The Wired GC has learned that several money-center law firms are quietly exploring some creative ways to deal with excess associate capacity due to the economic slowdown. The first idea out of the chute: near real-time associate pricing.
Here’s what we have learned thusfar from one firm:
>> The plan is to beta-test this approach with several key clients in a dedicated, secure extranet. The clients have signed NDAs, which the firms actually didn’t charge for.
>> Available associates will be organized by legal subject, with short, Facebook-like profiles. As for the mechanics, “think eBay for a young JD” one insider said. Auctions of associate time will start on the hour, and last 30 minutes or less.
>> The winning bidder gets the associate starting on the matter within 10 minutes (allowing the intrepid young barrister finish up any online Sudoku or Scrabulous and grab a cup of coffee).
>> If the work is estimated to take less than 12 hours, the associate must finish it that day (or night).
>> This firm also plans to leverage its global footprint by putting groups of 2-3 associates in separate timezones up for auction to allow urgent matters to be staffed 24/7 until project completion. Since these associates may actually get some sleep, the reserve price will be set lower.
>> Clients can bid by the hour, by the project, or, in some cases, by the result (such as for fixing CEO/GC traffic tickets).
>> In a bid to reduce costs and introduce some transparency into the process, this firm will require clients to pre-pay for the work, and then PayPal the associates on a daily basis.
>> Any shortfall in auction proceeds from an associate’s normal salary (and firm profit) will be taken out of the individual’s PTO bank. Beyond that, a second mortgage on associate residences is an option under active consideration.
“We’ve got some world-class subprime guys who are looking forward to getting back to work,” one firm explained.
Partner auctions are not on the table at this time, according to the source. That firm is also quietly seeking a carve-out for this program from the American Lawyer for its annual profits-per-partner rankings.