THE DEVIL (OR MAYBE GEORGE STEINBRENNER) MADE LAW FIRMS DO IT

Oops – here comes another Dennis Miller-type rant.  And, frankly, it’s simply because I thought I’d heard it all.  First, I thought Armageddon must be upon us when I read in The New York Observer article Profits vs. Partners that Peter Zeughauser of The Zeughauser Group believes, with respect to law firm associate starting salaries,

[T]he next raise will be to $200,000 and could take place “as early as within the next six months. On the outside, 12 to 18 months. And a move to $250,000 after that.”

Then, if that wasn’t enough, after I’d been revived I read this morning at law.com, in an article from The National Law Journal entitled Firms Say Client Expectations Drive Up Associate Salaries (subscription required) that, “Law firms are blaming market demands for the latest round of associate salary raises . . .”  The apparent logic that it’s law firm clients’ fault that associate starting salaries are spiraling out of control can be found in these 2 sentences in the article:

First:

This summer's associate salary increases to $160,000 are a result of economic forces, say law firm leaders, that have required them to fall in line with competitors' pay in order to recruit top graduates from top schools.

And, then:

Those in law firm management admit that the raises make fledgling associates even less cost-efficient for law firms that hope they will stick around long enough to earn their keep. They also say, however, that their clients expect them to recruit law graduates from prestigious schools and those from the tops of their classes.

The topper for me, though, was this quote:

"What are firms to do?" said Rob Walters, a member of the executive committee at Houston-based Vinson & Elkins. "Associate salaries are out of whack."

What?!  That sounds eerily like, “The Devil made me do it.  What am I to do?”  Or, maybe, that “It’s all George Steinbrenner’s fault.  I just can’t help it.”  Well, gee, I guess I’d expect law firms to do what every other business does –  manage your business and get the  costs under control!  Outside of politicians and professional baseball team owners, I’m not sure I’ve seen another group of people less willing to be accountable for their own actions than law firms.  That’s just my opinion – I could be wrong.

Comments

[T. Rex]

"That’s just my opinion – I could be wrong."

Nice Miller-like tag line to the rant, but it's not just your opinion and you're right on the mark. A business model that allows the salary demands of entry-level, unproven, novices to result in an unchecked bidding war is a broken business model. The allegation that clients demand that law firms hire only the top students from the most prestigious law schools, and, therefore, the firms must pay those students whatever it takes to get them, no matter how much, should be tested by asking the clients whether or not this allegation is correct. Start with Mark Chandler at Cisco.