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Tuesday, May 24, 2011

Two-Tiered Law Firm Tracks and Hiring

Today's New York Times has an interesting article about what it deems a new phenomenon of big law firms creating a "permanent associate" track.  These associates work in small-city back offices (the article profiles the Orrick office in Wheeling, W.V. and WilmerHale's office in Dayton), and make a lot less money -- $50,000-$65,000, according to the article.  But the associates profiled seem to like it: they say they're doing challenging work, but with fewer working hours expectations.

There's a lot interesting here, from the "in-country outsourcing" angle to the question about whether those offices will become a pink ghetto.  But for now I'm curious about whether this development might have differential impacts on law schools and their grads.  For example, Wilmer's executive director is quoted as saying, in reference to Dayton, that "there's a big, low-cost attorney market there."  That comment at least implies that the firm has its eyes on using local legal talent, rather than staffing the office with the attorneys it would normally hire.  (Of course that could also be complete window-dressing to obscure the cost-cutting nature of the entire project.)

I suppose that, all other things being equal, the firm would prefer to continue hiring the cream of every year's crop, and simply giving each new hire the option of what I'll call "the Dayton track."  But maybe not.  It might be in the firm's interest to segregate the two associate classes so they don't have the same informal network in which they can compare notes and keep tabs on all the ways in which the Dayton-track associates are and are not being treated equally -- and, indeed, so the front-office lawyers aren't as aware of how many fewer hours the Dayton lawyers are being expected to bill.  Hiring local talent for the Dayton-track lawyers might also create more stability -- a Georgetown grad from Long Island is presumably more likely to keep her eyes open for chances to move to a front office operation closer to where she might have originally expected to live, while a local grad might well be delighted at the opportunity to work for a name-brand firm right at home. 

There's also the question of how many "cream of the crop" grads would accept a Dayton-track job.  In this market, of course, a lot of them might.   But they (and career counselors at schools that send a lot of grads to Biglaw) will have to do some thinking about what a back-office job might look like on a resume.  It's at least plausible that a top-tier grad facing a Dayton-track job or no law firm job at all might opt for the latter, on the theory that the former will reflect some kind of failure, or, at best, an ambivalence about putting in the hours required to succeed in a front office operation. On this point it bears noting that the two associates profiled in the article graduated from Northwestern and UVA, so maybe there will always be enough top-tier grads willing to staff these offices.

All of this is speculation; who knows how this phenomenon will play out.  But if I were a dean at a lower-ranked school in a small city I'd be scheduling business calls on Biglaw managing partners, touting my town's low cost of living (making back-office salaries acceptable) and easy access to major cities, and how anxious my grads would be to work in that firm's back office.

Posted by Bill Araiza on May 24, 2011 at 10:41 AM in Life of Law Schools | Permalink


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The article is a little misleading. In my experience at one of the firms mentioned in the article, the non-partner track attorneys are not doing anywhere near the same work as the partner track associates. In fact, that's their utility.

Most big firms have a ton of very tedious work that needs to get done (think document review and privilege logs). By outsourcing that work, firms achieve two things: First, they get a leg up in recruiting by telling the top tier candidates that they won't have to do doc review for the first two years of their career. Second, they keep the revenue generated by that work entirely within the firm. Previoulsy, a lot of this work was farmed out to contract attorneys who were nominally employees of temp agencies, and the agencies took a large cut of the billable hours the firms charged for the contract attorneys.

Posted by: CU Grad | May 25, 2011 9:55:59 AM

I am sure there are all kinds of potential problems with this system and it might fail, but I welcome the experiment. The ability of young lawyers to trade salary/prestige/career advancement for lifestyle benefits at large law firms is long overdue. Firms' previous efforts in this regard were dismal and rarely worked.

The fact that this might also represent opportunities for grads in smaller markets and from less prestigious national schools is another benefit.

We will have to wait to see how it pans out, and we can easily trot out a parade of horribles; but let's give the market an opportunity to experiment in the face of the immediate crisis in the legal service industry and the long-term restructuring that is due.

Posted by: Hillel Y. Levin | May 24, 2011 12:27:02 PM

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