Article from Corporate Counsel Magazine

Graduate School Law School
1

<p>The following are some exerpts from this article, which provides one perspective on some of the reasons why associates may not stay at the bigger law firms (I think that there are other factors at play, too):</p>

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Big-Firm Associates: Why They Go and How to Keep Them

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Ben W. Heineman Jr. and David B. Wilkins

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<p>n.b. Ben Heineman was the general counsel of GE and is now a senior fellow at the HLS program on the legal profession. David Wilkins is a professor at HLS.</p>

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At the 250 largest law firms, the arrows are pointing up for many associate indicators. Summer internships are up. Incoming associate classes are up. Recruiting costs for both summer and first-year associates, in dollars and in partner time, are up. Salaries are up ($160,000!). Bonuses are up ($50,000!).

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But for all this effort, one critical indicator is down. The larger law firms are reported to be losing 30, 40, 50 percent of associates after three to four years -- with half to two-thirds of the defections due to associate, not firm, choice. Where do they go? Smaller firms, more competitive firms in the same city, firms in other cities, in-house, government, teaching, nonlegal jobs.

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The more important question is: Why do they go? Some associates just wanted to pay off law school debts and had no intention of staying. Others are balancing two careers and need to follow a spouse. Some are lured away by higher-paying jobs in banking, private equity or hedge funds. Or they don't want the Faustian bargain of higher pay for more billable hours and a job that skews the work-life balance too far toward work. Finally, some do not want to stay for the likely "no" four or five years hence at the entrance to equity partner Valhalla -- or don't view it as Valhalla at all.

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Here are some of the problems: </p>

<p>Early in their careers, far too many associates are given a steady diet of drudge work: reviewing documents; reading e-mails; organizing schedules for transactions; researching small, tangential issues. </p>

<p>Associates work on large teams and are not given individual responsibility of any consequence. </p>

<p>Partners may not take time to communicate the overall issues and strategy in a large matter, but just send younger associates off to till a small part of the North 40. Too often the junior associates have to work for senior associates whose goal in life is their own advancement, not the well-being of their younger colleagues.</p>

<p>Partners, who have huge workloads and unceasing pressures to produce, do not spend much time worrying about the professional development of young lawyers nor provide adequate mentoring, education and training. </p>

<p>Firms may not communicate candidly about their finances, their business strategy and the partnership prospects for young lawyers, who are not treated as young professionals but viewed as generators of "rates x hours" for annual revenue models. </p>

<p>Corporate clients are unwilling to take risks on young associates and unwilling to pay their rates, so associates may not have interesting opportunities such as doing important work, meeting with businesspeople, or traveling to depositions, hearings or arguments.

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Big-firm associates, then, may be a lost generation: a cohort of junior lawyers whose initial professional experience is extremely unsatisfying, who are turned off by the traditional rite of passage in a large firm, and who are not developing as legal professionals in the broadest sense of that phrase.

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One cause of this trend, of course, is the inexorable transformation of larger law firms from collegial professional associations to huge business enterprises. Successful partners have to juggle many demands: handling big matters, wooing clients, cross-selling the firm, marketing their efforts through speeches and articles and international travel. With the free agency system that has evolved at the big firms, those partners who are focused on earning top dollar want to boost their billings to increase their compensation. To keep high performers, firms are driven to a preoccupation with profits per partner and leverage. (There is also the catch-22 of firms not investing in young people who they don't think will stay anyway.)

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With multicity "partnerships," a sense of firm identity and community is difficult to develop and associates must depend on a strong identification with, and personal relationships within, a particular practice group. But this specialization may also narrow the vision and experience of young lawyers. Moreover, technology distances partners from young lawyers, due to the ubiquity of electronic communication, yet at the same time allows them to be in associates' faces 24/7.

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Corporate clients also contribute to the problem. With internal pressures to stay on budget, they seek to minimize the billings by, and experiences of, young associates who, whatever their potential, have not yet demonstrated practical skills. This is especially so as associate salaries -- and hourly rates to recover those costs -- escalate to absurd heights, at least in Am Law 200 firms in big cities.

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Senior corporate counsel are also so preoccupied with integrity education and training for the business executives, and business training for the young lawyers inside the company, that they have little sense of obligation to the professional development of young lawyers in their outside firms.

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Ironically, corporations are so busy that they do not hire entry-level lawyers or provide early career legal training for the ones that they use from firms -- they rely on firms to do that. But then companies hire away the senior associates or junior partners and bring them in-house.

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<p>The article then posits a number of solutions, including secunding law firm associates to their corporate clients, doing pro bono work that will give associates more experience, internal professional development (which many of the very top firms already do on a consistent basis), and better communication between partners and associates on firm finances and partnership prospects (I've heard this one suggested every year since I've been practicing, and I have seen little progress). One of the overriding suggestions is that there needs to be more cooperation between corporate law departments and law firms to enhance the development of young associates (personally, I don't see this one every happening either -- corporate law departments will continue to cherry-pick the best and the brightest from law firms for their own practices).</p>

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In the end, the answer is coherent, systematic, up-front law firm investment in young lawyer development programs within the firm, not fancier recruiting restaurants, to develop skilled, energized lawyers who can, and will, provide longer-term value to the firm -- and to the profession.

