To Everything there is a Season

Obviously it has been a while since I have posted on this blog. Why is that? I suppose it is because I have accomplished much of what I wanted to with Law Career Blog as a solo blog. I felt I had important things to say on teaching and classroom etiquette; on law career decisions; on law firm practice; on mentoring, and more. And I have said many of them, so there you have it.

I am very pleased, though, that my posts continue to draw strong traffic month after month, year after year. What I have said here remains relevant, I think--but that does not mean I need to always rehash the same ground, all in the name of having new posts just for the sake of it.

So for now, my existing posts stand for what they are, and I am proud of them. Call me the Antiblogger, I suppose: I am blogging by not blogging.

In any event, the following is a list of posts that have generated the most interest from readers, some posts on subjects I think are particularly important, and some that are just fun. Enjoy!

Posts on Law School in General:

In a series of posts, I argued that if we want law schools to truly provide the academic and practical education that students (and employers) expect and demand, we should consider adding a fourth year to the law school curriculum. Not surprisingly, my proposal was universally condemned. Check out the comments.

See Is the Third Year of Law School a Waste of Time and Money? and Is Law School Itself a Waste of Time?

I think that too often, law students don't step back and think about law school and their future careers in a broader perspective. That's understandable given the workload in law school, but it's still unfortunate. My friend and colleague Gene Theroux visited Mississippi College School of Law once to speak to students about his storied career--he opened the first western law firm offices in China and the Soviet Union--and he had wonderful advice for them. Ostensibly the talk was about globalization, but the heart of his message was to follow your heart and practice law the right way and for the right reasons. Sometimes we need to put our cynicism aside and hear things like what he said that day.

See Theroux Part Deux

Posts on LL.M. Degrees:

This trilogy of posts is perhaps the most popular series of posts on this blog--which proves that good things really do come in threes. Lots of discussion in the comments. See The Pros and Cons of LL.M.s, LL.M. Redux and LL.M.s Part 3.

Posts on Law School Exams, Teaching, and Class Strategies

Bainbridge v. Bowman. I wrote a law review article entitled The Comparative and Absolute Advantages of Junior Law Faculty: Implications for Teaching and the Future of American Law Schools--a piece I am quite proud of. In it, I use traditional neoclassical trade theory to analyze the advantages of junior and senior law faculty and make some recommendations regarding law school teaching. Professor Stephen Bainbridge of UCLA saw it, and he absolutely hated it. This posts includes our dialogue.

How to Improve your Law School Exams Grades. This wasn't a terribly controversial post--or so I thought until I received scathing comments two years after I posted it. Some fun back and forth on that one. Maybe I should've retitled the post Bowman v. Someone Very Angry.

Law School Orientation Advice. Pretty self-explanatory. My own favorite piece of advice: Don't spill a plate of food on your law school dean at the welcome reception. I actually did that--but lucky for me, I still graduated.

Computer-Free Week and Computer-Free Week, Part 2. There is a good deal of concern in the legal academy about computer use in the classroom. Is it beneficial? Is it harmful or disruptive? So one time I asked students not to use computers for one week to see what would happen. The results were pretty interesting, and as a teacher I found the feedback via the comments very useful. Perhaps the most interesting result was that student comments revealed just how prevalent the consumer mentality is among students--namely, I paid my tuition, so I can do what I want in class.

The Dilbertic Method. I definitely like this post about parallels between Dilbert's boss and the Socratic method. If you want to see the Dilbert cartoon I am talking about, you have to click the link in the article and then enter in the cartoon's run date on the Dilbert site.

Posts on Law Firms:

Much of the attraction to, and frustration with, big law firms has to do with the money they pay their associates. So I wrote some pieces on that subject--something I have firsthand knowledge about.

See Of Law Firm Culture and Compensation Schemes, The Problem of Law Firm Salary Distributions, and Big Firm Economics 101.

In another post, I wrote about associate pay and stress levels. In light of the recent savage downturn in the employment market, this post is perhaps more relevant than ever. See Why Associates Have More Stress than Partners.

On Interview and Job Strategies and Techniques

Job Interview Do's and Don't's. The name of the post says it all.

What NOT to do as a Summer Associate. You'd be surprised what some people do. Don't be one of them.

Posts on Movies:

Finally, I have had some fun with movies on this blog, and for some reason they were always movies starring George Clooney. First, I blogged about Syriana--see Syriana Misrepresents International Lawyers.

Then I wrote a whole slew of posts on Michael Clayton--a movie that had a lot to say about what it is (and is not) like to be a lawyer. I was interviewed by the Chicago Tribune about the Michael Clayton series of posts. See the following (not too originally entitled) posts:

Clooney v. Clayton, which is my review of the movie

Clooney v. Clayton, Part 2, about hyperbole in legal dramas

Clooney v. Clayton, Part 3, on whether there is such a thing as a law firm "fixer"

Clooney v. Clayton, Part 4, on the perverse incentive/reward structure of law practice

Clooney v. Clayton, Part 5, on how law practice affects your family life

Clooney v. Clayton, Part 6, regarding legal ethics

Clooney v. Clayton--Again, regarding my Chicago Tribune Interview

* * * *

So for now, that is where things stand. I hope you enjoy reading these posts as much as I enjoyed writing them.

Greg

More on the College Cost Reduction and Access Act

So after a very busy April and de facto blog holiday (blogiday?), I'm back to posting. Among other things, I will be taking a group of law students to Seoul, Korea to study this summer. That will be a lot of fun and the source of posts over the summer. But today's topic is something I have posted on in the past: law school debt and the College.

In September 2007 I blogged about the College Cost Reduction and Access Act (CCRA), which has been hailed in many quarters as "the single largest investment in higher education since the GI Bill." There's been a lot written about it; a good place to start, I suppose, is my September post, which gives a summary and links to some other very useful information online.

And then there's the recent post on the CCRA by nonprofit lawyer and blogger Fannie, who runs the blog Fannie's Room. Her comments on the CCRA are great (and more than a little frustrating. Anyone interested in the CCRA and student debt loads definitely needs to check it out.

More posts soon.

Partner Pay

In my last post, Attorneys Suitable for Everyday Use, I wrote about the growing prevalence of contract attorneys at U.S. law firms. It's my position that the use of such temp workers is part of a larger trend at major U.S. firms. That is, it appears to me that law firm employment at all levels--including equity partner, non-equity partner/of counsel, and associate positions--is becoming less financially lucrative than it has been for the past two decades.

