So everyone knows that associates spend more time in front of their computers than they do interacting with humans. That can’t be keeping clients happy. It used to be that keeping a client happy was the tried-and-true track to making partner. But in today’s era of practicing law, the partnership model–in all its permutations–is continuing to change.
“….[F]ewer home-grown associates are achieving equity partnership,” we read in a recent ABA’s Law Practice magazine piece by Janet Ellen Raasch.
What’s fundamentally at play here is that firms still consider the PPP important. The profits per equity partner ratio are used to “attract and retain” the crème of the crop. And when this formula looks good, it impresses existing and would-be clientele. And if the slices of the pie are too thin? Sometimes weak performers are shown the door. Or–and you’ll read why, further down–a few stronger performers might skip out that door on their own.
The former instance might particularly be the case in smaller firms where–because there are less lawyers– an associate who’s not up to snuff is likely to be perceived as putting the profitability of its firm at risk.
But firms of all sizes will always need fresh talent. To compete, large firms have to steadily increase their new associate salaries—“$160,000 for first-years in New York and $145,000 for competitive firms in other parts of the country,” Raasch reports. These salaries haven’t yet worked their way down to mid-size or smaller firms, but a number of so-called specialty firms—litigation or intellectual property boutiques—do offer these salaries to incoming associates.
To earn these salaries, associates are working more and more billable hours. And, thanks to the continuing advances of modern technology, they are expected to perform more work (with the help of this technology) in the same amount of time. This is the vicious cycle they find themselves in as partners ostensibly pile on more and more work, in an effort to boost the firm’s PPP.
What makes it even tougher, according to associates, is that, the higher up you go and the larger the firm, the less direction or mentoring you’re apt to find. So we’re back at the associates spending far too much time on the computer to make an impression on their clients…or to find their work satisfying.
If associates don’t capsize under this, that’s one way to make partner, right? Well, at highly leveraged firms—these are the ones likely to be more profitable—there are less opportunities to do so.
Many highly profitable firms have four or five associates per partner. Additionally, lateral lawyers are wooed away from their firms by promises of making partner. This further decreases the chance for home-grown associates. It’s not surprising that many associates are seeking greener (and calmer) pastures—some at a time when, as senior associates, their value to the firm is immense. It’s been estimated that losing an associate costs a firm $300,000.
There are ways in to check the attrition rate.
Having read the writing on the wall, firms can provide friendlier environments aimed at developing skills and identifying mutually meaningful values. One way in which this is being done is by re-evaluating the terms “partner” and “associate”.
Some firms are looking at senior associates as valuable employees who may or may not want to make partner. (It makes sense to theorize that this alternative scenario may result in a welcome easing-up of pressure.) Too, instead of the fast-track to partnership, there are firms that are lengthening the time it takes to achieve that goal, and moving it up to 10 or 12 years.
Additionally, special employment terms can be arrived at which enable firms to put lawyers under contract. And, to accommodate lawyers who are in transition, titles like “of counsel”, “staff attorney” and “special counsel” are being used within a firm. Finally, there are alternative scheduling programs, where a lawyer can temporarily be taken off the partnership track. To read more, go here: http://bit.ly/jZR152