Day two of associates held hostage. And today we hit the hot-button issue of associate pay. Sort of.
The National Law Journal reported yesterday that many associates are leaving law firms. The NALP reports that 78% leave by the fifth year. To be clear on this, however, not all associates leave law firms to go in-house. Some go to other firms, or to government work. A handful may even become investment bankers.
And it’s not like one feels too sympathetic about newly minted (read: totally inexperienced) lawyers who make $150,000; but that’s another story.
Any way you slice it, there is a significant level of attrition at many large law firms. Are the “greener pastures” of in-house life (itself somewhat of a stereotype) mostly to blame? I don’t think so.
I think the single biggest factor in these departures is the law firm itself. I said yesterday these attrition stats are symptoms of a flawed business model. I still think that’s accurate, but not the whole story.
What they are really a warning sign of is a bad people model. And if you value people, then it’s an issue. If not, then focus on profits-per-partner or something.
To examine the “people model” issues at play, consider the main plot points of the kabuki drama that is life at some large law firms, seen from the perspective of a fictional partner on the hiring and comp committees:
— There is a war for talent. We must overpay. (It’s free advertising, too.)
— These ungrateful associates must work for their supper. (in my day…)
— Billing 2,150 plus hours per year is a good start. (Good time for clients who pay, to boot…)
— They want a work-life balance? (I’ll show ’em balance this Friday at 5 pm…)
— What’s this about Fifth year associates griping that their base is only $1,000 more than the new starting salary? (I’ll put them on the professional development committee…)
— Business is flat, we can only grow revenues by jacking up our rates and yearly targets. (I guess we can’t promote as many to partner this year…)
— Why the hell are all these associates leaving? (Don’t these clients know we need workers!)
Harshly drawn to be sure. But seen through these opera glasses, making news out of the annual rite of raising starting pay is like warming up the dance band on the Titanic. Sounds good, but you don’t want to be around for the fifth encore…
But if it makes you feel better, go ahead, blame your friendly GC (who likes buying by the year rather than the hour…). She is not just hiring your associates, by the way. She’s also looking at new service alternatives, outsourcing and technological tools.
And maybe other law firms…