bk1 wrote:JCougar wrote:It's highly unprofitable for big firms to hire new associates that leave after three years.
What? Isn't their hiring model based on the fact that new associates leave after several years?
They'd rather the people not leave. It's just a fact of life that many law graduates hate Biglaw so much that, despite the awesome salaries, they're going to leave anyways.
Unless you're at a prestigious white shoe firm that can bill you out for $300/hour or higher, most first and second-year associates are a net loss for big firms. Think about it. They bill you out at $200/hour, you have to bill 2000 hours/year. That's $400,000 dollars a year that they bring in. But clients are always complaining about hours that shouldn't have been billed, so naturally, they get discounts, etc. So these firms are really only pulling in $300-350K from your work.
In addition to your $160K salary, they have to pay for all your health and dental benefits, among other perks, plus they have to pay your secretary's salary and health benefits as well, which brings your total costs close to $300K. On top of that, they have to pay rent on your office space (usually in a prime rent area), and other firm overhead.
You won't turn a profit for your firm until your third or fourth year under normal circumstances. This is why firms are increasingly looking farther than just grades. They want associates that will stay for 8 years.