An article in the February 5, 2008, ABA Journal backs this view up. The article reports that at the law firm of Greenberg Traurig, equity partner compensation is being frozen for the time being. In one sense, this is nothing new: as part owners of the firm, equity partners reap the rewards of huge profits when they occur, but they bear the risk of shortfalls. On the other hand, the fact that clients are increasingly conscious of legal costs means firms are increasingly constrained in terms of raising billing rates or billing their clients for more hours. The fact that mid-sized regional firms can increasingly compete with national firms in many areas of practice (e.g., corporate M&A, major projects, litigation, even international trade law) puts further downward pressure on fees. And as I said in my previous post, one way to reduce costs (and thus maintain profit margins) is to use cheaper lawyers. Enter the contract attorney.

This ABA Journal article is just one piece of evidence, and it can be dangerous to reason from the specific (Greenberg Traurig's decision) to the general (the legal market at large). But this piece of evidence does support my view that the times they are a-changing. And it is my belief that similar decisions are being made at other U.S. law firms--they're just not making headlines.

Attorneys Suitable for Everyday Use

Over at JDWired, blogger Joe Miller has a post about a contract attorney survey he recently conducted via his blog. For the uninitiated, a contract attorney is not a lawyer who practices contract law. Rather, it's someone who is hired on a temporary basis to help with a particular project. Synonyms include "document review attorney" and "temp(orary) attorney." Contract attorney work is not all that glamorous, it pays less, and there is (by definition) not a lot of job security involved. But it's work, and in a tight job market that's something. I previously blogged about contract attorney work here.

The findings of Miller's survey are interesting. Here's the gist of his post and his findings.

(1) 44% of contract attorneys (responding to the survey) were minorities. By contrast, only 16.72% of the associates and 5.01% of the partners at the firms these contract attorneys were working at were minorities. That's disturbing.

(2) Almost all said that their staffing (temp) agencies provide no access to professional development programs. Not so good for the attorneys, and potentially bad for the agencies as well.

(3) About half said they had worked as contract attorneys for more than one year after graduating from law school, and that the work was their "primary source of income."

(4) Staffing agencies typically do not provide health care. And since contract attorneys are temps, they generally won't get healthcare through the firms they work for either.

Miller concludes that "[c]ontract attorneys are an untapped resource both for improving diversity and reducing skyrocketing client costs." He then notes that "[t]he ABA’s 1992 MacCrate Report urges the legal profession to invest in all lawyers. So far, we are not seeing that."

In a sense, what Miller's survey points out--to me anyway--is that the phenomenon of the contract attorney is part of a larger restructuring of the U.S. legal job market. That is:

(1) Partnership is becoming ever harder to get, with billable targets being raised. At the same time, it is perhaps getting less lucrative. So fewer people seem to be going that route--either by choice, or because they are denied full partnership.

(2) Non-equity partnership positions (and Of Counsel positions, which are much the same thing) are becoming more attractive long-term positions. They are attractive both for people who want to avoid the equity partner rat race as well as (by default) those do not win it. But many of these positions are also getting less lucrative, as firms restructure their non-equity partner/Of Counsel contracts.

(3) Associates at big law firms make scads of money, but the positions can be hard to get in this tight job market. There's ever-increasing pressure to bill more hours, and there are reduced chances at partnership (see above), so people tend to rotate out of associate jobs after a few years.

(4) All of the above mean that contract attorneys may have a larger role to play in contemporary law firms. Contract attorneys are of course cheaper than any of the above. Firms can lower their bottom line by hiring contract attorneys to do the "lower end" legal work that needs to be done. (For insight into such work, see this post on My Attorney Blog.) And as Miller points out, not only can firms lower their own wage costs (read: increase their profits), but they also can bill these contract attorney out at lower rates--which will help keep these firms price-competitive vis à vis the competition. With an economy teetering on recession and legal work being not only outsourced but even offshored, this is no small consideration.

College Cost Reduction and Access Act, Part 3

On September 27, 2007, President Bush signed the College Cost Reduction and Access Act into law. I previously blogged about this very significant piece of legislation here and here. Several additional points come to mind about this legislation, so I am setting them out here.

First, the act does seem to address the problem of spiraling higher education costs in a fairly head-on manner. I should note that as Kiplinger's Personal Magazine reported in an article on 9/28/07, the act is being funded, at least in part, by reductions in federal subsidies to student loan companies. So that puts some of the bill sponsors' statements about this being "no-cost" legislation in better (and somewhat more accurate) perspective. (See my previous posts for more regarding that point.)

Second, while I think this act is a welcome development, it is worth pointing out that being in favor of education is sort of like being in favor of Mom and apple pie. People generally are not against education per se. So that explains much about the bill: popular subject + big problem = grand legislative solution. That's not a criticism; it's just an observation. Hopefully the impact of this new law will be positive and it will help many in need of student debt assistance. An Associated Press article that ran nationwide on 9/30/07 highlights the problem quite well.

Third, as astonishing as it may seem to people outside academia, tuition costs at most universities do not cover the cost of education. Does that help explain the rapidly rising cost of higher education in recent years? I think in large part it does. True, state colleges and universities receive state subsidies--but in many cases those subsidies have been reduced in recent years. Also, both private and public universities look to private donors for donations to build up their endowments, and those monies are used to fund school programs. And, of course, colleges and universities also obtain state and federal grant money for many of their programs.

But the fact remains that tuition increases are sometimes hard to resist. For example, what happens when a school has little endowment--or even rich endowments but still needs more capital? Neither situation is uncommon. If students are willing to pay more, and if the school is able to charge more (many states limit or cap public institution tuition rates by statute), then there is strong temptation for schools to raise tuition rates or tack on special fees. And it's a really tough choice, I think, because the students pay either way: either schools raise tuition, and students bear the brunt of it, or schools do not, and therefore cannot fund many much-needed educational programs. To give just one example, higher educational literature puts a great deal of focus on the importance of "active" learning (as opposed to passive lectures in big halls)--but active learning is often more expensive. So sometimes the choice might boil down to providing better and more costly education versus controlling costs at the expense of educational quality. Again, either way, it's the students who pay.

I fully realize, of course, that more money does not in all cases equal better education. Yet sometimes it does. And as schools offer more innovative programs like clinics and externships, focus on reducing faculty-student ratios, and invest in technology to make the classroom more interactive, someone has to foot the bill. The College Cost Reduction and Access Act hopefully means that students will foot less of it over time. But if it does not completely solve the problem--and I don't think it will--then we are back to the question of who pays. If rich donors come forth voluntarily, that's great, but there will be some institutions left out in the cold. If we decide to federally subsidize higher education that might be great too, but it also likely would be fraught with problems.

