What About Paris?™

Factor in outsourcing and new associate wages look like taking a battering.

There were a few firms in Glasgow who used to make trainees pay them for the privilege of a training contract.

Not sure more debt is a good idea.

Why have associates at all? Why not have an army of paralegals from day 1 and make up the best to lawyer through some sort of vocational scheme.

Like the ILEX in the UK.

Your proposal sounds an awful lot like the internship/residency model for medical training. In law, it sounds like clients would no longer be charged for the cost of associates succeeding (or not succeeding) in moving up the learning curve. However, would the need for additional supervision eat the cost savings to firms and clients by adopting a system of unpaid (or nominally compensated) apprentices?

First, one assumes the associate is actually getting trained? There's been much discussion about the actual lack of training as you indicate in your own post...after 3 - 5 years they are no more marketable than they were before.

But that aside, how about an ROTC - type of program. They actually do boot camp training w/salary at the astronomical rate and if the associate leaves before a certain period where the law firm can recoup on their investment, the new lawyer is deemed to have broken the contract and have to pay damages. Wow...sounds like a lot of fun.

(I'm being very facetious here.)

It is an at-will employment like any other business who hires. The risk is on the employer. They are the ones who created the astronomical figures for the supposed best talent.

The risk is reduced if they know how to run their operation by providing training and cutting their losses if the training doesn't take.

You have a point, to a point, and to a certain extent, that's the model we use at my law firm. For example, summer associates. We tell them we will pay them crap, but in return for that, we will make sure they really get to participate in what law firms do and that they will really learn a lot about practicing law. We also tell them that we are a small firm that rarely hires fresh graduates, but that if they do a good job for us, we will do our utmost to help them get work the following year. This has worked incredibly well for us over the years and for the summer associates (most of whom were 1Ls when with us) as well, most of whom went on to AmLaw 100 type firms and with whom we still maintain a great relationship.

Hull just wants to find a new profit center in associate training. He knows that 90% will be duds, and figures if he can get them to carry his bag and make a decent pot of coffee, he's way ahead of the game.

Dan, back in April I posted along similar lines about a "seven-year law degree" (http://law21.ca/2008/04/10/the-seven-year-law-degree/) -- three years of school, one year of accreditation, and three years of "interning" before a new lawyer gets a full license to practise. I think we agree that turning new grads out into the legal world to fend for themselves, with few skills to deliver competent client service, does everyone a disservice, and that we need to take a more mature view of exactly how hard it is to become a lawyer.

That said, I think the idea of having new grads pay law firms to train them is, in today's terms, a complete non-starter. Unless every legal employer in the country agreed to do this -- and I think anti-combine officials would take notice of that -- an employer who tried charging new lawyers for training would never have a new lawyer to train. Not even the best law firm out there, with the best training any new lawyer could ever ask for, is going to get any applicants -- other than the independently wealthy who graduated from law school debt-free and are willing to work for, literally, less than nothing in order to better themselves and help provide value to firms and clients. In my experience, the independently wealthy in particular don't tend in that direction.

I'm not willing to concede that new lawyers are automatically nothing more than a drag on their employers' profitability. Whether they're paid more than their work is worth is an open question, but it's hardly the new lawyer's fault that he or she is offered what the market gives them. The real problem is that large firms, which set the salary standards, neither care about training their lawyers nor particularly need them trained -- they need billable hours churned out. When (not if) that changes, and new lawyers' salaries start returning to a value that more closely approximates their value, your concerns will be partly alleviated. (Their salaries will always exceed their value because of supply and demand, and we shouldn't expect any different -- if salaries matched real value, teachers would make millions and pro athletes would be earning five-figure incomes).

And of course new lawyers benefit from the experience they get -- but how is that different from any other industry anywhere? When did we start begrudging our employees their ability and opportunity to learn from our example and experience? You don't charge people for that -- you factor it into what you pay them, sure, but the degree to which you successfully train a new lawyer in the law is a competitive advantage in hiring, not a club to be used to knock people down. And, I would argue, it also goes to the Bar's tradition of professionalism. I agree we need a much better system than what we have now, but with respect, I don't think this is it.

FWIW, medical interns--if they were lucky--got free room and board and not much more. Now they get a living wage (enough to satisfy their lenders). Even under Dan's plan, some money will pass to the trainees (as occurs with his 1L summer associates).

1. No benefit? BS

$300/hour * 2000 hours = $600,000

$600,000 - $165,000 (salary) - $50,000 (bonus) = $385,000

Let's say they pay another $100,000 in administrative support costs, employment taxes and benefits. That still a $285K net benefit. Plus, the fact that they have people to grunt work means they can spend more time developing business.

