According to one attorney-turned-developer’s calculations, after 43 year of employment, at age 65, the software developer will have saved $2,102,010 by investing in a fourth of his take home pay minus student loans.
What’s the figure for an attorney? Almost a million dollars less than the software developer ($1,268,404).
So how did William Ha, former civil litigator, come to this conclusion?
First, an attorney starts his career later and with higher student debt—a lot higher. As a result, the take-home pay that an attorney is able to invest over the next 40 years is both lower and delayed.
Of course, Ha acknowledges that each job has an “X Factor” that accounts for non-monetary yields. For example:
“The lawyer can make partner at a rather large, making a base pay of say $1,000,000 a year, and the software developer can take a company public as an earlier employee if not CEO, cashing in on his own millions,” writes Ha.
There are a variety of unknowns that affect this calculation, but Ha believes that the software engineer still wins out. A software engineer gets paid a pretty penny for any side work she completes (and a lawyer is not allowed to offer the same services).
In addition, law firms cannot go public based on ABA Professional Rules. Furthermore, to maintain the professional independence of a lawyer, no lawyer or law firm can share legal fees with a non-lawyer, explains Ha in “Economics of Software Development v. The Practice of Law – A Rough Look at the Professions”.
So, whereas law firm behemoth, Baker and McKenzie, brings in $2.54 billion in revenue in 2014, with over 11,500 employees (roughly $173,000 per employee—if they can shares these legal fees), Facebook for the same year, brings in 12.466 billion with 6,337 employees, creating $1,700,000 per employee.
In software development, it certainly pays to work for “the man.” For lawyers, it pays to be partner.
Ha moved to Los Angeles after leaving civil litigation and worked for an iOS app developer (via ATL).
“There, I saw young people my age and younger 1) making a good salary, 2) having fun at work, 3) leaving on the dot at 5pm, and 4) not having to deal with a brutal job market. This was the first exposure to software development (aside from my preconceived notions). Is this real life? I wanted to be part of this somehow…”
As a law firm manager, does that mean you should quit (and encourage young associates to quit) to join the ranks of Facebook employees?
No, not necessarily. What Ha points out is that so much of what makes a career “worthwhile” is (1) passion and interest in the field; and (2) lifestyle.
To retain your law firm associates, it’s important to remind them why they decided to become lawyers in the first place. Perhaps it was passion for the law. If so, allow your young associates to take on pro-bono cases that they’re passionate about.
If your young associates are keen on making partner, enroll them in business development courses. Encourage them to network at professional events or join legal associations. Host dinners for your community businesses and mentor your young associates in the art of wining and dining potential new clients.
Finally, if your associates are starting to burn out—much like Ha—provide more flexible hours or a more comfortable workplace. There are a variety of innovative workplace practices that your firm can implement that don’t cost a dime, but improve the morale and the retention rates of employees (read about some suggestions here).
When interviewing potential new associates, hiring partners asks hard questions about why these law school grads what to join the firm. But, it’s equally valuable to investigate why young talent is leaving.
A growing number of firms have created non-partnership/career associate tracks to address client’ demands for value. These associates work fewer hours, and are paid lower salaries than partner-track lawyers. So how then does the firm incentivize these lawyers?
Balancing compensation in a firm that embraces multiple associate tracks is tricky. Keeping non-partner and partner tier associates happy and committed to the firm requires a compensation plan that fairly reflects the efforts, hours and status of each.
Learn more about attracting, retaining and compensating career associates with an eye towards loyalty, fairness, and firm profitability in C4CM’s webinar “Re-inventing Associate Compensation: Pay Structures that Incentivize, Reward & Retain Non-Partner Track Attorneys” on Wednesday, June 24, 2015 at 2:00 PM to 3:15 PM Eastern.
You will learn how to:
- Use creativity, rather than conformity as a criteria for non-salary rewards
- Utilize proven methods leading firms are using to create firm-building bonus structures for these associates
- Build associate loyalty and reduce turnover
- Increase associate awareness of firm business when they are not tasked as rainmakers
- Evaluate career associate performance in addition to hours