Like any good (bad?) law professor, I am doing a far better job of posing questions and framing issues than I am of offering answers. For me, at least right now, the answers are unclear. What is clear, however, is that in today's information economy, education is of paramount importance for the nation's economic well-being. Reducing the debt burden of students is an investment worth making.

PS: Education is a service, and I blogged about the rapidly rising cost of services last year in two posts on the subject of Baumol's Cost Disease (here and here). Those discussions are relevant to this topic too for those who are interested. The gist of Baumol's Cost Disease is that the cost of services often rises faster than the overall rate of inflation, because while we can automate many processes or make them more efficient--and thus hold the price (and rate of inflation) down--it's harder to automate certain services like teaching. Which from a purely self-interested point of view is not necessarily a bad thing.

Law Firm Salary Distributions, Part 2

The Wall Street Journal's Law Blog had a good post today entitled The Dark Side of the Legal Job Market. It concerns law firm salaries and the disparity between the top of the class and the rest of the class--and also between top schools and regional schools. The gist is that the top grads get great salaries, but the rest don't--and that when this is combined with mounting student debt loads, it's a structural tension that will have to be resolved in one way or another. In other words, the message is that things can't go on as they are now, and that changes may be substantial.

I blogged about law grad salary disparities in another recent post. As I discussed in that post, these figures have interesting implications for the future of law schools beyond mere graduate salary distributions.

When reading the WSJ Law Blog post above, bear in mind that it blends two points that are actually distinct:

1. Grads of top law schools tend to get more of the "Big Law" (read: Big Money) jobs.

2. Top grads at any law school tend to get more Big Law jobs than their classmates with lower class rank.

In other words, if you go to a national school, you have improved your odds of landing the big paycheck, but you have not guaranteed it. Conversely, if you go to a regional school, fewer people from your school will land these big jobs. But some will. These are obvious points, perhaps, but I think they are worth making, since the WSJ article jumps between the two without distinguishing them.

College Cost Reduction and Access Act, Part 2

Last week I posted about the College Cost Reduction and Access Act (my previous post is available here). In that post I referred to a "soon-to-be-available article" by Professor Philip Schrag of the Georgetown University Law Center that would give a very good, technical analysis of the act. He has just posted his article online here. I recommend it for anyone wanting to understand this act better. Another summary of the act, by the National Association of Student Financial Administrators, is available online here.

College Cost Reduction and Access Act

Last week, Congress passed the College Cost Reduction and Access Act, which President Bush has indicated he will sign. It has been hailed by the House of Representative's Education and Labor Committee as "the single largest investment in higher education since the GI Bill." Interestingly, a separate press release from that committee explains that this "investment" actually comes "at no new cost to taxpayers." A cynical soul might point out that this is not so much an "investment" as is it a "cost reallocation," but I suppose the larger (and more important) question is whether the act will be beneficial.

As with much legislation passed by Congress, the act is long and contains numerous provisions. Text of the full bill is available here (click on "Text of Legislation," then choose option #6--the version "Enrolled as Agreed to or Passed by Both House and Senate"). For purposes of this post, I will focus on two provisions that might affect law students and recent law graduates.

Section 203: A High Debt/Low Income Provision

Section 203 of the act would limit loan repayments to 15% of "discretionary income," as that term is defined in the act. Without getting into a great deal of detail or math, the point is that monthly payments on student loans, which by the end of law school can rival a mortgage, will be capped, with the cap level depending in large part on the loan holder's discretionary income. So if you want (or have) to take a lower paying job, then your loan repayments cannot eat up all of your income.

On the one hand, this means that payment schedules might be stretched out for a long, long time--just like if you were to make the minimum payment on existing credit card debt. On the other hand, at least it helps manage cash flow. And on the third hand (there's no limit to the number of hands when discussing legal issues), any remaining principle is forgiven after 25 years.

That third hand provision is astounding, in a good way. I wonder exactly on whom such costs will fall, and how that jibes with the Edlabor Committee's claim that the legislation imposes no new costs on taxpayers. It certainly imposes a cost on somebody. But as worded, this section looks like it will operate as both a protector of loan recipients' cash flows/discretionary income, and also as a loan reduction provision.

Section 401: Accelerated Debt Forgiveness for People in "Public Service Jobs"

Section 401 allows people who intend to work for 10 years or more in a "public service" job to obtain debt forgiveness after 10 years, instead of 25. For someone who has funded expensive college and law school educations with student loans, that is an enormous write-off. There are of course technical requirements and limitations, which I do not want to go into here. But it is worth setting forth the definition of "public service job" in full. It is quite broad.

PUBLIC SERVICE JOB- The term `public service job' means--

(i) a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or

(ii) teaching as a full-time faculty member at a Tribal College or University as defined in section 316(b) and other faculty teaching in high-needs areas, as determined by the Secretary.

So clearly, a lot of jobs, including jobs in the public interest legal sector, are covered. There are many law schools in the U.S., including my school, that have started offering Loan Repayment Assistance Programs, or LRAPs, which are intended to help graduates who pursue low-paying public interest sector jobs. These programs should stay in place (at least I hope they do). And perhaps the College Cost Reduction and Access Act might be best viewed as a great big federal LRAP program--one that is not limited to law graduates. Which is a good thing.

Of course, being a professor of Administrative Law, I will be very interested to see the regulations that are promulgated pursuant to this statute, and exactly how the act's provisions play out at the regulatory level. As any lawyer or law student knows, the devil is in the details.


NOTE: For more details concerning the act, I refer you to a soon-to-be-available article by Professor Philip Schrag of the Georgetown University Law Center. Professor Schrag currently serves as Vice-Chair of the Committee on Government Relations and Student Financial Aid, which is part of ABA's Section of Legal Education and Admission to the Bar. He has been very involved in this area, and he has drafted an excellent technical analysis of the act, which will be posted online at the Social Science Research Network (SSRN) and also will be published in the Hofstra Law Review in the fall of 2007. (I have an advance copy that he has requested not be made available online, and it's very good.)

ADDITIONAL NOTE, SEPT. 18, 2007: Since the original date of this post, Professor Schrag has posted his article online here.

The Problem of Law Firm Salary Distributions

In a recent post I discussed concerns over the latest big law firm salary hikes and concurrent slowdowns in the legal job market. On the heels of this, the Empirical Legal Studies blog (elsblog) has a post about NALP salary data for first-year lawyers. The results are fascinating, and they comport with a lot of the comments received on this blog by readers--namely, that lower end legal salaries stay relatively static, while upper end salaries grow faster than inflation. So in a sense, the salary problem is two-fold: the upper end may grow fast and result in layoffs in a downturn, while the lower end suffers from a lack of growth that makes repayment of debt--and pursuit of careers at the lower paying end of the spectrum (including but not limited to many public interest and government jobs)--not very feasible.

