Happy Associates? Say It Isn’t So
posted by Deven Desai
Law.com reports that associates are happier than ever but here’s the punch line: they still plan on leaving firms. In fact, 44.9 percent plan on leaving their firms and 11.7 percent expect not to be equity partners. And as the article puts it, “Despite all the hand-wringing over associate retention, law firms report that in nearly half the associate departures — 49 percent — the firms were either neutral about the departures or happy to have the associates leave.” Perhaps the best part for law school readers is the prediction that AMLaw 200 firms want to hire about 10,000 associates and as the article explains “That astonishing number equals about one-quarter of all the students who will graduate from U.S. law schools next year. To put it another way, the top 20 law schools will only produce about 6,500 graduates.” The article goes on to predict talent wars and salaries in the $200K range. All of which is wild (insert appropriate the market is mad etc. comment and wait for the firms to continue on the path) but another point from the article may be more interesting: Hiring techniques of firms are suspect.
If these numbers are correct, it could be that firms should invest in human resources staff closer to what other corporate enterprises use as way to mitigate what seem to be hiring errors (These methods are suspect as well but appear better than current firm hiring systems). Alternatively it may be that hiring from brand name schools misplaces trust in those schools’ admissions. Sure the people are smart and can be attorneys, but do they want to be one bad enough to suffer through the life of a firm attorney for years and/or do they aim to be a partner? More on that question and the nature of firm hiring is below the fold.
It may be that the person who is at the top of the class happens to be smart and hard working but not interested in being an attorney, whereas the one who is right at edge of the 20 percent rank is smart, hard working and thinks having the income, ulcer, and lack of personal life is the best way to exist. The firm may be what that person dreamed of and he or she will bleed for the firm. Furthermore, I wonder whether firms will start to look to non-top 20 schools for the truly hungry, smart, and hard working people who happen to have only started to shine later in their academic career. This idea is a Gordon Gecko riff: take the less privileged, smart, and hungry ones, they will give firms what they want. They may be harder to find, but my guess is that Career Services offices would love to show firms the stand-outs from their schools who have visions of sugar plum salaries in their heads.
Then again, the nonplussed “Hey, we are happy to see half of them go” view indicates that firms know exactly what they are doing: hire brand name graduates and other high PR value associates so that the firm looks smart and diverse, but rely on the idea that only a few will want to stay. After all, if a firm wanted to keep people around and salaries are starting to bump into $200k, better mentorship, flexible pay and hours (i.e., true limited billing after the first few years with a lower salary) seem possible and are options that some might desire. To be fair I know a few people who have managed to get such deals from large firms, but they are rare and seem to cut against the pyramid model. There is more to say on this topic (especially about why I think a few years at firm can be a good thing), but I will stop here.
August 2, 2007 at 10:29 am
Posted in: Law Practice
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Responses (3)
A.J. Sutter - August 4, 2007 at 3:05 am
The pyramid model has been around for a long time. It was there when I began my career at a “big” (ca. 210-attorney) Wall Street firm in the early ’80s (late ’70s, if you count some time as a paralegal at the same firm before law school). One difference was that in the 1970s and 1980s, firm growth tended more often to be organic, rather than by M&A. So there was room to incorporate more of each entering class into the upper levels of the pyramid. At the same time, making a lateral move as an associate was difficult, since many hiring partners had the attitude that you should spend your whole career at one firm – after all, they had. Nonetheless, the philosophy was quite clear: during one interview, ca. 1987, when I asked why they were looking for a mid-level associate I was told by the partner (a Brit, whence his beautiful diction): “Well… to fill in the interstices of the pyramidal structure, of course.”
With firms so much huger now, and the bases of the pyramids so much broader, obviously a larger absolute number of folks will need to exit. Moreover, free market culture has made partners more mobile and clients more portable, meaning that partner-level replenishment is less dependent on associate advancement than in the hoary days of old. It seems odd to blame associate mobility on associates’ attitudes when the structures determined by the partners necessitate it. Given the Gizah-like durability of the pyramid model, law firm hiring patterns seem well-tuned to it. If law firms would adopt a flatter profit-sharing structure, attorney populations at firms might be more stable (right). As it is, it’s wise of young attorneys to plan for life outside a firm after spending a few years acquiring some practical professional skills. I wish I’d been so forward-looking; it wouldn’t have taken me so long to discover how much more there was to life than being an equity partner.
Deven - August 4, 2007 at 10:51 am
A.J., thanks for the comment. To be clear I am not blaming associates for their attitudes or leaving. Rather, I find it interesting (and bit funny) that firms and the articles about them try to equate so-called happiness with retention at all levels. Yes, associates that are happy may stay longer to that allegedly golden point of high charge to client and lower cost to the firm. But as you point out (and I was saying) the pyramid structure of its nature means that firms will leave. Maybe the focus is not on making partner but the perception that mid-level movements cost the firms money. On that point there seem to be two possibilities: 1) mid-level laterals (and parnters) as you note are common, so one could see whether the associates are merely trading for a grass-is-greener and no one here knows me from my green attorney days place and 2) some are leaving earlier to find how much more in life matters than the firm. If the second is the case, then firms may still be making errors in the type of person they hire. But given the structure of the firm, too many folks who really want to be part of the firm forever will crash the system. All which is why I suggested that firms’ really do know that at least 50% of the people they hire are not people they care to see stay for a host of reasons.
A.J. Sutter - August 6, 2007 at 8:10 am
I think we agree on most points. What I was trying to express in my rambling way was *definitely* the firms know what they are doing, because they couldn’t survive without those bottom of the pyramid folks being there for a while, and they also couldn’t survive (in their current economic structure) without the eventual exodus of those associates either. The fact that some who leave might be motivated to look for saner lifestyles (your reason (2)), I do regard differently from you: from firms’ POV voluntary departure is a relief. Speaking from experience in multiple angles of this issue, lawyers at firms don’t enjoy having to lay off or fire people any more than anyone else does, and if anything tend to be wimpier about it than are major corporations. So I wouldn’t say they’re making hiring errors — by and large it works quite smoothly, at least from the partners’ viewpoint.
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