New Mexico law professor Erik Gerding started off an interesting discussion in the blogosphere with his post, Death of “Big Law School’?, on the Conglomerate.
Ashby Jones at the WSJ Law Blog and Larry Ribstein at Ideoblog have already weighed in.
Gerding’s central thesis is that problems with the Biglaw business model will have major effects on the law school business model:
It would likely mean the end of the law school boom – with its expanding law faculties and the bumper crop of new law schools. Like it or not, the business model (I hate applying that term to legal education, but can’t think of another one) of many law schools is heavily dependent on students getting high paying law firm jobs to pay off high law school tuition. Law firms are also prime benefactors of law school endowments. Without corporate law consuming law school graduates by the dozens, law school will face massive economic pressure.
You’d like to think that. But there is only one way to exert massive economic pressure on law schools, and it is not happening yet.
We receive a lot of interesting emails here at Above the Law. Once law firms started deferring their deferred incoming associates for a second time, we started getting emails like the one below. Since I don’t really know how to respond to the people who have been asking this type of question, I figured I’d throw it out to you guys for your expert advice:
Can you do a story about the size of deferral stipends? Particularly, breaking down the math of expenses showing that some firm’s stipends are too small. For instance, [Redacted] is paying deferred first years only $3300 per month before taxes. After taxes this only comes out to like $2600 per month. Most law students went to expensive schools with $150,000 debt (not to mention undergrad debt), and have $1,000 per month loan payments starting this month even if you select the maximum 30 year repayment plan. Under the 10 year payment plan, loan payments are $1500 per month. When you consider that rent in New York, DC, Chicago, LA, and San Francisco is at least $1,200 (being very very conservative), that leaves no money to pay for things like food or utilities. They expect us to basically spend more than we make for 3, 6, 9, 12+ months? This is practically a layoff. I don’t have the finances or rich parents to go 6+ months with no money. Firms like [Redacted] need to pay at least the market $5,000 per month so that the deferred first years have enough to live on. Especially when our original offer letter promised us “market compensation.”
Is there anything useful we can tell this person (and the other incoming associates in the same position)? Let’s try after the jump.
This shouldn’t come as a surprise to anyone, but the National Law Journal reports that partners are successfully hanging onto their jobs despite this recession.
Associates and “other attorneys” are not:
Law firms since 2005 had increased the number of “other” attorneys — a category comprising counsel, of counsel, senior counsel and staff attorneys — to help handle boom-time business.
But in 2009, they cut about 10% of those attorneys, for a loss of 1,113 lawyers. By comparison, NLJ 250 firms shed 8.7% of associates in 2009. This year, 46 “other” attorneys worked at the average NLJ 250 firm, compared to 50 the year before.
Yeah, it is not a good time to be an expensive senior counsel or of counsel that doesn’t bring in business. On the bright side, at least senior attorneys and counsel have a career track record they can market if they have been laid off.
Staff attorneys cannot say the same thing. Their troubles have been well documented. Staff attorney programs getting pinched because of the recession generally. And the increased reliance on outsourcing is a double whammy to staff attorney job security.
But after the jump, the NLJ reports that partners appear to be safe.
A little while ago, we asked our readers to tell us if their jobs are making them sick. Over 51% of our respondents reported feeling some kind of depression.
I guess that means we have some fantastic attorneys reading Above the Law. A new study from Australia says that general unhappiness has a positive correlation with many of the the skills great lawyers posses:
The study, authored by psychology professor Joseph Forgas at the University of New South Wales, showed that people in a negative mood were more critical of, and paid more attention to, their surroundings than happier people, who were more likely to believe anything they were told.
So the happy idiot is actually a very smart person cursed with a pleasant disposition?
I always thought that being a miserable bastard was a symptom of Biglaw success, not the cause of it:
“Our research suggests that sadness … promotes information processing strategies best suited to dealing with more demanding situations.”
