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August 27, 2008
Should associates pay their law firms in the first 2 to 3 years?
A New "Value Movement"? On Sunday night at dinner, an out-of-town friend since college, and member of a large U.S. law firm, raised the above question. "Jack's" verbatim query was a bit, but not much, different. After being startled for a moment, I wrote it down:
"If associates get all the benefits of training at my law firm in the first three years, and can't really add much value anyway, why don't they pay us?"
I admit to planting this seed of heresy in Jack's head years ago, when we had talked often, and passionately, about the understandable difficulty (perhaps impossibility) of making even the most talented law school graduates productive, client-oriented and economic inside of two years. Yes, we were both grumpy about the competitive and increasingly high salaries being paid to new law grads, by his firm and mine. And so I had first brought it all up back in 2003.
But back then we had also talked about the unlikelihood that the typical new associate at a large or higher-end firm--even those with part time jobs or summer clerkships under his or her belt--had enough work and life experience to decide to chose a law firm career without actually doing it, and thinking about it, for a while. Private practice at any law firm is not law school; it's far more demanding, and arguably demeaning. It's not for everyone.
Only doing it along side experienced, hopefully sane, lawyers in the trenches of real practice tell the new lawyer and the firm much about the truth.
So starting five years ago, Jack and talked I on the phone a lot, with verve and imagination, about a new "value movement". In the movement we half-joked about, law school graduates would be paid chiefly in the experience gained at a firm. Not money. Or, alternatively, gulp, the associate lawyer would pay the law firm.
But over time, we stopped joking. So here are the bare bones of the value movement:
A. No or nominal money. Initially, say, in the first 2 or 3 years, under "VM", an associate would be paid in the form of experience of being immersed in learning how to be a lawyer as he or she worked with more senior lawyers. A "trainee" would: (1) be paid either very minimal or at most paralegal-level salaries--don't laugh, a good paralegal is often markedly more valuable and cost-efficient than a "brilliant" first-year associate--and perhaps some other benefits; or (2) actually pay the law firm a nominal stipend--a "tuition", in effect, to cover some costs (and risks) of "training"--in a flexible apprenticeship arrangement which could be revisited.
B.Associates bear some risk.At a minimum, making the associate bear the risk of the investment in his or her training might have the effect of deterring some new grads who were just biding time, or perhaps clearly not going to stick around after debts were paid off, from going to the law firm in the first place. It might force some new lawyers to chose. (Further, the specter of such a system might even deter undergraduate college students from applying to law in the first place; students who know what lies ahead of them following law school may be less likely to chose law school as a "default" post-graduate alternative.)
C. Flexibility. Of course, the apprenticeship details would vary with the needs of the firm and the perceived abilities, energies and commitment of the trainee. The training term could be as short as 1 year and as long as 3 years. Obviously, if a law firm were somehow more certain a new associate was at least earnest enough about practicing law to stick with the experience for a long enough time to become a productive lawyer, the firm could pay the new hire anything it liked.
D.Firms get a more reliable look-see; new associates get experience.The idea is merely to ensure that both the law firm and the new graduate "get something" of value--in the firm's case, at least a stronger expectation of receiving value--in the first few years. Young lawyers may need time to test the waters; however, in the meantime, law firms should at least not have to "guess" as much about who is serious about law practice and who is not. Further, summers and part-time clerkships don't tell candidates or the law firms enough. Insufficient "data" for both.
E. Evaluation; parting of ways; negotiation. At the end of the training term, either (1) end the relationship, or (2) start talking about real money, real commitments and real professional futures, and commute the relationship to a permanent position. In short, use the training period to make decisions that make sense for both the lawyer and the firm, and avoid wasting the time and resources of either.
Draconian? Preposterous? Anti-"something"?
Maybe.
But associates, Jack and I would both argue, gain far more than their firms--and by a long shot, even if hard to measure--in the first 2 or 3 years. This is especially true at firms with demanding or high pressure "blue-chip" practices. There, brand new associates are paid very well to contribute very little, especially in larger firms or higher-end boutiques, in an expensive, somewhat nervous and very uncertain "talent-retention" exercise and sweepstakes. "The talent" we invest in, however, doesn't know anything; it can't really do anything for 2 to 3 years.
Law firms continue to invest big in associates with no guarantee that the associate will remain for very long. After very few years, he or she may choose to leave the firm after paying off school debts, decide against life in the medieval partner-associate structure and work environment, choose to work in another firm, the government or teaching, and/or leave the profession completely. That's fine. And that's human. But in any case, firms in the first few years "net", in most cases, Zilch. However, at a good firm, the associate generally retains a substantial, often incalculable, benefit of experience and know-how if he or she leaves, and can use that benefit at a new firm, other law job or even other career. No one "forgets" their first few years of practice at a solid law firm. At the very least, one grows up.
Final score: Associate Lawyers 100; Law Firms 0, or Less-Than-Zero.
So why should my boutique firm and Jack's big white shoe firm pay new lawyers to be "in school"--especially if many of them can be expected to drop out? And drop out "enriched"?
Finally, while the ability to think like a lawyer learned in 3 years of law school is a critical prerequisite to lawyering, the real education is forged in the first few years of practice. In the scheme of things, that training comprises by far the biggest part of becoming and remaining an effective problem-solver for clients. No one achieves great lawyerdom in law schools as we operate them in the U.S. or Europe. No one ever has. Our current rags-to-riches/school-to-firm regime assumes that some thing, process or force "completes" a lawyer in law school. But no one really believes that. It is not happening. In my view, the "value fantasy" about new grads with top grades is equally as harmful to those lawyers personally (and perhaps emotionally) as it is to their employers economically. And it is harmful to clients--the innocent bystanders--in ways too numerous and disturbing to list here.
Law firm compensation systems--especially in the U.S.--presuppose a value in new law grads that simply does not exist, even in the barest shadow form, and perhaps never existed. No, I don't have all the answers. But can't we come up with something different, sane--and in the true interest of both private firms and new lawyers? And clients?
Posted by JD Hull at 11:59 PM | Comments (31)
A couple of Irish guys.
WAC? has more R than D writers--but we miss Irish pols, who tend to be Democrats because they can't help it. And we love this picture.
Posted by Holden Oliver (Kitzbühel Desk) at 01:28 PM | Comments (0)