Saving the world, one Biglaw associate position at a time
posted by Kaimipono D. Wenger
I’ve known a number of people over the years who had clear opportunities to work at high-paying “Biglaw” positions at the major New York firms, but instead chose to work at low-paying public-interest jobs. That decision often struck me as economically questionable.
Throw some numbers into the mix. Assume that our law school graduate has two options. She can work at Skadden Arps and earn $140,000 a year. Or she can work at Legal Aid and earn $40,000 a year. Which should she take?
The standard analysis says that if she’s interested in a higher salary then she should work at Skadden, and if she’s interested in helping out people (say, in the criminal defense division) then she should work for Legal Aid. It all depends on her starting premises. So if we posit that our law student (a) doesn’t really care about earning a high salary, and (b) wants to help people by defending indigent criminal defendants, well then her clear choice is the Legal Aid job. Or is it?
What if instead, she took the Skadden job, and donated most of her salary to Legal Aid?
With her $140,000 Skadden salary, she could donate $80,000 to Legal Aid, sufficient to allow them to hire two new attorneys, and thus defend twice as many indigent criminal defendants.* Meanwhile, she would retain $60,000 of her salary to live on, herself — more than enough for her purposes, since she doesn’t care about money (recall that she was happy to work for 2/3 that amount).
That’s twice the net gain in overall defense for the indigent, if our law student doesn’t choose Legal Aid herself. (And that’s not even including her ability to do some pro bono work while at Skadden — or the extra Legal Aid attorneys that her year-end bonus might be able to hire in a good year.)
So why don’t more law students take this route?
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*Note that in order to succeed, this program would require some careful a tailored salary. Taxes would almost certainly eat too much of her pay to make this feasible if her pay all went through her. She would need to arrange for Skadden pay $80,000 of her $140,000 directly to Legal Aid, rather than to her.
December 9, 2006 at 4:49 pm
Posted in: Economic Analysis of Law, Law Practice, Law School
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Responses (15)
James Grimmelmann - December 9, 2006 at 5:42 pm
In part because both the Skadden job and the Legal Aid job have associated benefits and support costs, so that the free cash required to pay for a Legal Aid attorney substantially exceeds the actual free cash paid to a Legal Aid attorney.
In part because the Skadden job is so much more overwhelming than the Legal Aid job that she’s also being paid for her drop in quality of life. Some of this compensation actually gets chewed up in expenses–such as living close enough to Skadden that she can be at the office at the drop of a hat.
(On the other hand, if I work at Skadden and donate enough to Legal Aid to allow them to hire two attorneys, Legal Aid actually *triples* its work, not doubles. That’s also because I also freed up a slot (and its funding) by working someplace else.)
John Armstrong - December 9, 2006 at 5:42 pm
So why don’t more law students take this route?
You mention tax issues, but here’s a related conjecture. N.b.: I am not a lawyer, let alone having been near a place like Skadden.
How much effort and expense is tacitly required of an employee of a firm like Skadden to “fit in”? Legal aid lawyers can shop at Marshall’s, eat at a food co-op, and drive a 1990 Hyundai. Is there an expectation of certain forms of consumption to show one’s compatibility with the culture of the firm at a place like Skadden? Of course one can choose to do anything with the salary, but the social reality might be that most of the money ends up going to certain ends to avoid being passed over or dismissed as not “one of our kind of people”.
Jack S. - December 9, 2006 at 6:03 pm
Taxes aside, how about the $120K in student loans to pay off (that assumes that undergrad was free) and the staggering cost of living in NYC.
At least in the legal aid job, graduating attorney might get some govt. relief for the student loans.
Kevin - December 9, 2006 at 6:03 pm
Ah, the moral vacuity of economics…
I hate to state the obvious, but I think it’s clear that law students take low-paying public-interest jobs because they would rather make less money than work in large firms that defend interests they find morally repugnant. Sure, they could donate their salary and create more public-interest positions. But that still leaves them spending 95% of their time — excluding their token pro bono work — making the world a worse place. For any socially-conscious student, avoiding that fate is worth far more than 100K a year.
The Continental Op - December 9, 2006 at 6:41 pm
So why don’t more law students take this route?
Perhaps for the same reasons law professors don’t opt to become Biglaw partners and donate their surplus earnings to pay others to teach classes and write law review articles in their place?
AJ - December 9, 2006 at 9:42 pm
I’ve often thought about this – I work at an IP litigation boutique that, while not Biglaw, pays Biglaw salaries, and there are several partners who donate tens of thousands of dollars every year to charity (while still managing to live quite well themselves, I might add). Further, although the firm represents some large corporations, most of the work is morally neutral at worst – usually defending one large corporation’s patent rights against another large corporation’s claim. So for someone who simply wanted to do the most to save the world, that might be the way to go. On the other hand, as many people have mentioned, the personal rewards of doing something you find meaningful probably trump the strict economic analysis.
KipEsquire - December 10, 2006 at 11:21 am
She would need to arrange for Skadden pay $80,000 of her $140,000 directly to Legal Aid, rather than to her.”
I.R.C. regulations expressly forbid this. Income is subject to tax when it accrues, not when it is paid.
