Using the Recession to a Law Firm's Advantage

BrianTaaffe — Wed, 29 Jul 2009 16:09:00 GMT

With the economy in its current state, and the legal industry perhaps not as recession proof as previously thought, law firms are looking into ways to cut costs in order to improve profits. Previously I suggested ways to improve margins through cost cutting and other options, but another point that has been getting a lot of press is first years' salaries. Where they currently stand, first years' salaries are probably higher than they should be. Law firms are not getting value out of their new recruits at current salary levels. Their costs are high, and the revenue they bring in is low - largely due to inexperience. First year associates do not have the knowledge or expertise to produce the same quality of work as a senior attorney. To top it off, first year associate rates are often much higher than a client is willing to pay. From what I have seen in working with law firms, in many cases a first year associate's work is being discounted heavily at the time of billing, or is being written off. Clients do not want to pay for second rate work - they come to big law firms to get the best talent and legal services; first years do not have the ability to produce the work that the clients would expect from the rates they are being charged.

So why do firms pay first years such high starting salaries...

...(read more)

Make More Rain : compensation, recession

Using the Recession to a Law Firm's Advantage