The elsblog post, which is by Bill Henderson, is excellent. Make sure you read the reader comments. Henderson's comparison of the law school market to ordinary markets is quite insightful. He is right that institutional actors in the law school market--in which the economic utility pursued is often prestige--certainly will behave quite differently than institutional actors in a market in which monetary profit is the goal. In fact, I might add that the law school market can be broken down into several separate smaller markets--namely, (a) the nonprofit national schools, (b) regional nonprofit schools, and (c) proprietary schools. Each of these should have different business models. In fact, it is pretty clear to me, based on my anecdotal experiences talking with administrators from these different types of schools, that what they seek to maximize is indeed different, and that they thus behave very, very differently.

Henderson's post also is a good (if indirect) reminder that law schools are comprised of faculty who are rational actors, and that they will seek to maximize their utility--which is not always the same as maximizing societal utility. So the trick, then, is to design a system of incentives and rewards that result in law school actors' utility coinciding with a reasonable conception of public utility or welfare. That is admittedly difficult in any market, but perhaps especially so in a market in which many of the actors are well-entrenched (read: tenured).

Many of the comments in the past on this blog have bemoaned this very fact. The irony, perhaps, is that applying academic tools to the subject of law schools identifies these very same problems. Which is not to say that I doubted previous commenters. But it is to say that if law professors and other academicians pride themselves on using scholarship to identify problems and search for solutions (which is much of what legal scholarship tries to do), then it's entirely appropriate to turn these tools on ourselves.

Many scholars have already done that. A search on Google Scholar for "law school teaching," for example, turns up scads of law review articles on the subject. But it's interesting that a single set of data on law school salaries leads off in so many interesting directions.

Economic Slowdowns and Associate Salaries

There has been a good deal of talk lately about associate salaries at big firms, and how they continue to go up and up. Most recently, the rumor was that after first-year associate salaries at national firms hit $160,000 this summer, they might hit $190,000 by the end of summer.

But now, things seem to have ground to a halt. Above the Law reports that, in the midst of all this bubble talk, the bottom has dropped out of the corporate law market. Many lawyers at big firms now have nothing to do.

This, of course, is really no surprise. After all, the economy is slowing, or at least teetering, and there is a good deal of concern over the mortgage market and its effect on the economy. The Fed is taking proactive action to avoid recession. Why, in such uncertain times, would companies enter into high-flying deals or initial public offerings? Many wouldn't, of course. Which means that busy, busy corporate departments are no longer so busy.

There are several points worth making here. First, this is certainly not the first time this has happened. In the early 1990s, for example, corporate associates at my first law firm played football in the hallways because there was nothing else to do. No kidding. Like stock market volatility, such market swings have happened before, and they will happen again.

Second, law firm wages are generally sticky downward. So, absent some sort of collective bargaining by associates to reduce associate pay, associate salaries probably will stay where they are. They will not go up, but they won't go down, either. (Bonuses, however, certainly will be reduced or eliminated.) That means some people will be sacked.

On the other hand--and I suppose this is my third point--while associates historically have not voted to reduce their salaries, large salary increases in recent years have led some big firms to implement two associate tracks--one with higher hours and pay, and one with fewer hours and pay, plus a longer track to partnership. It's also worth pointing out that the latter "quality of life" tracks have developed largely at the request of associates. So it might be that some firms would "allow" associates to choose which track they want, as a means to actually reduce salaries. Not much of a choice, but better than outright firings. In such a case, however, I would not expect "official" salaries to drop--just the de facto ones.

Fourth, once things do turn around, law firms will lag in hiring badly needed associates. In recent decades, firms have been very cautious about hiring new associates at the beginning of an economic recovery. Once bitten, twice shy, I suppose. So that means associates at that time will be absolutely swamped with work, even moreso than usual. No more playing football in the halls--but at least there will be more job security.

Fifth, don't forget that the law market is diverse, not uniform. Litigators are probably still very busy, and bankruptcy lawyers may be very busy soon. International trade lawyers are pretty much always busy these days. So not everyone will experience job insecurity or intramural sports in the halls. But since corporate law practices tend to be the primary drivers of industry-wide salary changes, further big salary bumps are likely on hold for at least the near future.

Finally, I fully realize that these pay raise and layoff trends are in the big U.S. markets right now, like NYC, DC, and LA, and not Charlotte, NC or Jackson, MS. But there is a trickle-down effect, and what happens in the bigger markets, if it is pervasive and long-lasting enough, will eventually cause changes in regional markets too. So whether you are a lawyer (or law student) in a big market or not, watch what's going on, because this may just affect you.

The Associate Crisis

Canada's Globe and Mail ran a story last week about skyrocketing US associate salaries and their effect on clients. Much of what the story has to say is not new, although it is interesting to see the same concerns being voiced from a Canadian perspective, and to see discussion of how these salary increases are spreading to other countries as well. Everything's global these days.

Several points the article makes are very good, and they tie into subjects of previous posts on this blog (relevant earlier posts are listed at the end of this post).

First, who foots the bill for associate pay increases? In direct terms, the clients do--but associates pay a hefty indirect cost in terms of additional demands on them, as well as the death of mentoring (as projects become more high-stakes). As the article notes, in-house counsel are more likely to say, "If a firm wants to give us a green, first-year attorney who charges out at $300 an hour, well, sorry. We'd rather have someone more senior who charges $525 an hour but can do the work in a third the time because they know what they're doing." Can you blame the clients? Of course not.

A significant side effect is that associates have less work to cut their chops on, and the senior people are busier doing that billable work, so there is a disincentive to mentor the juniors. And if a junior associate does get the work, there is far less margin for error, and often no safety net.

I once was told by a senior partner that in the "old days," meaning the 1970s, clients were far more willing to pay for junior associates to accompany/assist senior attorneys on projects for that client, because (a) the billing rates were not as high, and (b) because those junior associates would be inheriting this client's business. In other words, the clients were paying to train their future lawyers, which made some economic sense. Yet in today's market, that's a more expensive proposition--and even more importantly, those junior attorneys are likely to jump ship to another firm before they ever inherit that business. In the 1970s, lawyers were far more likely to stay with a single firm for their career than today, when inter-firm mobility is the norm.

Plus, clients are less loyal to their law firms than they used to be, and with good reason. There's more competition out there from firms who can do the work, and there's more opportunity to shop around (and even play law firms off one another). So, why would a company pay to train a very expensive junior associate who is unlikely to ever be in charge of the company's work? Rhetorical question, of course.

