Tuesday, August 04, 2009

Jones Day apparently thinks it's better than we are. Or at least one of their partners wrote a memo claiming so. Didn't name us personally, but I'm sure we're one of the firms he's referring to. "[P]rotecting partners' incomes on the corpses of associates and staff," "slash[ing] and burn[ing]" -- I'm pretty sure that's us. Describes our behavior in this economic downturn pretty accurately.

I'd like to argue in our defense. What's wrong with firing staff and associates? What's wrong with protecting partners' incomes? What's wrong with using the recession as an excuse to trim the dead weight and put the firm in the best position to thrive not only when the economy recovers, but right now?

Why not protect our partnership above all else?

Our value is in our partnership, entirely-- sad to say, but staff and associates are fungible. No firm in the top 50 can stand up and say its associates are any better or any different from anyone else's. No matter how discerning the hiring partner wants to think he is, no matter how many times you read a resume or how carefully you evaluate a second-year law student's ability to eat lunch at a fancy restaurant without choking, we're all interviewing the same pool of students and making offers based on four or five twenty-minute interviews and a cursory glance at a transcript.

We're all making the same offers to the same students, and they're choosing us based on whatever intangibles they can pretend set one firm apart from the next, but, really, if you switched our first year associate class with Latham's or Jones Day's or any of the top firms, it's a crapshoot. And once the economy recovers, we'll be able to go out and pluck a whole new batch-- a whole new, younger, cheaper, hungrier batch-- of associates to do the scut work. You think law students are going to be in a position where they're turning down offers anytime soon? You think they're going to care which firms laid people off and which didn't? They're going to be grateful for the jobs. And it's not like they all can't do this work. We're not asking our associates to do rocket science. Any graduate of a decent law school can do everything we ask them to. That's why offer rates for summer associates are 95%+, everywhere. And that's why in good economic times, no one ever gets fired. We can pretend we have the best associates, the best training, the best whatever-- but it doesn't matter even if we do. We just need bodies. Bodies to bill out to clients, bodies to do document review, bodies to burn out and throw away when we're done with them.

So if the associates don't matter-- and, sorry to say, they don't-- why not dump them when we don't need them, save the money, and hire some new ones back later?

The alternative is a fair bit worse. Jones Day may be proud of lowering partners' incomes to save associates, but how happy are the partners about it? How many wouldn't be just as happy keeping their old salaries, or even getting bigger ones after we cut expenses by 30% by firing the idiots we don't need anymore? Truth is, not everyone is so giving. For a lot of us, there's a number we're waiting for-- a number in the bank account that tells us we can finally leave and not worry about our future. The faster you can get me to that number, the more I'm willing to stick around. So why not move over to a firm that's willing to fire people to protect my partner income?

And as far as clients? What do they care? We're service providers. We provide good service, what difference does it make whether or not we're laying off staff and cutting summer programs? In fact, we lower our overhead enough to trim 10% off the bill, and I think they'd be mighty happy with that trade-off.

Associates felt no loyalty to us when times were good. They left in the middle of projects, they went in-house, they switched firms at will. Why do we need to be loyal to them now? How about we reward the people who make the business run, who bring in clients, who actually add value through their own competence and hard work? Partner vs. associate, I choose the partner, every time.

Take that, Jones Day.

Well, well. There you have it. The typical response from the type of person and firm I always have and always will stay away from. The difference between you reaching your number and you ruining a person’s livelihood (especially in this type of economy where even the most achieved associates are struggling to find jobs) is not something to take lightly. You were once an associate too (I can only guess), except that you were part of a generation of lawyers that were provided ample training and meaningful support from your partners. These days, its all corporate, associates are treated like objects, not investments, and your own words are the epitome of this current abnormal culture. People do matter. People are starving. Young aspiring lawyers took on debt so they could build a successful career, work hard, and achieve security and prosperity for their families. Instead they are left to wonder if they can pay their debts and feed themselves. Your train of thought is so temporary and closed minded (typical these days of a big law partner) that you forget these are people and just “billable zombies.” Of course I understand the economic struggles of even partners in these tough times – and many partners deserve to prosper – but is there a big difference between you eating caviar every night versus every other night? Maybe, just maybe, the partners at Jones Day, although they may not like the option of reducing their income, get some satisfaction that their colleagues (a.k.a your fungible “billable zombies”) can go home to their families and sleep with the satisfaction of knowing they can feed their kid tomorrow and provide for their families. And when times are good, TIMES ARE GOOD. Partners leave, associates leave, heck all people leave their jobs – but so what. For one, the people that left your firm are not there anymore…so, in fact, your punishing those who were loyal to your organization – not much sense in that I would think. Unfortunately, lawyers are smart people but lack the creativity to navigate us through these tough times.
Amen! Seriously, I loved the book. It is also the reason Apex is going to law school.


