<p>Really interesting piece I just read. Has greed crept into the structure and culture of biglaw and ruined it?</p>
<p>* When my wife and her friends began working at big firms, the impression I got was that it was a strange and possibly unsustainable industry, which turned out to be somewhat correct. What I didn't realize was how new this form of the industry was.</p>
<ul>
<li><p>In 1991, the median for new lawyers was $40,000. About 40 percent of lawyers made $30k-$40k, with six percent making $70,000, "the median in big law firms at the time."</p></li>
<li><p>In 1996, 45 percent of lawyers made $30k-$40k, and the big-firm six percent made about $70k-$80k.</p></li>
<li><p>And in the mid-2000s, things went nuts: "in the three years that followed 2007, 2008, and 2009 the right-hand peak shifted to $160,000, accounting for 16%, 23%, and 25%, respectively, of reported salaries. Meanwhile, the $40,000 $65,000 peak shrank, accounting for 44%, 42%, and 32%, respectively of reported salaries."</p></li>
</ul>
<p>At the rate of inflation, big-firm salaries would have increased by about 25 percent from 1996-2009. Instead, they doubled. While the salaries were doubling, big firms went on a hiring binge as well.
*</p>
<p>As I keep saying, if a new lawyer is really only worth $80,000 per year (assuming that he’s about 25 years old, has no marketable skills, and does not have any substantial pre-law school work experience), then law firms will need him to work two jobs to justify his absurd salary.</p>
<p>Unfortunately, all young people hear is that they are “worth” a huge salary once they get a very expensive, relatively prestigious degree.</p>
<p>Of course, this also helps BigLaw: the more people in law school, the more that salaries can be depressed. Basic supply and demand. These days, some law firms are setting up shops in small cities or relatively rural areas, hiring on “associates” who will never be on a partner track, and paying them $60k/year to do the work that young associates used to do. Then they hire on some associates for $160k to work in the main offices, so they can still look all prestigious and “top”.</p>
<p>I thought it was internet bandwidth and an army of cheaply paid, English-speakers in India that ruined the profession
[The</a> growth of legal outsourcing: Passage to India | The Economist](<a href=“Passage to India”>Passage to India)</p>
<p>Of course they’re worth it; that’s what the market will bear. I doubt the number of graduates really has that much effect on BigLaw salaries because BigLaw firms only hire from a relatively few schools. Since the size of those schools doesn’t change much the fact that the rest of the market gets flooded is mostly irrelevant.</p>