Michigan Lawyers Weekly
Jul 30, 2009
Michigan Lawyers Weekly - OCR Text
http://www.milawyersweekly.com/
Not long ago, the $160,000 that large firms were paying annually to first-year associates seemed to be the wave of the future for law firms. It also seemed to be merely a stepping stone to even higher compensation levels.
Sure, some clients complained, but certainly there would continue to be enough money to go around for everyone.
Firms, however, often missed the real point of client complaints: They objected to paying so much for the on-the-job education of these beginning associates. It was a groundswell reaction that spawned the Association of Corporate Counsel's "Value Challenge," and it has picked up much more momentum with the recession.
How things have changed.
Just as law firms feel the need to placate their clients in so many other ways, they increasingly are taking (or feel they are forced to take) drastic action to curtail the money going to inexperienced young lawyers in order to demonstrate cost-cutting sensibilities.
Not long ago, firms felt the need to impress corporate clients that they were successful enough to sit at the same negotiating table and offer strategic counseling. Today, the operative dynamic is impressing clients that you're frugal enough to hire.
We are already starting to see what that might mean to young associates learning to become lawyers. Now that hiring out of law schools has become "decremental," an ongoing decrease that is the opposite of the incremental increases of the past, firms are looking at how best to integrate their young lawyers into the practice.
A large firm based in Kentucky publicly announced that its "first-years" will spend their first 1,000 hours learning on the job at lower pay and under strict scrutiny.
The pressure to bill also will be relieved under the program, as new associates will earn $80,000, but only be required to bill 1,000 hours. That's 800 fewer hours than previous classes were expected to bill.
In another example, a major Philadelphia-based firm already has announced that, rather than immediately assigning its September 2009 associate class to new matters, it will enroll them in a new training program with courses on taking depositions, writing briefs and meeting client needs.
The instructors will include the firm's attorneys, professional development staff and clients. The new associates also will shadow partners' client meetings and court appearances, and if they handle client work, it will be at significantly reduced rates.
The cost of the program is covered by a reduction in starting salaries to "only" $105,000, with a return to "prevailing" market rates when training ends in the spring of 2010.
Perhaps law firms will reach the realization that law school students must not only read about the law, they also must learn how to engage in it.
If that realization ever seeps into the law school faculties, it could make the ACC's "Value Challenge" unnecessary.
Ed Poll, J.D., M.B.A., CMC, is the principal of LawBiz Management, a national law firm practice management consultancy based in Venice, Calif. He coaches lawyers, consults with law firms on strategy and profitability, speaks at bar associations and law firm retreats, and has written 11 books. Contact him at edpoll@lawbiz.com or visit www.lawbiz.com.
Copyright © 2009 Dolan Media Company
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