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Monday, March 19, 2007

Law - More on "What to make of those astronomical Supreme Court signing bonuses?"

All of you whose jaws dropped when you read about the "astronomical Supreme Court signing bonuses" last week will also be interested in these two items.

First, a great, up-to-date table of not only 2007 New York City Elite Law Firm Salaries, but also those of other markets, including Chicago.

Second, this article, "Where Will In-House Counsel Draw the Line on Associate Costs?" - available via Law.com. Some quotes:

Who's paying for this? Do you think that when the decision is made to up first-year salaries that the partnership votes to take less money to pay for it? Or do you think that the associates will be expected to "earn their keep"? (The latter is a nicer way of saying that clients will be billed for the overworked first-year associates' time and efforts.) * * *

Companies can hire an incredibly smart and experienced associate or partner in the next town over from New York or Washington, D.C., or Los Angeles or Chicago who bills $250 an hour, and who can do the same work in half the time of that $200 associate or his $800 partner. And the Internet makes lawyers from around the world as accessible as those next door. Don't forget about the non-law firm consultants, who can do most of the work of associates in any number of disciplines -- document review or discovery work, contracts, research and analysis, investigations -- at a fraction of the cost. Why do we continue to give big firms this kind of work at their inflated rates when it's clear that their pricing is in no way related to the value the associates provide? These rate hikes are about attracting top grads, not about increased or better client service.

So where will in-house counsel draw the line on new associate costs? Why don't corporate clients simply say: We're not paying for this anymore? In-house legal executives need to stand up and exercise their considerable influence. Demand to know -- in detail -- why prestigious firms believe their inexperienced associates provide more value than a successful partner in a less expensive firm or an expert legal service vendor/consultant. Tell them that you're happy to pay high rates for high quality and experience, but you'll be the judge of the value provided. And if they answer that they had no choice but to follow the market in order to attract the same 50 graduates from the same 25 top-ten schools, then label them the sheep that they are, and vote with your feet.

Great legal service is expensive, but someone needs to remind the managing partners of the prestigious firms that it should never cost more than it's worth. Associates who receive these pay hikes (but from whose hides these costs will be recouped) and your clients all deserve better.

The article is authored by Susan Hackett, the general counsel of the Association of Corporate Counsel.

Posted by Marcia Oddi on March 19, 2007 07:48 AM
Posted to General Law Related