What If Clients No Longer Want to Pay for Junior Associates?

What If Clients No Longer Want to Pay for Junior Associates?

 

The WSJ Law Blog (which has a new editor, by the way) featured an article yesterday on clients' increasing unease with paying for the work of first- and second-year associates.

I've seen this change building for some years now, in my work with both clients and firms. It's a trend that antedates the current recession, but it's starting to really take hold. It's not universal by any means, but the curve is starting to look like the traditional "hockey stick" pattern for rapid adoption of a trend.

Once a trend moves past the tipping point, to use Malcolm Gladwell's term, it becomes hard to keep it from "taking over." Think of the adoption of cell phones. First Gordon Gecko had one. Then a few early adopters had them, those old brick-sized devices from Motorola. Then in the mid-1990s more and more people got the early digital, fist-sized models. Suddenly, everyone had one. (Then Steve Jobs created a really cool one, but Apple was camping onto rather than setting a trend.)

I saw it happen with televisions when I was growing up. We saw it happen with PCs a few decades ago. Our kids are all texting, when three years ago most of us didn't know what it was.

It's not just technology, either, although technology examples are among the easiest to spot and measure. Ideas flood the marketplace the same way. (Now people are calling these ideas "memes," a term that hasn't quite hit the tipping point itself.)

One of those ideas is that clients want to pay first- and second-years only what they're worth to the client.

That's right. They don't care what these folks cost the law firm; they care only about the value received.1

So what can the firms do? Obviously, they can simply fight the trend, but is that the only option?

I don't think so. Tomorrow, I'll offer some suggestions around this issue for both firm and client.

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1They care mostly about the value received. Corporate clients do recognize that there's a more complex issue underlying this discussion, the overall value of what they receive. I've heard corporate clients suggest that they overpay associates and underpay folks at the top on an hourly basis and that it all comes out in the wash, assuming the associates aren't just running up the hours. However, that's a nuanced (and interesting) discussion that may well get drowned out in a more direct conversation about associate pay.