2. Training?

What training would we be paying for? How to do document review? How to do case law research? Or maybe we are being trained to live without a social life?

3. Higher costs for clients

If you lower starting salaries, there will be fewer people entering the field every year. That means there will be fewer experienced lawyers that add "value," and the cost of legal services will sky-rocket.

I guess, by going out on my own, because I could not find someone to hire me at 30k (I don't need benefits; I just need someone to pay my payroll taxes!) I am already following this model. Hah! How about a little less superficial elitism by firms of all sizes? I didn't go to a top law school, but I did go to an Ivy League undergraduate institution, did work full-time while in law school, and have had papers published in peer-reviewed social science journals. I taught myself statistics and I conducted advanced statistical analysises at my job out of college. I have the dedication, work ethic, and intelligence to learn quickly, learn well, and do a good job. But because I don't have prestigious credentials, experience, or don't have the "right" look, I'm un-hireable. I'm also freakin' bilingual!

Frankly, this profession is insanely inefficient and ludicrous. It is the gatekeepers like yourself who make it so. Have a good time finding slaves.

Tabitha--Thanks for the comment, and maybe you're right. You sound pretty interesting. What are you wearing?

touché Mr. Hull. See you on the interwebs. :)

"an employer who tried charging new lawyers for training would never have a new lawyer to train"

It seems to me that this would suit Dan just fine; he has essentially said as much in the past. He does not like young people, or young lawyers, and would rather not work with them.

Tybalt--Well, it's not that simple. Will try to explain. I like--and admit I do expect--quality, energy and ambition in lawyers of all ages. Practicing law, especially at first, is hard. And acquiring value as a lawyer is very hard-won; lots of lawyers (maybe even most) never get there. Lawyering is not for everyone and, in my firm's view, too many recent grads (say, last 10 years) should never haven chosen it as a career. It's 100% a client thing. Good clients and their GCs deserve firms with younger or newer lawyers who are (1) engaged, (2) happy and (3) deadly serious about lawyering.

New lawyers really have changed in certain ways in the last 10 years. And I am not exactly sure what has happened or why. But it hasn't been a good set of changes for corporate clients. Traditionally, we gave younger people client contact (including GCs) and big responsibilities very early--but we are not sure we can do that any more. That is no longer working. We first see it in summer clerks, all of whom are very good students. But "something" more important than grades and law review are missing. It's drive and stepping up, mainly.

I'll be in the UK this coming week (leaving in a few hours) with lawyers from a couple of the bigger firms there. I am interested in what they have to say about it. I am not the only one thinking about the issue, and it is certainly not about disliking young people. It's only about our clients (95% of which are repeat ones), delivering real value to them every day, and making them be and feel safe. Really is. Hey, thanks for your comment.

"It's drive and stepping up, mainly."

I think you're overlooking some fundamental structural problems in law practice that affect the situation more than any sort of generational changes in young lawyers. What kind of "drive" and "stepping up" do you need to review a thousand documents? You can hardly blame a young associated for being less than enthused when all she sees day in and day out is the document review softward.

And most importantly, there's only so much "drive" can do when you're $150,000 in debt and feel like you *must* stay in your job that requires you to sacrifice your life by billing 2000-2200 hours/year in order to dig yourself out of that debt hole. It becomes indentured servitude. I, for one, don't blame young associates for not being "engaged" and "happy." It's far too much to ask them.

I have to say, if your young associates are all unhappy, unengaged, and not "deadly serious" about their jobs, then I think you should start looking at the constant in this equation -- you and your firm and your management policies -- rather than taking a facile, kids-these-days attitute.

I think this is only a poor attempt to jump off the "salary-carousel" in times of recession and fewer transactions.

Like "work me" already said, you're still making a lot of money, otherwise all big firms with a leverage of - at least 5:1 - would file for bankruptcy in no time... Poor, poor big firms...

As far as Germany is concerned, if the firms decided to pay less or even nothing, they would not get a single associate, because everyone would start his own business, without the sweat-shop-conditions and boot-camp-atmosphere, and with the good feeling of being self-employed.

So, come on...
Maybe you can do it to desperate Kids who have no self esteem. But then you are right, they will never become good lawyers.

If young lawyers are so worthless, why don't you just hire mid-levels?

