Plowing Through Associates, And Proud Of It

I spend my life rooting around for material for this silly column. (See? I do it all for you.)

So, over lunch last month with several partners at a big international firm, I mentioned that “human resources” is a very different concept at law firms and corporations. (I’d broached that topic in this column before, but apparently my lunch dates weren’t intimately familiar with ATL.)

I explained that, as a partner at a big law firm, if an associate gives you crappy work, you just pluck the associate out of your life: You never again ask that associate to help you. There’s no need to train the associate, or work with him, or even speak to him again. You just eliminate him (from your life).

In contrast, as a senior lawyer at a corporation, you have six or eight “direct reports” assigned to you. If one of your direct reports hands you bad work, you can’t pluck the person out of your life: The person will continue to be your direct report until you (or she) is fired, promoted, quits, retires, or dies. You can’t pluck the person out of your life, so you’re forced either to fire the person (which seems pretty merciless, if it can be avoided) or do some “coaching.” You must actually train people.

Thus: Lawyers at big law firms can abandon their young; in-house lawyers must educate their young.

Where’s the justice in that?

One of my lunch dates explained why this dichotomy makes sense: “At a corporation, you’re hiring employees for the long haul. If you hire a new lawyer, you’d like that person to stay with you for many decades. At our firm, we don’t work on that type of retention model; we work on an attrition model. After four or five years, it’s pretty obvious which associates are good; after eight or nine years, we promote those people to the partnership. We affirmatively want everyone else to leave. We count on attrition.”

Ha! My lunch date paid off: I got a blog post out of it (not to mention a fine Cobb salad).

What this fellow said is of course true: A typical big firm will promote one out of ten (or 20, or 50) new associates to partnership after a decade with the firm. And the firm will rely upon the remaining 90 percent of folks to move on (or be pushed out). But isn’t that insanity?

On the one hand: No, it’s not insanity. It’s terribly hard to tell from an interview whether a recent law school graduate will be a great lawyer. Big firms use law school grades to sort the wheat from the chaff, but grades are a mediocre reaper/thresher: People with great grades are not consistently great lawyers, and folks with bad grades are not uniformly terrible. Grades may be a helpful predictor of future performance, but they’re no more than that. If you believe (as I do, because I’m a curmudgeon) that most lawyers are mediocre, and that it’s very hard to find great ones, maybe there’s no easy selection process to tell who will be good and who bad. Maybe you really have to work with lawyers for several years to get a sense of this.

That might explain operating on an attrition model: Hire a bunch; keep a few; discard the rest. It’s the only way to build a great firm.

If that’s true, however, then other things make no sense: Why are big firms hiring lateral partners based on a day or two of interviews? Do the firms no longer care about quality at the partner level, because a big book of business offsets a presumed lack of talent? Or perhaps lawyers at the firm actually worked with the lateral over the course of a long case, and those lawyers can vouch that the inbound lateral is great? (Even if that’s true for some lateral hires, I guarantee you it’s not true for all of them. Look at the number of lawyers moving between firms these days.)

The illogic doesn’t stop there: If it’s not possible to tell a good lawyer from a bad one at the hiring stage, then how do corporations hire good lawyers? Corporations do not run on the attrition model: Corporations hire a relatively few folks and expect them to hang around. Does that mean that all (or many) in-house lawyers are terrible, because it wasn’t possible to distinguish the good from the bad during the hiring process? Does it mean that corporations can’t tell the difference between good lawyers and bad ones? That in-house law departments generally suck?

And what about other hiring processes? Big law firms are hiring finance people, and IT folks, and librarians, and many other “support” personnel. Law firms don’t run through those people on the attrition model. Are firms really able to tell good finance people from bad during an interview, even though firms can’t do the same for lawyers? What’s unique about lawyers that explains this? Or do firms not care about the quality of their non-lawyers? (“The IT guy sucks, but that’s life. Maybe all IT guys suck. Anyway, we’ll just live with it.”) In any event, firms are not hiring 10 IT guys, firing 9, and then retaining only the one good one. Firms apply the attrition model to lawyers alone.

(I suppose law firms aren’t alone on this score. The big management consultants hire the masses as baby consultants and promote only the few to partnership. And the big accounting firms are the same. But it does seem a little odd, doesn’t it?)

Maybe big firms don’t care that they’ve hired a bunch of incompetent lawyers: “Someone has to do routine discovery, conduct legal research, and otherwise bill time on inconsequential tasks. We need a bunch of incompetents around here; otherwise, how would we bill enough time to generate a million a year in PPP?”

I don’t believe that for a minute. (I know that the preceding paragraph was red meat for the “commenters,” who will say that big firms don’t care about the quality of their associates. Those comments prove only that commenters at ATL were never partners at big firms.) When I was a partner at a big firm, I cared dearly about the quality of associates handling discovery or legal research on my cases. If we botched discovery responses or misanalyzed cases, we’d lose matters that we should have won. Clients don’t pay you 15 bucks a minute to lose.

Curiously, unlike the large firms, many small law firms don’t rely on the attrition model. Small firms often hire a relatively few lawyers who the firms believe will be good, train those lawyers, and promote many of them up through the ranks.

What’s up with that? Are the small firms uniformly terrible, so it doesn’t matter that they’ve hired and promoted incompetents? Or have the small firms found some secret sauce that hasn’t yet made its way to their larger brethren?

I understand that big firms have been hiring and promoting on the attrition model for decades, and very few are trying to break that mold. But maybe a clever firm could think harder about this. As a pure thought experiment, it sure seems that a law firm could profit by (1) identifying stellar lawyers during the recruiting process, (2) hiring those stellar lawyers and nurturing them over time, (3) promoting those stellar, well-trained lawyers to partnership, and (4) relying on other, cheaper outfits — e-discovery vendors, document management firms, and the like — to handle the tedium.

That sounds like a pretty good law firm, giving its lawyers interesting professional lives and its clients good value for their money.

Or maybe not.

Either way, I sure did like the Cobb salad.

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Mark Herrmann is Vice President and Deputy General Counsel – Litigation and Employment 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].