Now with T-shirts!
If partners are the ones who benefit most when the firm makes profit, why aren't they the ones who suffer most when it loses money? Partners want all the benefits with none of the risk.

As for what clients think, do you think they really want work done by partners and senior associates that could be done by newer associates for half the billable rate?
The last paragraph is the real point. Commitment is a 2-way street.
The spread between partner/senior associate and newbie associate salaries is not really that significant.

And would you rather have an expert do your work in half the time, or have a first year get their training at a rate that is nearly as much and for product that takes twice as long to complete?
Fact of the matter is that when the good times return no kid from a T14 school will be advised to sign on with firms like Latham and Orrick.

Have fun at Brooklyn Law's OCI
Your 'fungible associate' theory is going to be put to the test in the near future. The only magna/law review types Latham is going to be recruiting in the next 4-5 years will be from Cardozo caliber schools.
Great article. Very accurate. A Firm is made up by and for its investors. The only difference between the furniture and an associate is that the furniture doesn't go home at night.
"For a lot of us, there's a number we're waiting for-- a number in the bank account that tells us we can finally leave and not worry about our future. The faster you can get me to that number, the more I'm willing to stick around."

Wow, what about love and respect for the law? Participation in a valuable profession? If I was a GC and I sensed any partner at a firm was just in it for "a number", I'd fire that firm as fast as possible.
"For a lot of us, there's a number we're waiting for-- a number in the bank account that tells us we can finally leave and not worry about our future. The faster you can get me to that number, the more I'm willing to stick around."

The problem with this theory of yours is that while it is true for some types of people, those types never actually get to that number because as they close in on the magic number goes up. The boat, or house or island or whatever they want grows larger and larger so they need more and more. It is always just one more year or two or three. And they've spent so much time chasing that number they've alienated their family so now they can't stand to retire and be around their spouse. So it is either divorce where you lose half of what you were accumulating, or stay at work where at least you can continue to treat people like crap and feel self important about it. Either way you never really leave do you?

If that's your idea of life AL, go for it. Just don't expect me to do business with you.

Maybe Jones Day has it right. Maybe their partnership has decided they are willing to lower their personal financial expectations for something much more important to them, their personal integrity. And of course maybe the JD memo is just a load of crap. Those of us NOT a JD partner won't ever really know.

I believe people can be interested in more than just money. I believe that a lot of the JD partners do really believe what was published in that memo. And I believe that they will come out the other end of this crisis is great shape financially and personally.
The funniest thing about these comments is that they're not funny. After his hiatus, does anon lawyer have to start from scratch? Seems that people have forgotten that he's writing satire.

But wait, considering the original post, also seems that AL has forgotten that he's writing satire.
"How about we reward the people who make the business run, who bring in clients, who actually add value through their own competence and hard work?"

So your position is that ONLY partners add value? That is a specious argument at best. Without some staff and associates, the firm does not run. At least in the case of multi-partner firms, and especially so in "biglaw" firms.

Do I agree that the partnership, which IS the business, needs to be protected? Hell yes. Without it, there is no need for the associates and staff.

That said, the value is not in the partnership in and of itself, but rather, in the services that partnership is able to sell to clients. If the partnership can't function, it has no value.

I happen to be in favor of law firms running like a business. It's about time this happened.

Your point about associate interchangability is a perfect example. If they are so much the commodity, then why are they so highly compensated given the true skills/value they bring to the table?

I think the Jones Day position is equally wrong to the other end of the spectrum.
Law students, and junior lawyers, are enamored with their own importance. The post may not be sincere, but it's pretty close to the truth.

Who cares if (as suggested by the first commenter) this is the type of firm you will "always stay away from?" Why should the firm care about that? The above comments notwithstanding, firms ready to pay top dollar will not have a hard time recruiting associates for the foreseeable future. Recruiting isn't driving business decisions these days, profits are.

The JD memo raises interesting points -- it will be truly fascinating to see which firms come out of this period in better condition. Seems to me that JD is whistling past the graveyard. If their PPP goes on a downward trend (which the memo seems to suggest the firm should be willing to accept in order to protect employees), they'll start losing the very partners that have made the firm what it is. Clients are no more loyal than associates.
You live in a jaded world my friend.
This post is a good example of how anonymity leads people to say things in a manner that they would not normally be said, though I've found through my biglaw experience that a lot of lawyers have a tendency to go off the cuff more than most other people. Perhaps that's why I find them so annoying to talk to.