There is one explicit exception: Nobel Prize winners are allowed to donate their remuneration before payment as a tax-free event.
k - December 10, 2006 at 11:29 am
Since most do take the Skadden route, it makes me want to know more about the “number of people” you know who didn’t. What was their socioeconomic background?
If Mommy and Daddy got them through law school without needing to worry about six-figure loans, then maybe Mommy and/or Daddy work at a place like Skadden and are subsidizing the life of their white-upper-middle-class-legal-aid-lawyer.
Andrea - December 10, 2006 at 3:50 pm
“Perhaps for the same reasons law professors don’t opt to become Biglaw partners and donate their surplus earnings to pay others to teach classes and write law review articles in their place?”
This is the winning answer. Because it’s not just that those of us who want to work in legal services want to help people, it’s that we want to be the ones helping people. We want to be face to face with the clients, and add our skills, not just our dough. If that matters, you can simply not get the same personal satisfaction imagining what legal aid lawyers are doing with your contributions.
I don’t find Biglaw work morally repugnant (usually), but you could not pay me $500K to do white collar defense, toxic torts for the corporation, or union-busting. I find it boring and out of touch with my values. Plus, legal services has a much gentler approach to work-life balance and families.
“If Mommy and Daddy got them through law school without needing to worry about six-figure loans, then maybe Mommy and/or Daddy work at a place like Skadden and are subsidizing the life of their white-upper-middle-class-legal-aid-lawyer.”
This is a bit patronizing. Read the After the JD study or just talk to public interest lawyers for evidence against the idea that legal aid and government lawyers (who are MORE likely to be non-white) are the rich ones without loans.
Public interest lawyers either just struggle through the loan issue, or make sure they’re covered by some kind of loan repayment program. I only applied to schools with hefty loan repayment programs precisely so I could go into legal services without a detour through a Biglaw job I’d hate. (Mommy is an elementary school principal, Daddy isn’t around, and I’m Latina.)
Joe - December 11, 2006 at 9:15 am
The original post assumes that public interest lawyers should be solely motivated by their net impact on the indigent or on society more generally. This seems like an odd, economic caricature of public interest lawyers. Why aren’t they simply like other lawyers, who choose careers based on an often complex combination of factors, including the nature of the work, work/life balance, prospects for advancement, compensation, etc.? If you absolutely must put this in economic terms, perhaps they derive utility from personally being able to help the indigent.
Ian - December 12, 2006 at 4:55 pm
Kaimi,
The same analysis applies to pro bono work.
Assume fancy-pants lawyers at firm X bill out at an average of $300 per hour. The firm encourages/requires its lawyers provide 20 hours of pro bono work each year. That is about $6000 worth of services, per lawyer. The individuals who seek and qualify for such free services have legal problems that command $75 an hour. The lawyer at fancy-pants firm end up donating 1500. worth of services.
It is clearly more efficient for the lawyers to exploit their comparative advantange and either a.) fund more legal aid lawyers, or b.) give the needy persons cash (which they usually need most) than it is for the lawyers to donate their time.
There are obvious external benefits to pro bono (e.g. fostering a sense of community and compassion, training, experience). But the economic analysis of it suggests we should bill more hours and our firms should write checks.
For some published commentary on this, see Charles Silver, What’s Not to Like about being a Laywer, 109 Yale L.J. 1443, 1479 (2000).
Bob - December 12, 2006 at 6:09 pm
To measure the overall effect you have to know how well the person would do in each job, and things like how each would affect her emotional well-being. If she is typical then she, like many public interest/public sector lawyers, would be less effective (maybe even lose the BigLaw job) or less happy (likely making her a drain on those she interacts with rather than improving their lives). It’s important to do something that matches your skills and personality, then once you decide you can let your values decide how you spend your compensation.
James - December 16, 2006 at 10:41 am
2 things.
1. Lets not forget that Legal Aid and other non-profit orgs thrive because they have the best attorneys. The main thrust of legal aid is that poverty shouldn’t deprive you from the best representation out there. Obviously there are many more qualified attorneys than there are positions, and the economic argument holds up if a handfull do this. But taken to the extreme and you’ll wind up with jumbo-legal aid society of less capable attorneys. I don’t think the aspiring public interest lawyer or legal aid wants that.
2. Most of the people who work at legal aid went to law school specificially so they could do that work. They planned financially for a career in public service. They took coursework and completed projects that help them succeed in this field. Many do make law review and have top credentials to make them desirable for a biglaw firm, but I’d argue that it’s a waste of their passion, talent and skills to turn them into corporate donation mechanisms.
patti - August 22, 2007 at 9:17 am
my son is now going thru a custody battle for his 3 year old son – my husband and I have already used up all of our money the first go around – there is no money left
this time around the court assigned him a legal aid attorney – our concern is – will this attorney fight as hard as the one that was paid did – what is a legal aid’s credentials – are they experienced in specific areas? we’re panicked but we have no other way to turn?
please calm our fears
thank you
patti - August 22, 2007 at 9:17 am
my son is now going thru a custody battle for his 3 year old son – my husband and I have already used up all of our money the first go around – there is no money left
this time around the court assigned him a legal aid attorney – our concern is – will this attorney fight as hard as the one that was paid did – what is a legal aid’s credentials – are they experienced in specific areas? we’re panicked but we have no other way to turn?
please calm our fears
thank you
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