Saturday, January 16, 2010

But I Unwrapped So Many Wonka Bars!

According to the New York Times, Law School no longer provides a "golden ticket". Do you find it surprising that the author seems to believe that there's no practice of law outside of Biglaw, and that everybody coming out of law school was getting six figure salaries until the recent crash? If you aren't aware of the two worlds of legal practice, check out the graph provided here, showing lawyer starting salaries from 2007.
While 16% of starting salaries were $160,000, far more, 38%, were $55,000 or less. The first peak in the graph reflects salaries of $40,000 to $60,000, with salaries of $40,000 and $50,000 each accounting for about 10% of salaries. Collectively, salaries in the $40,000 - $60,000 range (approximately the total area reflected under the left peak) accounted for 42% of salaries. Salaries reflected under the right peak, including the smaller bulge over $145,000, accounted for 22% of salaries.
The article observes some trends in law firms - smaller starting salaries, smaller bonuses, promotion based upon merit. The sort of things that weren't part of the picture when larger law firms were able to effectively charge their clients for their training costs, or when the labor market for appropriately pedigreed lawyers is tight. The article notes the trade-off involved - the ridiculous hours that associates at the top-paying law firms typically worked to earn those salaries. And it notes the changes in the attitudes of clients - desire for alternative billing arrangements, such as flat fees, and an unwillingness to pay $300/hour for an associate who is learning on the job. No mention of outsourcing, but that's on the horizon even for biglaw - set up a branch office in India where English-speaking law grads can do grunt work for a fraction of the cost of an associate in the U.S.
One 2008 graduate of a top-10 law school, who worked at a large Chicago firm for a year, said she spent days trying to look busy as business dried up while not billing a single hour, before being laid off last fall along with a quarter of the other first-year hires.

“We used to gather in someone’s office, close the door, and say, ‘I hate my life, why are we doing this?’ ” she said. Like most other young associates interviewed for this article, she asked that her name not be used for fear of jeopardizing her climb up the already rickety ladder of a law career.
It's a rhetorical question - they stay because of the golden handcuffs. Even when they're worried about layoffs, they're staying for the predictability of having a job and a (big) paycheck, not to mention the "prestige and self-identity of being a [Biglaw] lawyer". No surprises there. Another complains,
The worst thing about the field’s contraction, she said in an interview, is that it has walled off the traditional escape route — suffering at a law firm for a few years until you pay off your education loans, then moving onto a lower-paying but comfortable gig as in-house lawyer for a company.
The author of the article actually interviewed a lawyer who, after a relatively short tenure at a large law firm, started her own firm. The author also interviewed a former lawyer who became a psychiatrist about the stress created by the current legal job market. Yet there it is, ingrained into the theme of the article and the minds of many bright young lawyers, that you have to have a job that somebody else gives you.

I found this to be a bit amusing:
It is harder to maintain that sense of esteem now that your contract work is being farmed out to low-cost lawyers in Bangalore, and your client who is splitting up with her spouse can handle it herself with a $31.99 do-it-yourself divorce kit from Office Depot, said David Lat, the managing editor of Above the Law, a well-read blog about the legal industry
The outsourcing affecting larger law firms is interesting to me, given that I have done quite well over the years being the guy to whom smaller firms have outsourced difficult work - premium, not discount, services. There's a difference between writing a brief on a complex legal issue and writing a typical contract, but one thing that remains the same is that you must trust the person to whom you outsource legal work. Betray the trust, and you've lost a client. Do substandard work and it may take your client as long to review or fix it than it would have taken to do the work in-house. That's one of the factors that has slowed down legal outsourcing, but it has long seemed inevitable that some amount of legal outsourcing would occur.

But that second part really caught my eye. The loss of small divorce cases, of course, is much less of a concern to Biglaw than it is to smaller law firms. But really, if your client has so simple a divorce that she "can handle it herself with a $31.99 do-it-yourself divorce kit", shouldn't you raise that possibility with her before she pays you a lot of money for unneeded legal representation?


  1. Great post, Aaron! No one (except lawyers or people who have close lawyer friends) believes me when I say that teaching is more lucrative than law--for me. I was trapped in that $40k arena for all of the years I was in it. A Livejournal pal of mine wrote this great post about the 40/120 situation--you either make around $40k or you may $120k. If you make the latter, of course, the "company store" owns your soul, your time and every inch of your ass.
    I once wrote a law manifesto--which makes other manifestos looks like the Berenstein Bears wrote them, if I do say so myself--that detailed the many problems inherent with the practice of law. One of my issues was what I called the "lowest bidder"...that is, when interviewing with a firm, one usually had to say that one would work X number of hours for Y amount of pay. The higher X and the lower Y = more likely you would get the job. This may be true in any profession, but I know that I had to go through it every time I interviewed.

  2. Shortly after I started practicing law, another lawyer approached me and expressed that he heard that I had been a public school teacher, and wondered why in the world I would quit teaching to practice law. It wasn't hard to see where he was coming from - the upside of legal practice is potentially higher, but (as you know) a great many lawyers work longer hours with fewer benefits for less pay.


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