Right Plan - Wrong Profession?

Posted on September 14, 2009 by Larry Salibra

The description of the profession used in Northwestern’s Strategic Plan is based on data which describes a profession that very likely has undergone some radical permanent changes since the data describing the legal profession was collected. The Plan presumes a profession that existed through 2006 and is designed to address the requirements of that profession. For example in the opening pages of the Plan it notes that starting salaries for top law school graduates were “now $160,000 plus bonuses” for the top graduates of Northwestern Law School. In my blog I describe how many formerly highly paid law school graduates are now unemployed or employed for modest salaries.

The Plan also describes the growth in the demand for legal services, based on law firm revenues from 2000 to 2006 which show legal services overall slightly outpacing GDP and the revenue of the Top 200 US law firms dramatically exceeding GDP with an annualized growth rate of 9.8%.

2007 has brought dramatic changes to the global as well as the US economy. Similar impacts have been felt by the legal profession. The reduction in the demand for legal services as well as the incomes of lawyers has been widely publicized. Perhaps even more importantly, the role that the law might have played in the US and other cultures may well be changing. Most notably, the central feature of at least the US legal system, lawsuits, appears to be disappearing. As I suggest in this series of blogs, this change may not be a mere function of the economic climate, but a cultural shift in which the role played by law is being replaced by other factors in the culture to order and control behavior.

Northwestern’s plan explicitly describes itself as not being a new effort, but describes itself as “refreshing portions of its 1998 Strategic Plan and “fine tun[ing]” the school’s response to the continuing challenges for legal education. Its biggest problem may be that it does just that and in doing so may have fallen into the trap that has plagued legal education—its uncanny ability to train lawyers for the profession of the past.

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Are There New Salary Guidelines for In-house Attorneys?

Posted on June 5, 2009 by Larry Salibra

I know you are waiting for my insight into the local rule making process, but I just have to respond to the news about the Mayer Brown Associates sent in-house at a fraction of their former salaries and without any guarantee that they will remain employed. The question is what does that mean for in-house salaries.

These were lawyers who were making $200,000 and are now making $60,000 working for United Air Lines and Fortune Brands just to name a few. Apparently, the deal was worked out as an alternative to unemployment; Mayer Brown has apparently let over 70 lawyers go since last November. When I first took on this role of blogger for ACC one of the topics that it was suggested that I write about was the high salaries of associates’ at large firms. What a change has taken place in a year. Now the topic is how the new low salaries for associates at law firms might be harbingers of things to come in-house.

In house lawyers who expressed concern about outside firm salaries probably never imagined that the solution might have a direct impact on their own salaries, but the implication is hard to miss. Competition is good and I never really believed that the associates deserved the salaries they were making because they could not deliver the value that justified it. The same principle applies to in-house attorneys—time in grade alone does not justify salary increases (remember those things in your remote past).

Today I had a conversation with a long time friend in large firm and he expressed the view that when the economy turns (we both agreed it would be a lot later than are optimistic political leaders) it was not likely that the practice as they new it would return. People would not be willing to pay as they did in the past and delivery of legal services had to be fundamentally rethought.

Those in legal marketing are likely going to have to reinvent themselves as the old shibboleths that defined the kernels their sales pitch may become irrelevant. Who knows, you may even see prices on law firm web sites.

What does it mean for in-house—at the very least it means a lot more people vying for a lot fewer jobs and a level of competition which may well change the culture of the practice.
 

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