday, Kash wrote:
Law firm dons partners generally get loans from banks at the beginning of the year to pay overhead -- rent, associate salaries, etc. As the year goes on, they (hopefully) collect massive fees from clients, paying off the loans (and paying themselves out). Apparently, this is how your local ice cream truck driver -- or maybe cupcake truck driver -- operates his business as well.
Obviously, the model doesn't work when banks aren't willing to lend. But today Am Law reports that JPMorgan is poised to step up its law firm lending practice. The move could result in additional lines of credit open to law firms:
JPMorgan Chase is beefing up its profile in lending to the legal industry. The bank has hired the former head of Citigroup's law firm group.
Lester Pataki, who led the legal industry specialty group in Citi's private bank arm, is joining JPMorgan as the national practice leader and chairman of its law firm group, the bank announced Monday. JPMorgan says it hopes to capitalize on Pataki's strategic skills to help it boost its presence in the area.
Isn't JPMorgan one of the banks that is doing relatively okay? You can almost hear management committees all across the law firm landscape saying "Gimmie, gimmie, gimmie."
Last month, we mentioned the plans of Chambers and Partners, the U.K.-based publisher of law firm guides, to launch an online guide to U.S. law firms called Chambers Associate. Already well-known for its rankings of top firms in different practice areas -- which firms love to tout in their PR materials, since they're always good news -- Chambers now seeks to supplement its coverage with a resource for law students and laterals.
The Chambers Associate site is now live. Enter a firm's name in the search box to find its profile, or use the advanced search feature to find firms by region, practice area, or some other criterion.
How does Chambers Associate compare to other resources in the market? The field is already crowded, with players such as Vault and the new ATL / Lateral Link Career Center. Editor Michael Lovatt, whom we met at the NALP conference, explained Chambers Associate:
The emphasis we have gone for is away from the Vault prestige ranking model, and toward the notion that there isn't a 'best' firm, rather that an individual's specific interests and ambitions make different firms -- with their various cultures, policies, practice strengths and identities -- the right fit.
Getting law students and lawyers to look beyond prestige, in a profession as status-obsessed as the law, may be a challenge. But at least Chambers has done its homework:
For each firm, we write an overview based on the detailed practice area rankings from Chambers USA, then write 10 sections of editorial based on anonymous telephone interviews with a random, representative sample of junior associates at that firm. It's an in-depth, substantive approach that we think gets under the skin of law firms in more detail than any other publication.
Present company excluded, of course; here at ATL, we pride ourselves on the ability to "get[] under the skin of law firms." We checked out a few of the Chambers Associate profiles, and they struck us as comprehensive, if a bit tilted towards the positive.
Congratulations Am Law 200 firms. You have weathered all the disparaging comments about your cities, your practice, the quality of lawyers that work at your firms. And now, as we stare into the sewage drain of the American legal economy, the Am Law 200 firms are coming out smelling like roses:
Reports of their demise, it turns out, were premature. For years, the regional firms that constitute much of the Second Hundred were told that they were exactly the wrong size: too big to compete with the narrow focus of boutiques and too small to match The Am Law 100's national footprints and marquee names. But last year, as the financial sector began its meltdown, the Second Hundred's slow-growth strategies were vindicated.
While average revenue per lawyer at The Am Law 100 decreased by 1.2 percent in 2008 (the first decline since 1991), Second Hundred firms were essentially flat. And when the Second Hundred's national firms, as well as those in the nation's biggest money centers--Boston, Chicago, Los Angeles, New York, San Francisco, and Washington, D.C.--are left out of the calculations, average RPL growth was 1 percent. In all, 49 Second Hundred firms posted increases in RPL, compared to 42 Am Law 100 firms.
As Bob Sugar might say: "This is a nice moment for you, I'm going to let you have it."
After the jump, more ego-shattering news for coastal, prestige conscious associates and partners.
I've been unemployed for almost a year. I have good academic credentials, but lost my job as a junior-associate in Biglaw before I could develop a highly valuable set of skills. At first, finding interviews for available positions was easy; I just wasn't able to close. But about five months ago, interviews stopped altogether. I haven't even been able to find contract work.