Don't get me wrong. I like people with a little edge and there is truth in what this post says. People are quite often driven by self-interest (Ayn Rand not being the first to point that out). This self interst leads them to act at the exclusion of others. This exclusion causes the others to go, "Hey, WTF!" Blah, blah, blah the struggle for society's scarce resources goes on.

I like the comments, though, that say something like you should learn what's right! Or the yeah, go on with yourself. But really I like books without much of a story just a description of how people act toward each other or casual conversation without much of a point. It may seem like rambling to those who have a line to cross at some point in the distant future. But I ask, after you cross that line, who cares, you still have to live with yourself and if you think that you'll be able to live with yourself when no one else is, well, well, that's about the funniest thing I've ever heard.

That's why I think it's important to keep up the social niceties, temper the crude commentary, learn to save others from our worst selves and learn to how spend time with each other whether in business or social settings. Because honestly, who are we kidding? It's a cold cruel world because we made it that way.
OMG! Do any of the current readers of this blog understand that it is intended as satire?!?
I understand most of the arguments presented by the writer but let's try a little thought experiment. Let's say your a young equity partner right now. And let's say that you'd like your firm to keep prospering throughout the remainder of your career so you can haul in more profits. Well the problem you have is all of the older equity partners sitting over you are going to retire eventually. And when that happens you have to replace them and the business tied to you (because under your world view why the hell should a client stay loyal to any firm once the person who handled their business is gone). You are also going to need partners to replace the retiring ones. These will have to be people who can bring in business. Eventually partners can only come from one source, associates. Now how exactly are associates going to bring you in business if they are treated like a fungible quantity how exactly they are ever going to learn how to bring in business or become capable of anything other than grunt work. Of course you can just skim off the work of other firms for a while but eventually it creates a tragedy of the commons issue among like minded firms. If no one is bothering to train associates then you are going to have to rely on people who naturally posses the ability to create value by generating business (a theory you don't seem to subscribe to yourself because you believe all associates are without skill and replaceable) and random chance. That seems like a pretty shortsited business model to me.

Also keep in mind the fact that those top law students you are recruiting come in a limited quantity and when they are coming out of school and have a choice again who do you think they'll pick first? You'll get the scraps from other firms tables. Not to mention that I was under the impression that it is senior associates and partners in their first few years that create the most value for a firm relative to their cost. That is where your whole leverage model comes in and without ever bothering to train associates and treating them like furniture you aren't going to get useful senior associates.
Because all the talent will want to work at Jones Day now. That's why.
8:19 -- incredibly naive and simplistic. The only "talent" that have any realistic choices right now are top law students and associates who have been laid off. Associates with jobs are not looking to enter this job market unless they're sure to lose their jobs soon.

So firms are choosing between attracting law school and laid off associate "talent" with job security and a non-binding implication that employees will be treated better at firms working on the Jones Day model, or attracting lateral partner talent (with direct implications to the bottom line, when a book of business moves with them) by increase PPP. The JD memo suggests that emphasis on the former will prove more profitable in the end. The OP (tongue in cheek or not) suggests that this may not be the case.
Anonymous Lawyer, you don't understand the business. If associates were truly fungible, firms wouldn't pay $160K per year and spend millions of dollars on summer programs and recruiting. They'd simply pay $75K (or less) and roll into IUPUI, Hofstra, John Marshall or some other gutter school on the last day of school to fill out their associate classes (and indeed, this is what much of the world outside BigLaw does).

There's a lot of reasons why firms feel the need to incur the substantial expenses they do to maintain associate classes of top tier attorneys. I'm not going to bother enumerating them for someone who misunderstands the BigLaw business model at such a basic level.

- Anonymous Commenter
I'm more than willing to be that "Anonymous" is another one of these Partner's who thinks he's too good to do some work - like read his own email and so he has his secretary print it for him.

He's exactly the type that needs his entire support staff from associates down to case clerk all take a week off. Let him see how capable he is all by himself.
first time here in your blog anonymous lawyer! Have a nice day!
interesting books
PEOPLE...get it straight.

Like a few others have tried to point out: This is satire.

And it's flippin' hilarious to boot.

I guess it's because most of you that are reading this blog are Lawyers. AND, as we all know, most lawyers are serious, and boring, and ugly.

(F.Y.I) I'm using SATIRE here.
Super blog and nice writings

Thanks for all posts

Thanks in advance for coming posts...

Keep writing...............


Biz and Legis
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super blog about Anonymus lawyer


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