|Image [cc] Shane Trueblood|
Jordan Furlong and I need to take our show on the road. In our usual “Dan & Jane” fashion, we inadvertently tackled another topic. My original post threw down the gauntlet and Jordan, in his always well-stated fashion, answered the call. Below is his response – with a promise of more to come.
Update 11-4-13: Jordan provides a more complete response on his blog here.
Toby, you ignorant — oh, wait, we already did that.
As usual, we agree on a couple of points. One is that law firm associates should not universally and presumptively be considered future partners. But we should also be clear about one thing: that very presumption has long been part and parcel of the underlying (and mostly unstated) promise law firms make when they offer lawyers the position of associate.
Fundamentally, “associate” status represents full-time law firm employment in a salaried capacity. But there’s always been something more: it’s also a Golden Ticket for possible admission to law firm partnership. The beauty of this system, from the law firm’s perspective, has long been that “associate” status carries the potential of ascendance to a higher level, with no guarantee that such ascendance will ever happen. It deliberately confuses possibility with likelihood. Will every associate be a partner someday? Of course not. But could any associate be a partner someday? Yes. That’s the promise, the lure, the ticket — that’s what gives the title “associate” an extra shine.
That’s one of the reasons Greenberg’s shift is noteworthy: by taking away the word “associate” from most non-partner lawyers (if that is in fact the outcome), the firm is essentially tearing up the Golden Ticket. It is making clear: you will never be a partner at this firm. Insofar as that makes explicit the implicit truth that we all know — that many are called to partnership, but few are chosen — that’s actually a good thing.
Our second point of agreement is that law firms should indeed be hiring talented lawyers to be valued, potentially long-term, non-owning employees. Where we might disagree is over what we mean by “hiring.”
A major problem in law firms, as you suggest, is that firms are hiring and paying these lawyers to work stupidly. Well over 90% of the value firms compensate in their partners lies in developing business and billing hours. For lawyers who aren’t partners and don’t aspire to be, that eliminates the first category and leaves 100% of their value in producing billable hours.
As I said in my post: if all you want out of a lawyer is the permanent ongoing production of work that can be billed to a client, that’s fine. But why would you hire someone as a full-time employee to do that? From the point of view of client value, which is what we’re discussing now, that work can be sourced from a temp lawyer, an LPO, an expert system, or elsewhere — and none of these sources are nearly as expensive to the client (or as traditionally profitable to the law firm) as a full-time associate.
So that’s our common ground, and as usual, it’s pretty sizeable. 🙂 Because this comment is so long, though, I need to make the rest of it a separate entry.
I think our fundamental disagreement may be whether there’s really much purpose anymore in having associate lawyers in a law firm who aren’t destined for ownership. I don’t think there is, whereas I think you may.
“Many associates ‘just want to practice law’ and not be under pressure to become an owner,” is how you describe it — and I’m sure that’s true. I’m happy for any associates if that’s what they want. I’d like a pony, too, but nobody’s going to give me one anytime soon. If someone is a lawyer in a law firm and doesn’t want to be a partner (and the firm agrees), then that person is simply an employee — indistinguishable from secretaries, law clerks and IT people. But being an employee in the 21st century is a position with little stability and almost no leverage. Employees can expect to be paid relatively poorly and to be considered largely fungible. And that’s exactly where many “law firm associates” who don’t want to be partners are headed, in a hurry.
If it were up to me, the title of “associate” would be reserved for a lawyer in a law firm who is universally expected to become an owner at a specified point in the future. I like the word “associate” — it has history, power, and gravitas. Law firms have cheapened it, however, over the past few decades by giving the title to people with no desire or expectation of partnership. An “associate” ought to mean “future firm leader.” If a lawyer does not want that designation and the responsibilities it carries, he or she should not expect the rewards and security that come with it.
Law firms still need lawyers (and others) to produce work that delivers client value and can be billed accordingly. I don’t see this ever changing. What will change is where these lawyers (and others) are located, how they work, what they’re paid, what benefits they receive, how much job security they have, and so forth — these will all be different, and often less attractive, for most of these lawyers than in the past. Full-time salaried positions in law firms will be scarce and will be reserved for lawyers who are or will soon become core members of the firm.
In that regard, I actually think Greenberg’s approach is sound — if that’s where they’re headed. The problem, and it’s a major one, is that it provides law firms with an excuse to stop providing “training” to all their new lawyers. One of the major benefits of the traditional system was that every law firm associate, even the ones who clearly were short-term entities, received in-firm experience, exposure and training for as long as they were there. That training may not have been all that great, in most cases, but it was assuredly better than nothing. And “nothing” is what thousands of new lawyers are potentially poised to get under a system like the one described above.
If and as we move towards a system of fewer law firm associates, a massive training/experience shortfall is going to manifest itself for the legal profession, and this will cause problems for all these law firms sooner or later. That’s the topic I hope to tackle next at Law21.