The Impact Law Firm Economics Can Have on Your Legal Career

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one of the first things they complained about

profitable-but not as profitable as midlevel or

the law firm and also the client. I personally

was the fact that the associate frequently left

senior associates.

hire attorneys all the time for the companies

the office before 5:30 pm. I did not need to hear much more.

I work for. When you hire a law firm, you are Junior associates are one of the most impor-

generally working directly with a partner who

tant components of the law firm economic

will figure out the “most efficient way” to get

Many associates inside law firms often find

engine. There are several reasons for this;

the work done for you. Early on in your legal

themselves in a position where they are claim-

however, the main reason for this is simply

matter, there are usually a variety of legal

ing that they do not have enough work and

that clients do not have a very good under-

matters that can be researched and analyzed.

that partners are not assigning work to them.

standing of the law firm economic engine. No

The partner likely already understands these

When questioned closely, I often find that

matter whether the clients are large or small,

issues; however, he or she will generally say

these same associates are often perceived as

they do look at the bills that law firms send

something like this to the client:

not working hard enough (i.e., billing enough

out. Let me share with you the billing rates

hours) on the assignments they receive from

of a particular law firm that I am somewhat

“Before we figure out what we are going to do,

partners. Because partners are individually

familiar with:

it would be best to get the answers to the following questions …. I could work on it but my

and as a group compensated based on the amount of work the associates they assign

Law Clerk (Summer Associate) $140/hour

billing rate is quite high. I would recommend

work to do, many partners would rather as-

1st Year

$170/hour

that I ask junior associate X to do the work.

sign work to an associate who is going to work

2nd Year

$215/hour

Their billing rate is almost ½ of what mine is

extremely hard on something and bill many

3rd Year

$265/hour

and …”

hours-rather than an associate who will figure

4th Year

$310/hour

out a way to get the work done quickly and just

----

as effectively.

Partner

Whether one calls this a conspiracy or

In most law firms, a partner can do most legal

productivity (i.e., how many hours they bill)

something else, in many law firms, associates

assignments for clients much faster than the

and they have every incentive to work just

are expected to bill the maximum amount of

junior associate could. In fact, I dare say that,

as hard as they can and bill as many hours

time they can to given projects, whether it is

in many cases, a junior associate could work

as they can on the project. The partner then

warranted or not. This is reinforced through

on a certain matter for one or two days that a

can do more interesting work and rest as-

bonuses that are given to the hardest working

partner could figure out in 15 to 20 minutes. If

sured that as many hours as possible will be

associates (those who bill the most hours)

you are an associate with more than one year

given to the task and the bill correspondingly

and in other more subtle ways (such as not

of experience in a large law firm, you should

increased. None of this is to say anything dis-

assigning work to associates who will not bill

be aware of this. You have undoubtedly seen

honest is occurring; however, on many levels

many hours). As an attorney working inside a

numerous associates in your own firm work

it could be conceived as such:

law firm, you are choosing a career where a

several hours more than they would need to

large portion of your [perceived] value to the

on an existing assignment.

The work is then handed off to a junior associ$400+/hour

ate. The junior associate knows that they are valued by their firm based on their individual

1. The junior associate may be asked to research questions which the partner does not

firm comes through how many hours you bill In some respects, then, the employing of

really need to know the answers to;

junior associates by law firms would not make

2. The junior associate may not have highly

a lot of sense, then. Every year large crops

developed research skills and will spend more

of junior associates are hired by law firms

time than necessary on the project;

One of the most basic rules of law firms is

all over the United States to begin work on

3. The associate will be under the belief (in

that, often, nothing is as it seems. This is

important legal matters for the firm’s clients.

most law firms) that the memo they produce

especially true with the junior associate. Law

These associates need a great deal of training

for the partner will need to be 100% flawless

firms love to tell their junior associates that

to become effective at their work. However,

in its language and grammar and may spend

they are unprofitable and that the law firm

junior associates are an excellent source of

2-3 times longer just perfecting the memo’s

does not make money off of them. In some

profit for law firms.

syntax rather than simply giving the partner

and not necessarily your legal skill.

2. The Junior Associate

the answer;

respects, this is true. However, the real fact of the matter is that junior associates are

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In thinking about the above billing rates, you

4. Upon answering the question, the partner

need to consider it from the point of view of

may think of new issues they want the associ-

continued on back


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