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2

<p>Sally - thanks for posting this - provided some good laughs for me. I have been in legal recruiting for over 20 years and I've seen a version of this article every few years. I know I'm preaching to the choir with regard to you though. I loved the part that said law firms had transitioned from "collegial professional environments to huge business enterprises." That ship sailed many years ago. When I was with a larger company, part of my job was to speak at gatherings of partners and meet with smaller groups in order to guide them through recruiting and retention. I sounded like a broken record year after year. It's like telling a couple in marriage counseling - "go home and communicate better with each other and call me in the morning."</p>

3

<p>I completely agree with you, cartera. Every year, it seems that law firms like to engage in some self-reflection for about ten minutes, where they they form a committe of associates to discuss issues relevant to associate life and then largely ignore what is voiced in that committee. On the other hand, every ten minutes there seems to be some article written or some study undertaken to look at the reasons why there is so much associate dissatisfaction. </p>

<p>The key to remember is that not every associate is dissatisfied. Yes, many work long, arduous and unpredictable hours, travelling to exotic locales like Rascagoula, Mississippi and Scobey, Montana (no offense to either city, but I had to travel there as a junior associate and, well, let's say that it was interesting), but many find the work interesting and challenging, and they work with a goal in view, whether that goal is at a law firm, in house, at the attorney general's office or elsewhere. Let's call the early years of work at BIGLAW as a means to an end. </p>

<p>At the end of the day, law firms are businesses, and any associate who goes into a business expecting to be coddled in a way that hurts profitability is likely going to be disappointed. In fact, any associate who wants to make partner at that law firm would probably be in favor of keeping the law firm business run tightly, so that when partnership is attained (and we all know how difficult that is to achieve), the prize (well, at least the financial one) is still there waiting. </p>

<p>Occasionally, law firms will make a concession to the fact that attorneys do have lives outside of the office, like the recent moves by a handful of NYC law firms to extend paid maternity leave to 18 weeks. That doesn't mean that the new mom won't have to work 80-hour weeks the moment she returns to the office, but more leave benefit is certainly better than nothing.</p>

4

<p>"Corporate clients also contribute to the problem. With internal pressures to stay on budget, they seek to minimize the billings by, and experiences of, young associates who, whatever their potential, have not yet demonstrated practical skills. This is especially so as associate salaries -- and hourly rates to recover those costs -- escalate to absurd heights, at least in Am Law 200 firms in big cities."</p>

<p>So, we corporate counsel contribute to the problem how? By refusing to pay absurdly high hourly fees to associates who have not demonstrated practical skills?</p>

<p>The "problem" as I see it is a combination of greed and hubris. Partners of the largest law firms want to keep up their per-partner revenues. They want their firms to be regarded as part of the elite that pay their new associates the highest starting salaries. That means asking the young associates to bill an obscenely high number of hours; to keep up their per-partner profits, partners do the same. That leaves everyone at the firm less time to spend on the professional development of their associates. The concept that corporate counsel are "contributing to this problem" by shying away from relying on sleep-deprived, under-trained associates who are anxious to bill as many hours as possible is laughable. </p>

<p>I developed my own legal skills in small firms, working on a contingency basis when I represented plaintiffs, and typically working for small businesses when I was billing by the hour. Both types of practice place a heavy premium on working efficiently that prepared me well for working in-house. I haven't always found that same ethos when working with outside counsel from big firms. </p>

<p>The last time I referred a licensing question to outside counsel, I provided them with a summary of the law in the area in which I had a question, to provide a framework for my question. What I got in response was a heavily footnoted memo verifying the accuracy of my own summary, and nothing of any use in answering the question I had posed.</p>

<p>I did use outside counsel when I managed corporate litigation; my colleagues who work in-house managing mergers and acquisitions use them as well. But in my licensing practice, I encounter them mostly when they've been retained to represents customers that are too small to have hired anyone in-house. Those are always my most frustrating negotiations: dealing with an inexperienced attorney poor business sense, who shows little understanding of what is really important to his/her client, and who wants to stretch every discussion out as long as possible. </p>

<p>I once had an opposing attorney (outside counsel) stretch out to two tenths of an hour a discussion of whether the zip code for one of the parties in the "notices" paragraph of a contract was correct. I tried to move on by remarked that we agreed that the zip code should be correct, and that I would verify that it was before turning the next draft, but he insisted on discussing it further at significant expense to his client.</p>

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<p>oh corporate counsel. I have to read it for work... all the time.</p>

6

<p>I saw that article. I subscribe to the online newswire.</p>

<p>Am I a lawyer? Hell no. Not yet anyway. But it's fun/useful/good/a great distraction from my 15 page administrative law midterm paper to keep abreast of what's happening in the legal industry.</p>