The economic recession is obviously a big part of my problem. But I also feel that part of the problem now is my extended term of unemployment. So my question is: How long is too long? When do I have to accept that I simply will not be a lawyer?
He Who Longs to Measure Time in 6 Minute Increments
Dear He Who Longs to Measure Time in 6 Minute Increments,
The fairy tale that you've concocted for yourself -- that you will never again be a lawyer after T-minus one year of unemployment -- is an homage to the Beast, who despairs of turning back into a prince. From the Beauty and the Beastprologue:
Ashamed of his monstrous form, the Beast concealed himself inside his castle, with a magic mirror as his only window to the outside world. The rose she had offered was truly an enchanted rose, which would bloom until his 21st year. If he could learn to love another, and earn her love in return, by the time the last petal fell, then the spell would be broken. If not, he would be doomed to remain a Beast for all time.
As the years passed, he fell into despair, and lost all hope. For who could ever learn to love a Beast?
You have one year to receive True Love's Kiss and clinch that "awesome" associate job before the enchanted rose's last petal fell and seals your fate. After one year, you are to remain a Beast forever, hideous to law firms and vile to any employers other than traveling circuses and minstrel side shows. The End.
If really believe that you've been out of the law firm game for "too long," what are your other options? Living as a hermit by the sea? If you have another dream career, by all means pursue it, but if you really want to be a lawyer, you can be one again, even if you've been out for a year. This economy is like the Mayer Brown swine flu outbreak -- if you make it out alive, you're expected back at the office. Law firms will have a hard time rejecting applicants based on gaps in their resume alone, when talented and bright laid-off attorneys will comprise a huge chunk of the applicant pool. Patience, Iago. The last petal has not fallen and Elizabeth Halverson has not sung.
Performance reviews have never been fun exactly. But these days, when firms are periodically going on "cleanses," the review process is more nerve-wracking then ever.
We are receiving anecdotal reports of associates who have always received good reviews suddenly being criticized for ridiculously trivial infractions -- perhaps to lay the groundwork for a future performance-based dismissal. We are also hearing about reviews being moved up in time at some firms, presumably to accelerate the process of stealth layoffs.
In the worst-case scenario, you may learn that your performance is not up to par and you're being let go (as happened to approximately 40 Ropes & Gray attorneys during spring performance reviews last week). One of the victims of Ropes's performance-based firings wrote to us:
First, the idea that this is "performance based" is ridiculous. I received a good December review, got a bonus, and all of the partners I work with have been uniformly shocked that I was on this list (the partners were not informed in advance which associates were being let go, and the onus has been on the associates to inform them -- awesome).
The only comment in my review this time around was a vague reference that I was unlikely to make partner....
Indeed, that does seem unlikely now.
An attorney at another firm writes:
During this review period, at least four female associates (including myself) were told that we are not "assertive" or "confident" enough. All four of us are strong, hardworking women, whose only bad comment on the reviews was that we are not aggressive enough.
Well, at least she was proactive enough to write ATL about her firm's dubious review process.
Have your performance reviews changed from perfunctory to terrifying? Do you fear that seeds of criticism are being planted now in order to justify a performance-based firing later? Are you getting new kinds of criticisms?
We invite paranoid speculation in the comments. We especially welcome the leavening of humor -- so if some of the review criticisms you've received are so silly or stupid as to be laughable, please do share them. Thanks.
Just to be clear, the first quarter of 2009 was not the beginning of the great recovery everybody is hoping for. AmLaw Daily reports that Q1 revenue fell on average at 175 law firms:
They were right to be concerned. Citi's first-quarter 2009 Flash Report indicates that revenues at the 175 firms that provided data were down 3.7 percent from first-quarter 2008, a period that was not particularly robust. Demand at those firms declined 6 percent from year-previous levels. The first-quarter 2009 Flash Report includes results from 71 Am Law 100 firms, 50 Second Hundred firms, and 54 smaller firms.
Citi Private Bank provides financial services to more than 600 law firms in the United States and the United Kingdom. Each quarter, the Law Firm Group confidentially surveys firms in The Am Law 100 and the Second Hundred, along with smaller firms. In addition, we conduct a more detailed financial survey. These reports, together with extensive discussions with law firm management conducted on an ongoing basis, provide a comprehensive overview of financial trends in the industry and insight into where it is headed.
