The New York Times continues an excellent series on “Working for Less” with a profile of large law firms setting up outposts in lower-cost cities with lower-paid attorneys. The two firms profiled (Orrick in Wheeling, WV and WilmerHale in Dayton, OH) are said to be at the start of a trend where “… nonglamorous jobs are going to nonglamorous cities.”
(Ah, we know at least two cities where the New York Times doesn’t offer home delivery).
These attorneys are described as “career associates” or “permanent associates.” I thought the latter term actually described “non-equity partners.” These experienced attorneys are paid in the $60,000 range, a fraction of what these firms typically start freshly-minted associates in tony enclaves such as San Francisco or Washington, DC.
To their credit, Orrick and WilmerHale go on the record. The former stays on message:
It’s our version of outsourcing, said Ralph Baxter, Orrick’s chief executive. Except we’re staying within the United States.
The latter actually provides a revealing comment to reporter Catherine Rampell:
There’s a big, low-cost attorney market there, said Scott Green, WilmerHale’s executive director. That means we can offer our services more efficiently, at lower prices.
You have to read this quote a few times to let it sink in. The first time I read it I thought “market” meant client demand. The more I read it I think Mr. Green means attorney supply.
If I am wrong, then Mr. Green seems to be saying that WilmerHale can only be efficient from Dayton, OH.
The other factor that the article does a good job with is the potential for a caste system at these firms due to this staffing model. Two times Orrick states that these “permanent associate” jobs are not “second-class.” No small long-term management issue, that.
I can’t decide whether this is really the sign of things to come or just two law firms trying to separate from the pack from a positioning standpoint. I understand why back-office operations could be moved to the hinterlands. I am not sure whether large law firms really need to have attorneys on staff there or could just partner with established outsourcing companies, who can put lawyers anywhere (globally) or everywhere (virtually). International LPO companies arbitrage people every day. (Jordan Furlong gets the outsourcing equation right.)
We know one thing about BigLaw: their core business is not providing legal “services more efficiently, at lower prices.” And, historically, they have been proud of it.