JD Journal » alternative fee structures

Clients Could Refuse To Pay For Summer Associate Hours

eric — Mon, 07 Jun 2010 23:11:58 +0000

The New York Law Journal: A major bank has announced it will not pay for summer associate time. Is this an omen of things to come and the end of a law firm institution? Will unbarred pre-graduates across the country find themselves cocktail, tee time and ridiculously, unimportant-assignment free this summer?

The malaised economy has pierced, once again, the veil that has been cast on the attorney-client fee structure in the last several decades and the results are guaranteed to not be pretty for potential law school students looking for that cushy summer job. In fact, according to the piece, summer associates should expect an increase in more substantive, time consuming assignments. Better for your golf handicap? Nah. But it will sure get you prepared for the real world of big firms in the 21st century.

2010 Steel Cage Match: Corporate Clients vs BigLaw

joshua — Thu, 03 Dec 2009 23:22:34 +0000

I have a mental image of two giants staring each other down inside a locked steel cage before charging at one another, swinging leather briefcases and throwing blackberrys. In this corner, wearing a charcoal suit and a red power tie we have BigLaw, who wants to raise billing rates by 5%, and in this corner wearing a black pinstripe suit with a pastel blue tie we have Corporate Clients, who want to pay 2008 rates or less. The cage is sealed, and only one will emerge victorious.

In a year in which both law firms and their corporate clients have had to make deep cuts and face economic uncertainty, neither side seems ready to blink. Several law firms have enacted salary cuts for first year associates along with lowering the billing rate for their time, and alternative fee structures are on the rise. But profits are down and the easy cost cutting measures have already been enacted, which means law firms want to raise rates to compensate. Corporations are turning to their own legal department for more of their work and are also suffering from lowered profits and greater public scrutiny. In a grudge match with enormous stakes, who will back down first?

Haynes & Boone Cut First Year Salaries

joshua — Mon, 23 Nov 2009 19:40:58 +0000

First year associates at Haynes & Boone will be starting after Thanksgiving, but at a reduced rate. The firm emailed its incoming associates and informed them that the salary for first years has been cut to $145k. The firm says that it has not decided on a pay structure for 2010 yet so this may be a temporary cut, but that seems unlikely in today’s market. The rush to $160k was fueled by competition for the best students coming out of law school and was coupled with other perks and benefits, lavish events and other promotions designed to win the hearts and minds of the next generation of lawyers. With law school enrollment on the rise and the number of biglaw jobs on the decline, the tables have turned a bit and firms don’t need to persuade recent graduates to come work for them. A job offer is enough.

Clients are also pushing for lower hourly rates, particularly from first year lawyers who are essentially getting on the job training at the clients expense. In today’s economy, firms are increasingly catering to the wishes of their clients in order to get the business and so more and more firms are offering cut rates for first year hours, or moving to alternative fee structures. None of this adds up to returning salaries to 160k next year for Haynes & Boone first year associates.

That doesn’t mean it won’t happen, and if it does happen I will happily eat my words.