Second, we are seeing "a fundamental shift in the traditional law firm paradigm." According to the Globe and Mail article, Susan Hackett of the DC-based Association of Corporate Counsel believes that "general counsel will stick with long-standing advisers for bet-the-company work, but increasingly look to firms with lower cost structures for everything else." In other words, a multi-tier market for legal work is--indeed has--emerged. I experienced this first-hand in practice. Between the time I started law practice in the mid 1990s and when left for academia in the mid 2000s, my overall workload got much, much harder. This happened because clients pushed the easier work to smaller firms, and even in some cases to non-law firm consultants. And if these competitors could do the work for less, well, why not? So, we now have a legal market in the US in which many of the more standard areas of practice are experiencing growing competition (which hopefully keeps prices down to an extent), and only that work which is most difficult can be billed out at top rates.

The silver lining for top-end practitioners, of course, is that the work can be phenomenally interesting and challenging. I practiced international trade regulation in practice, and in my last several years of practice I confess to never being bored--and not just because I was overloaded with work. The issues and problems were fascinating, enormously challenging and intellectual. The easier work had melted away, and all that was left was a core of really tough projects. Once I was able to get myself inserted into the work stream (that is, once clients were willing to have me working on the project on a daily basis instead of a senior partner), that made things quite fun. Of course, I saw a number of associates who never got over that "no work" hurdle, and they fell by the wayside. And they were all smart people who could do the work.

I could go on and on about this subject, but I will stop here for now. Read the Globe and Mail article, and check out some of my previous posts related to this subject:

• Law Firm Salaries from the Client's Perspective
• Baumol's Cost Disease and the Practice of Law
• Baumol's Cost Disease and Lawyers, Part 2
• Beauty Contests and Legal Fees
• The Advantages of Flat Rate Billing
• Big Firm Salaries Going Up (Again)
• Why Associates Have More Stress Than Partners
• Law Firm Salary Wars
• Of Law Firm Culture and Compensation Schemes
• Why Law Firms Play "Hide the Associate"
• Law Firm Training is a Sham
  

And as always, I look forward to any comments from readers.

Law Firm Salaries from the Client's Perspective

Over at Legal Blog Watch, veteran law blogger Caroline Elefant recently blogged about associate salaries from the under-explored point of view of clients. It is common wisdom that any hikes in associate salaries generally get passed on to clients unless the clients push back or object. In other words, the assumption is that there generally is an inelastic demand curve for legal services--as prices go up, demand does not go down all that much.

Certainly that's not true in all cases, but it is not a bad place to start for purposes of discussion. Surely some types of legal projects--IPOs, white collar criminal defense cases and the like--are far less sensitive than others to the cost of services being provided (read: what attorneys charge). In fact, an assessment of what types of legal projects are more price-sensitive might be an extremely interesting and valuable empirical study.

But again, the generally accepted view is that the cost of associate raises gets passed on to clients. And I can say from my own anectodal experience that whenever large firm associate salaries go up, so do associate billing rates. Whether the same thing happens at mid-sized firms in regional markets might be another interesting empirical study.

But I digress. Elefant's post discusses in detail how the increase in associate salaries plays out in terms of cost to clients. Her post centers on an excellent discussion of the issue by Susan Hackett, who is general counsel of the Association of Corporate Counsel. Hackett's article on the subject can be found here. Both Elefant's post and Hackett's article are well worth reading.

My questions on the subject are as follows:

• Will Hackett's solution--she suggests that companies push more legal work to midsized firms in regional markets--lead these smaller law firms to underprice, and thus undercut, the larger ones? She suggests that these smaller firms can do most work just as well as the really big firms, and for much less cost. Will this result in a market correction against escalating legal fees?


• Or, will Hackett's solution just mean that the biggest firms end up with the hardest, most specialized work that other firms aren't as good at doing? If so, is that an undesirable outcome? Or might such segmentation of the market actually be preferable, in that big firms will be able to justify their very high billing rates for very difficult work?

This is a point on which my thinking is not yet congealed, and I can summon anecdotal experience from my own days in practice to support either view. Perhaps both are right to an extent. And perhaps that's the real point: perhaps we simply cannot answer these questions without meaningful data. Absent such data, maybe we are doomed to argue and talk past one another, using anecdotal evidence to support our views.

As I think about this further I will post again as appropriate--and of course, I welcome comments on the subject in the meantime.

Weekly Roundup--Feb. 19, 2007

This is my second installment of noteworthy posts or events of the week. Highly unscientific, but hopefully highly interesting.

More (and More) on Taking Law School Exams. There were some substantive posts in the past week on law school exams and how (and how not) to take them. I posted on this subject recently too (see Reflections on Law School Exams and More Information on Exams).

• In a recent post, Orin Kerr of the Volokh Conspiracy discusses in some detail what is (and is not) a good law school exam answer. He usefully illustrates his points with a little hypothetical--materials from a make-believe course, an exam question, and five sample exam answers. Make sure you check out the comments.

• Daniel Solove at Concurring Opinions also offers his take on law school exams.

Note the commonalities in the advice posted by Kerr, Solove, me, and other law profs out there. If a lot of people (grading the exams) tell you the same thing, there's probably something to it . . . .

Blogs in the Classroom. On his blog, Stephen Bainbridge has posted about the use of blogs in teaching. He's using a course-focused blog to great effect--making his slides, handouts, audio of his actual class lectures, and related materials available online for anyone who wants to access them. That is an excellent idea, and Bainbridge can hold his head high if anyone ever accuses him of being an academic because he does not want to work hard. (Which someone does in a comment on another recent post of his, in which Bainbridge compares law practitioner salaries to law prof salaries.) He really could get away with not posting these materials, and yet he does it anyway. Kudos.

So why don't all professors do this? There are probably as many reasons as there are law profs, but I do note that Bainbridge has been teaching for a while, which has given him time to hone his materials.

Most interesting to me is the excerpt Bainbridge quotes from an interview of Professor Jack Balkin (of the blog Balkinization) about blogs opening up possibilities for law students to hear the views of law profs at other schools far more easily than, say, just a few years ago. I see this as very beneficial for students (check out the comments to Bainbridge's post), and also perhaps as raising the bar of accountability for law profs. Both of which are good things.

Big Firm Salaries. At Concurring Opinions, Scott Moss points out in a recent post that despite the media frenzy over recent (and previous) big law firm pay hikes for associates, the average increase over the past decade has been only 6.5% annually. That's better than the national average, but not huge. But the headline "Associates get Modest Pay Raises" won't sell many papers.

As a former soldier in the big firm trenches, I can say that the associates generally earn these raises, too.