Did you see this story on MSNBC about the married couple (JD/MBA and MD) who have $500,000 in student loan debt? And $4,000 monthly bill from Sallie Mae?

http://www.msnbc.msn.com/id/21134540/vp/26494902#26494902

To Dan Hull I say: if you want to suck blood out of your victims, make sure they actually have some blood left.

Laughable, at least as to BigLaw.

Even a first year at a big firm is very profitable, as correctly observed by Work Me above. The "associates aren't profitable until mid-level" nonsense is a farcical myth perpetuated by partners making $1M a year but who think their slice of the pie still isn't quite big enough.

Moreover, as observed by Susan and others above, the "training" received by many big firm associates is wretched to nonexistent - certainly not worth giving up your life and an income for.

Two thumbs way down.

Are you kidding me? Surely you realize that the whole "associates are unprofitable" rap is just brainwashing by partners. See the math done above. If your associates aren't profitable, that's your problem, not theirs.

You are proposing a system of apprenticeship, after the three years of law school. Does that really make sense to you? Why would anyone possibly agree to that? Go ahead and try this at your firm - see if you are able to hire anyone ever again.

You say you lose money on associates. Fine. Be a lawyer and prove your case.

How much do you bill your associates out at? What's your average realization rate? What's your average collection rate? What is the exact overhead associated with each associate?

Don't fudge the numbers, either, by saying that there are hundreds-of-thousands of dollars in "recruitment costs" per lawyer. Also, don't throw in the cost of the marketing department. And if you add in facilities managers (which you should), divide them by the number of total people; since it's not like the AC only runs in the young-lawyers' offices.

Let's see those numbers.

This idea is absurd. As someone already mentioned, the idea that young associates get "trained" is patently feckless. Moreover, partners at major law firms that do large securities class actions defense, internal investigations, and other bullshit cases like that get to justify charging their clients $300 an hour for monkey-work.
If you think that that does not (a) enrich the partners and (b) rape the clients, then you are lying to yourself.

This is utter nonsense.

Your sweeping generalizations about that productivity of junior associates betrays not only your own arrogance but the reflects very poorly on the quality of work being produced by your firm.

Pay associates paralegal wages for their first two years and then elevate them.

1. Clients don't want to pay for the 'training' of greenfield lawyers.

2. It is ludicrous that a 24 year old who may have never held a job in their life walks into a position making $160,000. Experience counts people.

Following the above would reduce costs, increase profitability, please clients and hold down rate increases and hopefully manage lawyer ego issues a little bit (one can hope).

This post reflects the misunderstanding of basic forces at work in the legal market. As a law student (2L) at a top-tier school, I know the pressures that are driving this market.

The level of performance that is required to get a great LSAT score and GPA just to get into a top-tier law school, then get top grades at that school means that the SUPPLY of us "unprofitable for the first few years" associates is LOW. Sure, there are plenty of people graduating, but not enough from top schools with top grades to drive down the HIGH market DEMAND. The bi-modal salary distribution for entry level law jobs demonstrates this perfectly.

Of course the salaries are more than what you think they're worth, but they continue adjust to basic market forces. Would I have gone through what I have gone through in order to work for free or even pay - no. Especially taking into account the high cost of living in places that pay the most, like NY, Chicago, or LA, $160,000 for someone working those kind of hours with 3 years graduate/professional school is not out of line with the rest of the economy.

Frankly Mr. Hull, you just don't get it - big firms need new associates all the time. If new associates were so unproductive, why do they get merit bonuses and bonuses for working more hours? It is in the firms' interest to give these bonuses because new associates make the firm a lot of money by doing the crap work that partners won't.

What might have merit is creating a second type of career track. Give some new lawyers the promise that they will be in more significant roles as 1st, 2nd, and 3rd year associates (and thus will have much better experience than their counterparts) but pay them less. To me as a law student, this would be a very attractive proposition.

Unfortunately for the firm, this creates three major problems.
1) It would only incentivize more flight from the firm, perpetuating the brain drain, because in 3 years you'd have a 3rd year associate with the same knowledge as a 5th year associate (who is making more money) and the 3rd year would leave for greener pastures.
2) It still leaves all that document review to be done by someone else, who will, of course, demand the market rate for market services - too bad.
3) It kills what should be the proper growth pattern of your firm, which is promotion from within. By driving away all your young associates, you'll need more laterals, which inevitably also demand market rate.

