On Monday, Mark Herrmann wrote an interesting article explaining why major law firms hire many law school graduates to fill a starting class of associates and choose one, two, or none of that group for partnership. If this sounds like your typical corporate pyramid scheme, it is. And it’s a scheme that most of us would willingly enter if given the opportunity.
But he notes that many small law firms tend to hire a few select lawyers and train them instead of relying on the Biglaw attrition model. He wonders if small firms have some “secret sauce” that Biglaw does not know about.
When it comes to hiring associates (and employees in general), solos and small firms plow through associates as well. But they do it for different reasons, which comes with their own problems. And they’re tired of it.
What Even Is AI ‘Competence’? It Depends.
Takeaways from a Legalweek panel on evolving malpractice risks.
First let’s talk about how solos and small firms try to separate the good lawyers with potential from the bad. In short, they have a harder time. The cream of the crop of law school graduates have been poached by Biglaw and federal judges, or landed at a prestigious non-legal firm offering one of those unicorn JD Advantage jobs that doesn’t pay minimum wage or involve drudge work. So small firms have to choose among the leftovers from the vast wasteland of applicants that didn’t make the cut at OCI. They have to look carefully at their résumés and their internet presences not only for red flags, but for anything that might indicate potential.
You see, solos and small law firms can’t rely on the attrition model because they don’t have the money or the business structure to do it effectively. They can’t afford to hire multiple fresh grads from top law schools with six-figure starting salaries, observe them, and place them in gladiator matches for a few years to see which ones will work out and which ones won’t. Also, it is harder to bill out an associate’s hours to clients because small-firm clients generally are broke or tight-fisted. And most small firms use flat-fee models, so associates are incentivized to finish a case as soon as possible so they can work on the next one or do something more productive with their time.
What this means is that associates can only be given so many raises and promotions before they become unprofitably good. Somebody will have to bring in additional business in order to pay the associates or raises will end. If business drops, then associates will have to either accept a massive pay cut or get laid off. And once their income plateaus, then they may start to look elsewhere.
Which brings me to the next problem: loyalty. Associates with experience (and lots of student loan debt) are likely to be thinking about upgrading. If they got their start at a small firm, they may be making plans to lateral to a larger firm. Who can blame them for wanting to work in a real office as opposed to a solo’s makeshift associate office that was once a broom closet? We’re constantly being told that we’re responsible for our own career advancement. But this means putting silly things such as loyalty on the back burner.
Opus 2 Steps Up Its AI Game With Acquisition Of A Legal Tech Startup
With the addition of Uncover’s technology, the litigation software is delivering rapid innovation.
And some associates might just jump ship and set up their own practice. It’s hard for a Biglaw associate to start a similar Biglaw practice, particularly getting Biglaw clients. But for small-firm practice (family law, immigration, litigation), it does not take a lot of overhead to get started. But despite the relative simplicity, hanging a shingle is not something many associates feel comfortable doing unless they have been in practice for a number of years. Most 0Ls went to law school with the goal of becoming highly paid employees.
Finally, some solo and small firms have high turnover because they run unethical operations or are run by evil people. In Biglaw, there are countless stories of tyrannical partners abusing their associates, but at least their associates are paid well enough to suck it up and perhaps pay for a therapist. At small firms, when your work environment has the wrong combination of low pay and high tempers, it is an easy decision to quit.
So are solo practitioners and small law firms better suited to the “hire for the long term” approach? Of course, the answer will vary because every firm is different. But in a very general sense, no. First, I think just about everyone accepts that the cradle to grave job no longer exists. Business owners want to maximize profit and will lay off expendable associates if they no longer need them. Employees want to maximize their income, gain experience and enjoy life, so they will move to a firm that offers a better lifestyle package. Also, the world economy is quickly and constantly changing with disrupting technology. This can create great uncertainties for legal work, which means that a steady position is hard to get and hard to keep.
So to answer Mark’s question, small law does not have a secret sauce when it comes to hiring. In fact, they might even be missing a few ingredients as well.
Earlier: Plowing Through Associates, And Proud Of It
Shannon Achimalbe was a former solo practitioner for five years before deciding to sell out and get back on the corporate ladder. Shannon can be reached by email at [email protected] and via Twitter: @ShanonAchimalbe.