William D. Henderson

Musical Chairs

Is lateral partner hiring a game of musical chairs that law firms can’t win? Anecdotes about unsuccessful lateral hires abound. You hear stories about high-profile partners moving from Firm A to Firm B, often lured by huge guarantees, only to leave Firm B a few years later, after failing to integrate or deliver the expected business.

And some of the most successful firms in all the land, places with immense prestige and sky-high profits, do very little lateral hiring. Their refusal to engage in the lateral market hasn’t seemed to hurt them.

When it comes to lateral hiring, should firms “just say no”? Well, that’s not what’s actually happening in the marketplace. Last year, lateral partner hiring climbed, suggesting that it must be working out — at least for some firms….

double red triangle arrows Continue reading “A Closer Look at Lateral Partner Hiring”

We are going through a revolution in law with a time bomb on our admissions books. Thirty years ago if you were looking to get on the escalator to upward mobility, you went to business or law school. Today, the law school escalator is broken.

William D. Henderson, a professor of law at Indiana University (Maurer), commenting on the rigor mortis that’s quickly spreading now that everyone’s fantasies of fame and fortune in the once storied legal profession have died.

(Enough doom and gloom. What are law schools planning to do about it?)

double red triangle arrows Continue reading “Quote of the Day: The Law School Dream Is Dead”

100 dollar bill Above the Law Above the Law law firm salary legal blog legal tabloid Above the Law.JPGThe American Lawyer’s 2007 Associates Survey is now available, via Law.com. Good stuff!

A summary of the survey’s key findings, by editor-in-chief Aric Press, appears here. The WSJ Law Blog collects additional highlights here.

It seems that ATL readers and law firm consultants aren’t the only ones predicting pay raises in the reasonably near future. From Aric Press’s write-up, here’s the money quote (hehe):

This year’s famous hike to $160,000 in starting pay for first-year associates did not buy hiring firms anything in terms of separating themselves from their competition. The firms that can afford to pay more will pay more; but there is a price point that not all Am Law 200 firms will be willing to match. We’re confident that that number begins with a 2.

What Press describes is similar to this excellent analysis, by Bill Henderson of the Empirical Legal Studies blog:

[T]he Big Law market is the midst of a “separating equilibrium”. In short, a few dozen elite firms are pulling away from their BigLaw peers in the competition for premium, price-insensitive work….

So what does the future look like? BigLaw will no longer be synonymous with “large full service firms”, which was the mantra throughout the ’90s. Successful financial services and labor & employment lawyers will tend to migrate to different firms [i.e., super-lucrative and less-lucrative firms, respectively].

In terms of leading New York firms — the shops with big-time transactional practices, and profits per partner of $2 million or more — we’d speculate that a move, to a starting salary at or close to $200,000, will happen in the next twelve to eighteen months. If it doesn’t happen in time for this fall recruiting cycle, it will happen in time for the next one.

The foregoing analysis assumes, of course, that U.S. law firms chug along nicely over the next year or two. If we have a general economic meltdown, then all bets are off.

Annual Survey Shows the New Reality of Associate Life [The American Lawyer]
Associate Survey: Want to Leave? Big Law’s OK With That [WSJ Law Blog]
Howrey Associate Pay Scale: What Merit Really Means [Empirical Legal Studies]