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Deborah Marshall ’82, Partner, Sidley Austin
What changes has your firm made in response to the current economic downturn?
We are indeed living in interesting times. The law firm new associates start date deferrals have been a wake-up call for the profession and students — reminding us that indeed there are no guarantees in life. Firm partners have been wringing their hands over what to do about outstanding offers to lawyers they have no prospect of keeping busy; delays in dealing with economic realities is just one of the factors causing financial instability in law firms.
There are multiple forces causing law firms to re-examine their business models. I see several areas of potential change:
The legitimate demand by clients for control and predictability in legal expenses will likely survive the current economic downturn. This will require lawyers to take into account the value of the project to the client, as opposed to the number of hours to complete the project, and price accordingly. It will also require lawyers to take some risk, which of course they don’t like to do. It is not necessarily the case that an associate who graduated in 2006 is more efficient or knowledgeable with respect to a particular matter than an associate who graduated in 2008, and the client does not want to pay for the luck of the draw on staffing. Clients are telling law firms to share the risk and price their services accordingly. In response, we are seeing law firms re-examine their own “lock step” cost structures: billing rates that vary by project and greater discretion in setting salaries — for example rates and salaries that are in “bands” and are performance based, rather than simply increasing each year after graduation. I think these are healthy changes.
Recruiting and training are costs of doing business that ultimately are passed on to clients. I would argue that the current recruiting model doesn’t really serve the interests of the firm, the lawyer or the client. The long lead times for hiring that have been a cornerstone of law firm recruiting are more akin to college applications than employment. Like college students, law school graduates have been led to believe that they should use their first few years of practice as an opportunity to continue to search for their true interests. Firms feel that they need to offer this smorgasbord to attract top students and compensate for the fact that the existing system encourages them to choose a job ostensibly for life long before they even know what they want to do as lawyers. In my view, this is an unsustainable model and clients are not being well served by what is essentially a post-doc program for law students, albeit a highly paid one.
The assumption that one will spend an entire career in one job is outmoded. The reality is that folks graduating from law school today expect to make several moves over the course of their careers and those changes can be the vehicle for attaining the variety many lawyers seek. Historically, many lawyers were generalists. Today, clients are paying for expertise, and increasingly this means industry expertise in addition to legal expertise. Law firms need to hire people they can put to work on projects that deliver value to the clients. The emphasis should be on developing expertise, not experimentation, because the clients are paying for expertise, and it is expertise that makes for a long and happy career. Moreover, the idea of trying lots of things is often very different from the reality and the lack of focus may be contributing to junior associate dissatisfaction in large firms.
Students should have more time to explore their interests during law school, and emerge ready to say goodbye to school and get started in their careers. This is where the NUSL experiential program is providing an essential service to the profession and to clients.
The NUSL Women In the Law “Ask-the-Expert” monthly series will be ongoing in 2009-2010. If you have a question for future experts, please email M.Marquis@neu.edu. Keep in mind that we have three workshops, two additional brown bag luncheons and the second annual Women in the Law Conference (4/2/10), which will be held this year. Visit the Women in the Law for more details about these programs.