Blog of the Week. This honor goes to the HRHero blog That's What She Said, on which blogger and HR attorney Julie Elgar discusses legal issues raised by the US version of the TV show "The Office." Neat concept for a blog.

Weekly Roundup--Feb. 13, 2007

This roundup is a first in a series of posts. The idea, as the name implies, is to give a quick rundown of interesting materials I have come across in the past week or so. Here goes.

Citing to Wikipedia. On Concurring Opinions, blogger Daniel Solove has a noteworthy piece called "When is it Appropriate to Cite to Wikipedia?" (Note to students: PLEASE READ!!) My favorite part is Brian Leiter's comment on the matter.

• Side note: For a link to Wikipedia's Brian Leiter page, click here.

News from the Trenches. The ABA Journal just published the results of an online survey of law firm associates (or at least of people who claimed to be law firm associates). Of nearly 2400 respondents, almost 85% said they would be willing to trade some of their high salaries for lower billable hours. Not surprising. Neither is the general response by partners: get back to work.

They Really Mean it--Get Back to Work. The ABA Journal also reports that salary wars in NYC continue, with first-year associate pay reaching $160,000 in January 2007. So clearly, all associates need to keep their billable hours up to pay for the raise. (Dipping into partner profits to pay for raises is strangely unpopular at big firms.) And as reported in LegalTimes.com, the pay raises are rippling out to other cities as well.

Biting the Hand. . . . New York Law School's Professor Cameron Stracher wrote a recent Op-Ed for WSJ.com, in which he discussed the need for greater clinical education in American law schools. Part of his solution? Clinical rotations like in medical school. Nice idea to consider--although I wonder how useful watching a bunch of corporate attorneys drafting documents would be. Come to think of it, when I have had medical procedures done at teaching hospitals, I have wondered how useful the whole process was to med students in the room. Although since I didn't get charged any extra and since no one got hurt, it was at worst useless, and at best a learning experience.

Watch for more roundups soon.

More Big Firm Salary Increases

This just heard through the grape vine: more salary increases at big U.S. firms are apparently underway. The latest bump is from $135,000 to $145,000. Not a huge bump, but not peanuts, either.

Does this mean that big firm associates will be subject to even greater pressures to perform? Yes. Does it make it more likely that first year associates will be loss leaders? Yes. Do I like the idea of yet more raises? No. Check out some of my previous posts here, here and here.

For those of you considering starting your careers at big firms, the money is great, and depending on the firm and the practice area the work can be exciting (mine was, anyway). But don't for a minute think that this latest raise is free money, and that the firm can't make you work even harder to pay for it. I'm not warning people away from big firms; I just think anyone joining a big firm should go in with their eyes open.

More Big Firms Raise Starting Associate Salaries

Law.com reports that a number of big law firms in Chicago have raised their starting associate salaries to $135,000. This move follows on the heels of increases by big firms in markets on the East and West Coasts, as well as some early movers in the Chicago market like KMZ Rosenmann, which hiked its salaries in January 2006. The Law.com article can be found here.

This increase means that, for better or worse, $135,000 is the new benchmark starting salary for blue chip firms nationwide. Some firms (notably in New York City and maybe on the West Coast) may pay more, as New York-based Skadden Arps is famous for doing. (Skadden is also famous for working its associates even harder than other big firms, by the way.) But $135,000 will be the new dividing line for recent law school grads choosing between elite firms and almost-elites.

Firms that pay less than this new benchmark will be perceived as not being in the upper echelon, which is disastrous when it comes to recruiting new hires. So any big firm that is not paying this rate will almost certainly move to it soon.

Some of my other recent posts on the topic of big firm associate salaries are as follows:

• Big Firm Salaries Going Up (Again) (Feb. 15, 2006)
• Big Firm Economics 101 (Feb. 7, 2006)
• Law Firm Salary Wars (Jan. 27, 2006)
• Of Law Firm Culture and Compensation Schemes (Jan. 17, 2006)

Big Firm Economics 101: Why are Associate Salaries so High?

I have blogged a fair bit lately about starting associate salaries at big U.S. law firms. (See my previous posts here and here.) That’s natural, I suppose. It’s in the news, and new associates at blue chip firms certainly make a very good living. But why are starting salaries at big firms so high?

There are a lot of answers one might give. Some of the more popular ones are wrong in many ways, but yet contain a seed of truth. So here’s my modest attempt to help set the record straight.

Three common answers to the money question are:

1. Big law firms throw money away on junior associates because big firms make money hand over fist.
2. Those poor associates make their firms a big profit, so they deserve big bucks.
3. Lawyers have a monopoly on the right to practice law. This reduces competition and means firms can charge their clients more.

Let’s take each one of these in turn.

ANSWER ONE: Big law firms throw money away on junior associates because law firms make money hand over fist.

What’s true about this? That’s easy: big firms make a lot of money. Just look at some recent figures. The top 100 U.S. law firms grossed US$41.7 billion in 2004, with the top four (including my old firm, Baker & McKenzie) raking in over $1 billion each.

That’s astonishing, really. Years ago—say, back in the ancient 1960s and 1970s—being a lawyer was a great way to make a good living, but a hard way to get rich. Being in business was a much better way to strike gold (think Apple and Microsoft in the 1970s, or high tech companies today). But now? Bill Gates still makes a lot more money than even top law firm partners, but there are more opportunities to be a corner office partner than to be the top-dog entrepreneur. So in terms of risk versus payoff, practice at a big law firm is not a bad bet.

What’s false about this? A lot, actually. Law firms do not pay newbie associates tons of cash because they can—they pay them high wages because they have to. Law firms are private enterprises, and they respond to market forces. Sure, like any entity or person they have their cognitive biases that result in incorrect decisions, but overall their economic decisions (accounting for imperfect information or assumptions) are startlingly rational. They pay market rates to attract top talent—and if the market rate is high (which it is), then that is what they pay.

ANSWER TWO: Those poor associates make their firms a big profit, so they deserve big bucks.

What’s true about this? Well, law firm associates do work hard . Take it from me, a veteran of the big law firm trenches.

What’s false about this? Newbie associates hardly ever make their firms a profit.

Think about it. Starting associates get such big salaries, and yet they have no practice experience. Law school is only a three year course of study, and in today’s sophisticated world filled with specialty areas of practice, students learn only the rudimentary basics in law school. I’ve been on all four sides of the matter—(1) as a law student, (2) as a newbie associate, (4) as a seasoned lawyer managing projects and other lawyers, and (4) now as a law professor—so I know what I’m talking about.

