Posted Jan 05, 2010 11:55 pm CST
Amongst those at the top of the BigLaw ladder, partners at the 10 highest-grossing law firms in Washington, D.C., have been earning seven-figure annual incomes and some of the top players are billing over $1,000 an hour.
Are they worth it? The answer may be yes, according to a lengthy Washingtonian cover story co-authored by Above the Law’s David Lat. But it questions whether BigLaw’s high-paid associates, whose top starting salaries have hit the $160,000 mark, deliver the same value.
Partners with decades of experience may be able to answer a legal question in 20 minutes, making them potentially less expensive than associates who need to spend hours on research to get up to speed on the subject. Plus, where bet-the-farm litigation and major corporate matters are concerned, a seasoned partner’s expertise and advice may be critical to winning a case or closing a deal with a price tag in the tens or hundreds of millions.
Corporate counsel say they see the point of paying top dollar for law firm partners, but openly wonder whether first-year associates at major law firms, in particular, are worth what they cost.
At least arguably, law firms have had to pay a “market” rate to attract the best and the brightest young lawyers, to prevent competing partnerships from snapping them up. But that may be changing after a year of unprecedented associate layoffs and pay cuts at a number of well-known firms.
“Right now there is a glut of talent in the market at almost all levels, for associates in particular,” consultant Peter Zeughauser tells the Washingtonian. “So salaries are coming down. It’s all market-driven.”
Reportedly, some recent law school graduates have been having difficulty finding legal work at any price, even as volunteers.
Another issue, both for corporate clients seeking the most bang for their buck and for attorneys on the low rungs of the ladder, is the discrepancy that can exist between what lawyers earn for their work and how much companies are charged for it.
An unidentified lawyer who has worked as a contract attorney on projects for a number of law firms in Washington, D.C., tells the magazine of spotting a noteworthy page in a document review: It listed the hourly billing rates, including his own, for all the lawyers on a project. As he knew, he was paid $35 an hour for his work on the matter. But the document listed his chargeable rate to the client as $250.
In recent years, corporate clients increasingly have addressed this issue by outsourcing a growing amount of relatively routine legal process work to independent contractors, often overseas.
Meanwhile, some say high pay can also be detrimental even to the lawyers bringing in the big bucks, if they want a life outside the office. Among these critics is attorney Jane Sullivan Roberts, a managing director at the Major Lindsey & Africa legal recruiting firm and the wife of Chief Justice John Roberts. She is a former partner at what is now Pillsbury Winthrop Shaw Pittman.
Happy to earn a starting salary of roughly $50,000 when she worked at Dorsey & Whitney in Minneapolis in the 1980s, she and some other lawyers there resisted pay increases because they expected to have to work harder. And, when they lost that argument, they found they were right, the Washingtonian article recounts.
“Until the 1990s, lawyers wanted a comfortable, secure life and interesting professional work,” Roberts says. “Then, in the 1990s, when their dot-com clients were getting rich, many lawyers also wanted to get rich.”
Now, like it or not, much of the legal profession could be returning to a pay scale reminiscent of that former era.
Hat tip: Above the Law.
ABAJournal.com: “The Chasm in BigLaw Management: Restore or Cut Salaries?”
ABAJournal.com: “Was It Worth It? With Debt of Up to $250K, Some Law Grads Are Dubious”