Even more disturbingly, the revenue drop was more pronounced at top firms than the rest of the sample:
On a more granular level, our most recent data shows that Am Law 100 firms were hit harder than the broader sample: For them, revenues and demand fell 5.0 percent and 7.0 percent, respectively (versus 3.7 percent and 6.0 percent for the full sample). In fact, Second Hundred firms actually saw a modest increase of 1.1 percent in revenues and a smaller drop of 1.8 percent in demand. Clearly, those firms with heavy reliance on transactional work and clients who are more heavily weighted in financial services are feeling the pain more deeply.
This seems like a good time to mention that, over the same period, tuition costs at top law schools dropped dramatically stayed exactly the same. As Kanye West might say: "law schools don't care about broke ass graduates suffering through the worst economic crisis since the Great Depression."
You're going to love the proposed remedies to the decline in revenue at law firms. Details after the jump.
The ABA Journal addressed a question that is near and dear to the hearts of many associates: How do you deal with a partner that is a big, bad meanie? The story comes from a weekend Wall Street Journal article on handling interoffice bullies. Apparently, a Jones Day associate had the perfect tonic for her blustery boss:
Chelsea Grayson, 37 years old, was an associate at the law firm Jones Day in Los Angeles when she was placed on a series of deals with an ornery senior partner. "He was very intimidating," she says. "He'd give me these unrealistic deadlines, saying sarcastically that there were 24 hours in a day. He never smiled, and I just thought he didn't like me."
Ms. Grayson resolved the situation by making an effort to look at it from the senior partner's perspective. Nearing retirement, he was under pressure to train the next generation of lawyers while making sure key clients were always happy. "Once I understood his motivation, I decided to take responsibility for changing the dynamic," she says. "I demonstrated interest and enthusiasm whenever we'd interact, and eventually he became my mentor."
Something tells me that Ms. Grayson managed this magic trick before the economy went into the tank. Are there strategies that are more relevant to the Great Recession for dealing with mean bosses?
A Cleary Gottlieb partner thinks that an automated "out-of-office" reply send the wrong message to clients. AmLaw Daily reports:
Raj Panasar, a partner in Cleary's London office, apparently sent an e-mail to London-based lawyers suggesting that they should always be available to answer e-mails or at least arrange for a colleague to answer messages when a lawyer is truly unreachable. The only time an "out of office" reply might be acceptable is when a lawyer is on a long flight, Panasar wrote.
Umm ... wtf?
[T]he "out of office" reply should indicate which time zone the lawyer is traveling to and when he or she will be able to respond to the message. At The Am Law Daily, we find that such detailed "out of office" messages are already typical among oft-traveling partners, but we had never heard of a near-blanket prohibition on "out of office" replies.
On the one hand, Cleary hasn't cut or frozen salaries or gone through a round of mass layoffs. We imagine Cleary attorneys are willing to go the extra mile to serve clients in this market.
On the other hand, what kind of crazy, self-important, gunner-emeritus do you have to be to think that a client cannot process the line: "if you have a pressing question, please contact [Name], [email], [phone number]." Maybe Mr. Panasar is only "truly" unavailable when he is fighting with the flight attendant about the relevant FAA regulations. But the vast majority of people -- partners or associates -- are not in the best frame of mind to answer pressing work questions when they are trolling for recent divorcees on Grand Cayman. Aren't you serving your clients better by directing them to attorneys that are in the office and capable of responding in real time, instead of handling it yourself while you are distracted by other vacation activities?
Unless Panasar thinks lawyers shouldn't ever take a vacation in the first place? But I don't think Cleary is going to put that in its fall recruitment brochure.
Biglaw firms have been talking about moving away from lockstep since the start of the recession. Orrick's Managing Partner, Ralph Baxter, has been talking about it since before the recession. 
Continue reading "Orrick Ends Lockstep"
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Here's an interesting rumor we've heard. We're a little short on details, and we're trying to chase down additional confirmation. We thought we'd toss it out as a blind item and solicit the missing information from you, our readers.
Performance reviews have never been fun exactly. But these days, when firms are periodically going on "cleanses," the review process is more nerve-wracking then ever.
