Legal Secretaries

Bruce Stachenfeld

“Low overhead is great!” That is one of our sayings. We recite it all the time — yes, even out loud at meetings — as it is a powerful competitive advantage for a law firm. It seems pretty obvious, but if so, why doesn’t everyone get with this concept?

There is a term informally used to describe how overhead impacts a law firm called “Implied Overhead.” The “Implied Overhead” of a law firm is the cost of everything except the lawyers divided by the number of lawyers. So if you have 50 lawyers and the cost of “everything” except the lawyers is $10,000,000, then you have implied overhead of $200,000 per lawyer.

Our Implied Overhead for last year was about $165,000. Anecdotally I believe that Implied Overhead for major law firms averages about $300,000. (I admit I don’t really have this data for sure; it is just what I have heard.) If your firm has 100 lawyers and implied overhead of $200,000 and the average for major law firms is $300,000, then you have a $100,000 per lawyer competitive advantage over your major law firm competition. Multiply that by 100 lawyers and you just made $10,000,000! And this flows right to the bottom line! If there are, say, 30 partners at this firm, then each partner just got a check for $333,333!

Yikes — did I do that math right? Was that $333,333 per partner merely by reducing the implied overhead?  I just double checked and $10,000,000 divided by 30 partners does indeed equal $333,333. That’s a sizable number, so maybe you should read the rest of my article….

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Ed. note: This is the latest post by Anonymous Recruitment Director, who offers an insider’s perspective on the world of law firm hiring.

In my last column, I offered advice for summer associates. Today I’ll return to the mailbag and answer questions received from readers by email.

Today’s topics: paraprofessionals and legal recruiters. As always, please note that these are simply my personal views on the questions presented.

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On our recent post about bonuses at Bingham McCutchen, some commenters complained about our coverage of the firm. Here’s what one said: “What this article fails to mention is that NO ONE made their hours, it’s THAT slow. Good job, ATL, for eating whatever it is Bingham pays you to NOT report [on bad goings-on at the firm].”

Actually, we’re perfectly willing to report on negative developments at Bingham (or any other major law firm). Just email us or text us (646-820-8477), and we’ll investigate.

There’s certainly a lot to cover over at Bingham: tumbling profits, partner departures, and unfortunately timed staff layoffs. We’ve collected some reporting from around the web, which we’ve combined with inside information from ATL tipsters at the firm. Let’s have a look, shall we?

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I’ve got better things to do than be in the office right now.

Last week we shared with you 7 Ways To Kill Time While Working At A Law Firm. It was a slightly tongue-in-cheek post, a subtle send-up of “listicles” like 10 Reasons To Leave Biglaw.

But as it turns out, as reflected in our traffic stats and in various messages sent directly to us, people actually want to learn about methods for staying (or looking) busy while they put in their law-firm face time. Does this mean work is slow? All these unused billable hours don’t bode well for bonus expectations this year.

Anyway, here you go: 7 more ways to kill time while working at a law firm….

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Tied up in the office? You might as well make the most of it.

As the old saying goes, time is money. And in the land of law firms, where the billable hour is king, the saying is literally true. The pressure to churn that bill, baby rack up thousands and thousands of hours is one of the toughest aspects of legal practice. It drives lawyers towards drink and away from their families. (See reasons #7 and #8 of the 10 Reasons To Leave Biglaw.)

But what if you have the opposite problem? In some ways, not having enough in terms of billable hours is worse than having too much. If you’re billing, say, 75 hours a month as an associate, you could find yourself in the breadline before too long. (Partners have more leeway, but even they are hungry for hours nowadays.)

If you’re stuck in the office with nothing to do — and this applies not just to lawyers but to support staff, who are getting laid off partly because there’s not enough for them to do — how should you pass the hours? Here are seven suggestions….

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Back in 2011, we wondered if on-shore outsourcing was the Biglaw wave of the future. Given the recent cavalcade of “adjustments,” “reductions,” “reorganizations,” and “eliminations” affecting staff headcount at firms across the country, we think our prediction may be coming to pass.

These days, despite news of record numbers in terms of gross revenue, it seems we can’t even make it through one week without news of layoffs coming from within Biglaw’s hallowed halls. In fact, last week brought even more lamentable news from large law firms (on top of the double-digit IT outsourcing at one top firm).

Which Biglaw firm is pink-slipping employees en masse in favor of outsourcing this time?

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Of all the different Biglaw constituencies, legal secretaries have probably suffered the most in terms of recent layoffs. In this technological age, lawyers do their own typing, don’t give dictation as much, and can use voice-recognition software when they do. Shorthand isn’t as valuable a skill as it used to be.

So what should a legal secretary facing a voluntary buyout or an involuntary layoff do with himself? Assuming he’s not ready to take the money and run (or retire), he should find new employment. And that might require obtaining new skills, ones that are in greater demand in 2013.

Some might tell a displaced legal secretary, “I just want to say one word to you. Just one word. Technology.” If technology taketh away jobs, it can also giveth, right?

Well, not so fast. Even techie types are getting laid off, as the latest layoff news demonstrates….

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You’d probably pack up too if you were in this secretary’s shoes.

Voluntary buyouts for support staff are going viral within Biglaw — and that’s a good thing, at least compared to the alternative of layoffs. As we’ve previously observed, “voluntary retirement programs allow employees to self-select, so that employees who are well-situated to enter unemployment can opt in, while employees who need their jobs badly can keep working.”

Whether you should accept or decline your firm’s buyout depends on many factors. What kind of savings or other assets do you have? How generous is the package being offered? Do you have a spouse who still works? Do you have dependents who rely upon your income?

We heard from one retired legal secretary in response to our recent request for volunteers willing to discuss why they took or didn’t take a buyout. You can see why this secretary entered early retirement, due to an enviable financial position and a delicious package….

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Say hello to ‘Buyout Box,’ which we use in lieu of ‘Layoff Lady’ when covering voluntary retirement programs.

This past spring, McKenna Long & Aldridge made it into the Am Law 100, the nation’s 100 largest law firms by revenue. McKenna achieved this feat by posting an impressive 23 percent jump in gross revenue.

Now that it’s in the big leagues, McKenna is following the lead of other Biglaw firms by trying to get smaller (and more efficient). Like so many other top firms, it seeks to reduce its secretarial staff through voluntary buyouts….

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Would you pack it all in for generous severance?

Many longtime observers of the legal profession argue that it’s not what it once was and that it’s increasingly focused on the bottom line. But even when trying to improve the bottom line, many law firms go about it in a kindler, gentler manner. Traces of Biglaw’s gentility remain.

Today we have news of another firm that’s reducing its ranks — not through layoffs, but through generous voluntary buyout packages….

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