Building a Better Legal Profession :: The Old Blog


“The Real Losers Are the Associates” by refirm2007
August 15, 2007, 6:49 am
Filed under: Law reform

Since January, many large law firms have raised salaries of first-year associates to $160,000 (not including the bonus).  And there are rumors of even steeper increases in the near future, pushing that salary closer to $200,000.

But who pays for that?   There are only a few options.  Either partners pay for it themselves (a likely story, right?), associates work more hours, or clients get stuck with a bigger bill. 

Law students are concerned about working more hours on top of already-high billable expectations.  So it’s nice to see clients speaking out about the effect of the pay hike on them:

But in trying to keep fresh talent coming through their doors, law firms have created some resentment among corporate clients who want to stop their legal dollars from flying out the window.

“At some point, we’ll say we don’t want any associates on our matters,” said Steve Hantler, DaimlerChrysler A.G.’s assistant general counsel for government and regulatory matters.

Uh-oh.  Many of us go to law firms — at least in part — for the training opportunities.  But students don’t expect to be taken off of matters because we’re too expensive.  Are we really being billed out at rates clients can’t accommodate?  Should law students take this into account when choosing a firm?

Clients also fear a major impact on associate life and attrition:

Susan Hackett, general counsel for the Association of Corporate Counsel, said that she is “very angry” about the recent raises. Besides the increased resistance that clients may exert in paying for associates to work on their matters, she also predicts heightened billable-hour expectations from firms to cover the costs of the increases. Such expectations will lead to bill padding, she fears.

Hackett said her concerns go beyond the cost of services to corporate counsel. She worries about the impact that high salaries may have on the profession in general.

“The real losers are the associates,” she said.

She is concerned that higher billable requirements will worsen an attrition rate that reaches nearly 80 percent by the time associates are in their fifth year of practice at large firms, according to NALP, a Washington-based nonprofit group that tracks jobs in the legal industry.

Finally, what about associate satisfaction?  The article suggests that “higher pay may well intensify already high anxiety levels among associates.”   There’s a disconnect here: law students aren’t “anxious” about making more money.  The connection between more money and more billables may be known on some level, but it isn’t strongly felt, even if it matters a great deal to associates. 

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