Seeing a pattern? There is this thing called a market. Your ignorance of economics, and arrogance concerning the non-monetary benefits that you supposedly transfer to young associates is disgusting. For lawyers who want great experience and are willing to sacrifice money there are things like public defender, pro bono firms, and JAG corp. It is flat out idiotic to think that the best law students from the best schools would ever consider working for free or even paying a large firm for the "experience" of what young associates go through. You drastically overstate what that "experience" is worth while completely undervaluing the young associate's contribution to the firm.

If you have 1st and 2nd year associates who "can't do anything" that is your problem for not making them productive through training and appropriate assignments. I hope I never work for a partner like you.

Big Law buddy of mine has been reading emails for 2 years. Awesome training.

I have more litigation experience than his 7th year buddy at the same firm.

The clients are the ones who are getting ripped off. They get charged $300+ per hour for armies of associates reading through email at home.

The comments on here echo the ones made to me by a lot of friends. "the firm bills us at $300 an hour, so they make like $600,000 a year on me alone." This statement amuses me to no end. First of all the chances of all of your hours actually being billed to a client and paid for are slim to none - most partners write off huge chunks of hours from young incompetent attorneys like you. Second of all, do you really think for one minute that you could go out and charge $300 an hour for your services? Do you think someone is willing to give you $300 an hour because you got an A in con law, or because you were captain of your moot court team? Sorry, they don't - you are a loss to the firm because they have to expend resources in order to get someone to pay you. Because your work is not worth $300 an hour, and because it costs an obscene amount of money to provide you with a nice summer position, and lunch, and an office - with a secretary.

Rant over - and yes - I am actually a 1st year associate or will be in a few days.

The problem is that if you do not adequately pay your associates, they will be unable to live lifestyles that will put them in touch with the right clients or project the right image for you firm.

When someone meets an attoreny from your firm and they are living a so-so lifestyle, or, because of student loans, they are living a poor lifestyle, what does it say about your firm? Their image of unsuccess says that your firm is hungry and desparate.

Getting clients is all about image. If your lawyers are poor, odds are, they are also not worth hiring. Part of being a good litigator is about having the matching ego, to get that ego, they need to be differentiated from society and have the (groundless) sense of confidence that uniqueness confers. The pay is part of a branding move to separate your lawyers from other lawyers -- you do not have whiplash commercials, you do not have ambulance chasers, etc, etc. You have high-paid, top-talent -- conveying the image of rising stars rather than a pack of hungry hyena’s is much more effective.

After all, if you can't do well for yourself, why could you do well for your clients?

And, to Oscar -- the flipside is, if someone has held one job for a long period of time, it means they are not competant enough to be doing something else. Years of experience is a lousy way to judge ability -- hell, if you've been in a job without promotion for more than two years it shows that you are cold product.

In Italy after 5 years of university (just teorical) we have 2 years of unpaid trainerships.At the end af all an exam to be a lawyer (avvocato in italian).
Than?
Restart from zero.

Associates unpaid?
Isn't this a prove of america's decline ?
Welcome to our world

Paolo,

it is similar in Germany, we have 4-6 years of law school, then two years of apprenticeship and are paid about 800€ a month for these two years.

Hence, if they would pay us nothing, we would be 30 and wouldn't have made a single dime... Ridiculous.

If you have very good grades, it shows you are very effective and only need a few weeks or months to be productive.

Best regards
P

So, what you're basically suggesting is "Just watch me and you'll learn something, and you should pay me for that."

Training understands an official program in which the material learned is clearly defined. Law schools charge for the training they provide for their students, because in three years they prepare them for the bar exam and double or triple their value on the job market. They also don't exploit them as workers.

If a student gets official training at a law firm and is NOT required to work for the firm (the law firm has no use of the associate whatsoever), the firm may charge for its training services. However, to use someone to work for you and charge them under the explanation that he or she will "learn something" is not a valid business deal.

Irene--What we are saying:

1. Go to law school for 3 to 4 semesters. (Change the system.) Law school gives you 15% of what we need, and grades do provide a glimpse into the real talent for the 15% part. But you need to go to work. Top students from top schools are just spazz cases unless they "want it" and eventually "get it".

2. Don't waste law firms' time by going into a profession you are not suited for or just don't have the stomach to learn. We're tired of half-assed people. We don't owe you a "finding yourself period". Quit stealing from us and our clients.

3. Main Event: Learn by doing/paying: "Be a partner" from Day One, step up with all you have. But what you are doing at first is worth $35 an hour TOPS to us and it may be even a drain (-$35 an hour) on us. Your value-added may or may not increase--but you need to earn it. And academic smarts? It's about 15% of what we really need. It does not drive whether you will ever "get it".

4. If you really want it, you'll pay for it.

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