So big firm newbie associates rarely pay their own way. With salaries approaching $150,000 and other expenses (office rent and other overhead, benefits, insurance, etc.), newbies cost firms around $250,000 per year. Sure, they bill at $200 per hour, but is all that time collectible, as they learn the ropes and the law? Absolutely not. A solid mid-level associate might collect around 85-90% of her or his billed time (remember that it’s not just about the quality of the work—some clients just don’t pay in full, or get special discount rates from the firm), but newbie collection rates are much lower. They usually don’t break even until their third year of practice.
So it would be better to pay junior associates a lot less, and then increase associate salaries exponentially in year three. But that’s not how it works—which is unfortunate, both for the law firms who pay too much for newbie associates and for the newbie associates who feel too much pressure to be profitable.

ANSWER 3: Lawyers have a monopoly on the right to practice law. This reduces competition and means firms can charge their clients more.

What’s true about this? Well, the practice of law is a monopoly granted by each state. And lawyers should never forget that the privilege to practice law is just that: a privilege, not a right.

We should also bear in mind that aspirational goals (like the obligation of licensed lawyers to do public service and pro bono work) are generally doomed to failure. When push comes to shove between public service and a screaming (and paying) client, the client almost always wins. I’ve been there. Lawyers are in business, and they are rational actors. Clients pay the bills.

What’s false about this? Removing lawyers' monopoly on law practice would not do as much as you might think to reduce lawyer salaries. It would have some impact, to be sure—after all, you can’t go into court as a lawyer unless you are one. But what about other areas of law? Transactional work? Regulatory work? The effect would be minimal in many cases.

First, the assumption that all lawyers are overpaid is premised on the assumption that everything lawyers do requires a law license. That is not true. You do not need to be a lawyer to draft or sign a contract, facilitate a corporate deal, or to provide regulatory advice in many areas of practice (like import/export law, my old stomping ground). Companies can sign their own contracts and structure their own deals, and in some cases (typically in regulatory areas) non-lawyer consultants can represent clients.

Yet lawyers still dominate transactional and regulatory work, at least at the high end of the market. In my experience, law firms often offer more creative and critical thinking—and thus more value. So they are able to charge higher fees, and make more money. Not because they have an unbreakable monopoly—they have no real monopoly at all. Their profitability is because they offer the best quality service. The easier work goes to consultants (and some law firms) who charge less, and that is a good thing—clients pay less for the easier work. But the hard stuff? Big firms do it for a premium—which again is a good thing, since clients get value for their dollar. And that’s no different from any other sector of the economy.

* * *

This is a topic where passions run high. Some people like lawyers, and some do not. Those who like lawyers often defend them come what may, while those who do not typically take the opposite stance. And usually the answer lies somewhere in between. This is my attempt to set out a few of my thoughts on the matter. There's more to be said; I'd like to hear what you think.

Law Firm Salary Wars

Associate salaries at big law firms may be on the rise again, according to reports at Law.com. An article on that website reports that some big West Coast law firms are raising junior associate salaries by around $10,000. This means new law school grads who land these jobs will be making about $135,000 per year. Those poor junior lawyers! Firms that have hiked their associate salaries lately include Wilson Sonsini, O'Melveny & Myers, and Paul, Hastings, Janofksy & Walker. This round of increases was started by Gibson, Dunn & Crutcher. Since these firms have offices throughout the country, you can expect to see increases in other big markets as well.

Whenever big firm salaries go up, two things generally happen. First, associates in the trenches say, "Hooray! Now I make even bigger bucks!" And second, people who do not like big firms say something like, "Those @#%&*# don't deserve that much money. They are leeches on the back of society."

As it turns out, both reactions are wrong.

Why are the gleeful (greedy?) associates wrong? Because any salary increase is not free money. You are going to have to earn it. And for already big salaries, any increase will truly have to be paid for with blood and sweat. The firm is likely to increase your billing rate to offset your added cost--but with a higher billing rate you will have to be an even quicker learner and faster worker, since clients don't just blindly pay higher fees for the same work product. You also likely will have to bill more hours, and work more hours to do so. And when you divide your grand associate salary by the hours worked per year, the pay ain't so grand. (See my previous post about this.) So remember, the reason to work the big firm job is because you love it--or at least because the benefits exceed the costs. Not just because you are making 6 figures.

Why are the firm haters wrong? Because the map is not the terrain. Official salaries only tell part of the story. Firms are reluctant to lower official salaries, of course, because that looks bad. (In economic terms, law firm wages are elastic upward but inelastic downward.) But that does not mean that firms pay all associates at the official rate. In the past 5 years, in fact, a lot of big firms have added "part-time" partnership tracks. Part-time is actually a euphemism for a full time job averaging 40-50 hours per week, instead of 60-80 hours that most big firm associates put in. Associates on the slow track have lower annual billing targets, and in return they get paid less and take longer to make partner (say, 10 years versus 8 years).

In other words, "official" associate salaries only tell part of the story, and salaries on the big law firm market are undergoing a market self-correction. As well they should.

What is particularly interesting about the "part-time" track is that it was created largely at the urging of associates themselves. Many associates like their jobs, but do not like their hours. And they are willing to take less money (although still a good salary)--and in some cases they even forego a shot at partnership--in return for fewer billable hours. To turn again to economics, it's an application of the Laffer Curve--that at some point a person is not willing to work more for higher pay. At some point, the value of free time/quality of life exceeds the additional salary offered, and people say no.

I seriously doubt that we are going to see 50% raises given to law firm associates like we did during the dot com boom. But we are going to see incremental raises like those being implemented right now. The fact that they are incremental, however, does not mean they have little impact. Big firms will match each other dollar for dollar on paper, and as a result more and more people will try to work out other, more flexible deals so that they can have a life on the side.

Are Lawyers Underpaid?

It's the spring recruiting season at law schools, and that means it's time for students to start comparison shopping among law firms. There are many factors that should be considered when comparing law firms, and I have discussed some of these in a previous post. But of all the factors that students look at, the most popular one is what?

Money, of course.

Beware of the bottom line, however. It can be horribly deceiving. Instead, try to figure out how much you will be making per hour. That's a rough but useful indicator of whether the job is worth it to you.

So let's do some math. First, it's common at many firms to be expected to bill 40 hours per week. And even in nonbilling legal jobs (such as working for the government in many capacities), the workload is similar (or sometimes higher), so we'll use 40 hours billed as a good proxy for a "productive week."

So far, so good. But again, beware: in order to bill 40 hours a week (i.e., get 40 hours of client work done), you have to work about 60! Think about it: client promotion (bringing in new clients), giving speeches, bar work, CLE, pro bono work--all of these things are important, but none of them gets the client work done. So you have to add them on top of the client work. (As an aside, any firm that does not give significant credit to lawyers who do pro bono work should be ashamed.)

