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June 23, 2009

Comments

Cliff Tuttle

There's another practice being rewarded here that is guaranteed to make clients look for a new lawyer. Over-billing. A case is only worth a specified amount. If the attorneys fees are out of proportion to the value of the case, the client will soon figure out that using your law firm is a losing proposition.

What a deal! You've made your associate and your client resentful! Maybe the associate will move elsewhere and take the client with him (her).

Cliff Tuttle
Pittsburgh Legal Back Talk

Adam Stock

I think there is more to it.

The policy makes sense from an economic point of view. As you point out, it makes very little sense from the point of view of providing incentives for these associates to become business developers. (The assumption in your post is that THIS policy will keep associates from developing business. There are MANY mixed messages that law firms send to associates about spending time building business versus billing.)

Law firms spend a huge amount of money building a talent pool. They also invest heavily in junior associates who are getting relatively high salaries for the work that they produce. These salaries have been driven up by market forces: competition for a limited pool of talented student graduating from law schools.

In a down economy, where presumably fewer law school graduates are getting hired, there is less competition so market prices would drop. If these first and second year associates were to lose their jobs, they would be in competition with newly minted lawyers. While this is a policy sure to anger these associates, it makes logical economic sense - especially if competing law firms follow suit.

The more interesting question, I think, is whether the policy in the interest of clients.

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