You know how much we love rankings around these parts. But apparently there is a list of law firm rankings out there that actually matters. The National Law Journal reports:
An Association of Corporate Counsel law firm rating system unveiled last month has triggered a lot of interest from the association’s in-house lawyer members, who have submitted 1,500 firm reviews. Lawyers at firms are less enthused. …
Since the ACC initiated its “value index” last month, its members have shared their opinions about the performances of 500 law firms. The ACC has used the mainly anonymous input to rank firms on a five-point scale.
Unfortunately, there is one humongous catch:
The evaluations and ratings are viewable only by ACC members.
Why, Association of Corporate Counsel? Why? Why produce a juicy new list of clients actually rating the quality of legal services they receive, and then keep it private? We all want to know what you think.
Sorry. “All” is probably a little bit strong. Law firm managers don’t seem to like this list very much.
With most associates just trying to avoid joining the growing ranks of unemployed attorneys, partnership prospects might seem like part of a distant and unfathomable future. But in what might be a surprise to associates who have been laid off or suffered salary cuts, many law firms are making a healthy number of new partners. The National Law Journal reports that the overall number of partners nationwide in 2009 is actually higher than in 2008.
If you are a mid-level associate in Los Angeles and you really want the inside scoop on how to grab that brass ring, come to the Career Center Professional Development panel on November 17, hosted by Lateral Link and Proskauer Rose, for a discussion on long-term career planning, partnership prospects and in-house careers. Panelists include Morgan Chu of Irell & Manella, Mike Woronoff of Proskauer, and Vivian Yang, GC at Citysearch. Attendees will receive 1.25 CLE credit hours. Click here to learn more or to register.
We have done a number of open threads on the bar exam as results in various states have been released. Congratulations to all those who passed.
But what about the few, the unhappy few, who did not pass? We know that the pressure was greater than ever this year to pass the bar on the first try. The fear is that people who did not pass the July bar would be summarily shown the door by their law firms. That fear only increases for incoming first-year associates who have been deferred until January and haven’t actually started working yet.
Has the worst-case scenario happened? So far, we have not heard of a firm that decided to fire everybody who didn’t pass the July bar. Do people who failed the bar expect to get one more chance in February? Have the firms communicated at all with those that failed this past bar exam?
It was hard enough for incoming associates to get a job in the first place. Hopefully nobody ruined their employment chances by not passing the bar on their first attempt. Earlier: Prior ATL coverage of state bar exams
We have confirmed the news of a Cravath bonus match with multiple sources at Cleary Gottlieb. One exchange went something like this:
ATL: Any good news today?
CGSH: No. Cravath news. Bonus FAIL.
So the 2009 bonus market is probably going to coalesce around the Cravath-level bonuses — unless S&C shows up and trumps CSM. Stay tuned.
The timing of the announcement is telling. Usually bad news is saved for Friday afternoons, so it gets lost in the pre-weekend shuffle. Did CGSH view its bonus numbers as potentially disappointing to the recipients?
Perhaps. In our reader poll on the Cravath bonuses, a majority of respondents said the CSM bonuses made them either “unhappy” or “very unhappy” (the most popular choice). Approximately 30 percent said the bonuses made them “neither happy nor unhappy.” Under 20 percent said the bonuses made them “happy” or “very happy.”
The Cleary memo and another READER POLL, after the jump.
Lately, Big Law firms have been changing their salary structures more often than associates can keep up with. With an increasing number of firms abandoning lockstep compensation, associates have been left in the dark about what compensation levels actually are.
This week, our ATL / Lateral Link survey asks for your help to track the latest changes to starting salaries and the salary ranges for firms that have moved away from lock-step compensation. We’ll use the information to update the ATL Career Center and bring you the results next week.
If you have information about your firm that you want to share with other Career Center users, please email us at email@example.com.
Incrementally, the pace of layoffs has been picking up. Perhaps firms are trying to get through all of their cuts before the holiday season?
The latest news comes from Day Pitney. A tipster reports:
Day Pitney in CT laid off 30 staff today and moved staff to lower positions.
A spokesperson from Day Pitney confirmed that the firm laid of 29 staff (not 30). The move was part of a staff reorganization and affected staffers in eight of the firm’s nine offices.
No attorneys were laid off.
Let’s check Day Pitney’s layoff history after the jump.
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