What that means, gentle reader, is that to bill 8 hours a day you need to put in a lot of 12 hour work days, and some that are even longer. That is, unless you are unnaturally efficient--don't use the bathroom or stop to eat all day--or are not billing ethically.

And that means that in order to bill 2000 hours a year (40 hours x 50 weeks per year) you need to work 3000 hours, at least. That's a lot of hours.

So what do you get for all that work? The payoff isn't bad, but when put in hourly terms it's not the endless source of wealth you might think.

• Big firm associates in big cities (NYC, DC, and so on): If you make $125,000 per year, that's $41.67 per hour.
• Big firm associates in midsized cities: $90,000 means $30 per hour.
• Smaller firms: $65,000 equals $21.67 per hour.
• Smaller firms and other legal jobs in government: These often pay a lot less, but are no less demanding in terms of the hours or skills required. A salary of $45,000 means $15 per hour.

And here's the best part: my plumber bills at $80 per hour. Both lawyers and plumbers put up with a lot of crap, but the plumber gets paid more on an hourly basis, and even gets to charge time and a half for work on the weekends.

Am I suggesting that everyone should quit law school and be a plumber? Of course not. But I am suggesting that before you sell your soul for the big firm job, you'd better make sure it's what you want to do.

Practicing law in a firm or with the government is a wonderful way to carve a career path, but it has its shortcomings. And based on the number of hours you'll be working, you'd better make sure that the benefits exceed the costs before you take the plunge(r).

Of Law Firm Culture and Compensation Schemes

There's always talk about law firm salaries for associates. Are they too high? Too low? What's the price associates pay for an increase in salary? (Partial answer: Working harder and less mentoring.) There are suggestions out there that modest salary increases are taking place in some parts of the country right now, while other reports suggest continued wage stability (as opposed to the end of the 1990s, when one year saw 50% raises at big firms).

It's useful to approach this topic from a different angle, however. Specifically, how are associate compensation schemes and law firm culture related? Average salaries are only the tip of the informational iceberg, and compensation schemes vary widely. Credit goes to Professor Eric Goldman of Marquette University Law School for inspiring this post. He has done some very good thinking and blogging on the topic. Check out his July 26, 2005 post in his Goldman's Observations Blog. Goldman tells his students that "if you want to understand a firm's culture, start by understanding the firm's compensation procedures."

Now that's superb advice for any student or lawyer.

Goldman discusses and links to articles in NY Lawyer on the subject. These articles focus on objective factors such as the disparity between a firm's highest and lowest lawyer wages, as well as profits-per-partner. Objective measures are all well and good, but what about the average Jane or Joe in the trenches? Aren't there some rules of thumb or subjective factors than can be used to compare firm cultures without resorting to formulae? Indeed there are. Here's my partial list.

One big factor is, "Are associate annual raises lock-step or merit-based?" Lock-step compensation is good in the sense that it discourages (somewhat, at least) nasty competitiveness between associates. Everyone makes the same amount (although bonuses may vary). But it doesn't reward superlative efforts very well. Did you bring in 3 new fortune 500 clients yourself and oversee several difficult projects that were above your level of seniority? If so, why shouldn't you get a big fat raise for it? Or is it that superlative performance is expected, and those who are merely very good should be concerned for their job future?

At the end of the day, you have to make your own judgment call: lock step's (possible) greater egalitarianism versus the greater glory and pay (and favoritism and ill will) that merit raises may bring.

Another factor is simply the number of partners versus the number of associates, regardless of compensation schemes. Is the firm a pyramid, with a few at the top? Or is the ratio closer to 1:1? A pyramid structure suggests that it is harder to make partner. (One caveat: specialty firms and practice groups tend to have a more 1:1 ratio, since fewer people practice in the area. There are a zillion litigators out there, but not so many lawyers practicing in, say, the area of export control law.)

A third factor is whether the firm has a one-tier or two-tier partnership structure. For those who don't know, a lot of firms--especially in the big markets--have equity partners (AKA "real partners" who have an ownership stake in the firm) and non-equity partners (AKA "fake partners" who are partners in name only). Sneaky, but true. And just like a lawyer.

Non-equity partners are typically not at will employees--they have contracts for a specific term--but definitionally speaking are not really partners. They are employees. A two-tier partnership structure suggests pretty strongly that it is harder to make full partner at the firm. And certainly it takes longer, since you have two hoops to jump through.

A fourth factor is how associates and non-equity "partners" are treated in terms of promotions. Does the firm have an "up or out" culture? Are the firm's non-equity partners second-class citizens? This is a very important factor to consider. It is a lot harder to make full partner at many firms than it was even 1 or 2 years ago (yes, I am being serious), and many excellent attorneys have opted not to go for it. At many firms non-equity partners are in essence highly valued, long-term contract attorneys. But at others they are not. How a two-tier firm treats its non-equity "partners" says a lot about how nasty or nice the firm's culture is.

Yet another factor is the dollar amount of its annual raises. In economic terms, what is the slope of the salary curve? Most firms pay market rates for starting attorneys straight out of law school. But some have really flat salary curves--meaning that after a few years, you are making far less than your peers at other firms. Ask that question when interviewing--and ask about bonuses too.

A sixth--and absolutely key--factor is HOW (as opposed to how much) partners are paid. Is compensation based on how many shares of the firm the partner owns? Is annual compensation largely subjective and based on the will of a compensation committee? It is pay-per-project? Or is it an "eat what you kill" scheme--meaning the more you bill (and the more others bill your clients), the more you get paid?

The choice has an enormous effect on firm culture, and I have experienced both personally in practice. Compensation set by committee means that there are insiders and outsiders--and try as you might, someone gets shafted. And the process becomes enormously political. The "Eat What you Kill" approach lowers the infighting factor, but it leads some partners to hoard work if they can get paid more for doing work themselves instead of handing it off. That, of course, is bad for the associates. These categories are oversimplifications, of course. But still, ask the question. The answer will cast a huge spotlight on the firm's culture.

Finally, when you interview at a firm, how do you feel about the place? Do you get a good feeling, or a bad one? Trust your instincts. Always, always, always. (Read Malcolm Gladwell's book Blink if you haven't already; this is exactly what he is talking about.) Run from the "great" firm that makes you feel creepy; go with the firm that you like, even if it does not have all the objectively measurable qualities you want. It is a leap of faith, I know. But every time I followed my instincts in such matters (not rashly, mind you) I made the right decision, and every time I ignored them I made the wrong decision even though it looked great on paper.

There are a lot of other factors that could be listed, but space and time are short. This is supposed to be a blog post, not a book unto itself. Any comments on these or other factors are welcome.