RECESSION PANIC MEGAPOST: Bad economy threads go here!

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rayiner
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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 11:32 am

Cleareyes wrote:And how high up does this go? Are we going to see a bunch of Harvard doc reviewers?


Unlikely. Even if biglaw hiring contracts to 1/3, the HYS folks have a ton of margin. But let's face it, bottom-half GULC folks were marginal even before the bust. GULC generated a ton of doc-reviewers in the boom, and that number is going to explode during the best.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby patentlaw » Sat Apr 04, 2009 11:36 am

lawgrl09 wrote:But firms are being affected across the board and it doesn't matter where you went to school. All that matters is your firm's performance: does it have enough clients, cases, billable hours for everyone, are you pulling your weight, can clients afford to pay, etc. Dechert, Morgan Lewis, Locke Lord Bissell & Liddell, Wolf Block (no longer in existence), Pepper Hamilton, Orrick, Covington & Burling, Wickersham Taft, etc. etc. etc. If one of these firms is suffering and needs to lay off people, you're going to be affected no matter where you went to school. They're not going to say "but he went to HYS and we shouldn't let him go as opposed to the guy who went to a TTT." No, it'll be because of the bottom line. If one of these firms is suffering and needs to cut back its summer programme, you're going to be affected no matter where you went to school. They're not going to say "but he went to a T10 and therefore we should pick him over the guy who went to a T20." They're going to see whether they have the money to pay you for the summer or not.


I'll say this much, I know of at a couple of firms in the area who are pulling out of lower tier schools' OCI programs but staying at the top schools in the area.

As far as firing people, all that really matters is your billables, school doesn't matter. A couple of my classmates (from a T10) have been laid off before lower tier grads because their hours were low.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 11:36 am

davosdank wrote:rayiner, what i should have said is, t20's won't get biglaw almost at all in order to provide t10's/regional t14esque's with jobs, that's what i see as likely, you don't see this as plausible?


I don't think it's plausible to the extent that you think it is. Consider a hypothetical example: we have a bottom-quarter Cornell grad and a top-quarter BC/BU grad. In a normal economy, the former might still get NYC biglaw. In this economy, I think the odds are that he probably won't. Now, if he decides to go looking in Boston, is a Boston biglaw firm going to hire him over the top-quarter BC/BU grad? I don't think they would do so in a good economy, and I don't see how that would change ITE.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby davosdank » Sat Apr 04, 2009 11:38 am

rayiner wrote:
davosdank wrote:rayiner, what i should have said is, t20's won't get biglaw almost at all in order to provide t10's/regional t14esque's with jobs, that's what i see as likely, you don't see this as plausible?


I don't think it's plausible to the extent that you think it is. Consider a hypothetical example: we have a bottom-quarter Cornell grad and a top-quarter BC/BU grad. In a normal economy, the former might still get NYC biglaw. In this economy, I think the odds are that he probably won't. Now, if he decides to go looking in Boston, is a Boston biglaw firm going to hire him over the top-quarter BC/BU grad? I don't think they would do so in a good economy, and I don't see how that would change ITE.


i'd agree, b/c you are using cornell, just stick to the traditional t10's, b/c granted, ITE, it's not t14, it's t10..cornell is pretty regional compared to mich/uva/penn/boalt

and i'm talking about if they all go to NYC/DC
Last edited by davosdank on Sat Apr 04, 2009 11:39 am, edited 1 time in total.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 11:39 am

davosdank wrote:the bottom quartile at most t10's could get biglaw, at UVA - 50 percent of the bottom quartile got V20 the past 2 years (90/roughly 180), this won't continue for that prestegious of firm, but that's better than the top of t20/30's could get w/o great softs

therefore i say your logic doesn't hold up to recent statistics


Yeah, my argument is really more pertinent to lower T14 than bottom T10. I wasn't aware that UVA's biglaw placement was so good, though. I think the general consensus on this site is top 80% or so for biglaw from T10, much less V20...

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby davosdank » Sat Apr 04, 2009 11:40 am

rayiner wrote:
davosdank wrote:the bottom quartile at most t10's could get biglaw, at UVA - 50 percent of the bottom quartile got V20 the past 2 years (90/roughly 180), this won't continue for that prestegious of firm, but that's better than the top of t20/30's could get w/o great softs

therefore i say your logic doesn't hold up to recent statistics


Yeah, my argument is really more pertinent to lower T14 than bottom T10. I wasn't aware that UVA's biglaw placement was so good, though. I think the general consensus on this site is top 80% or so for biglaw from T10, much less V20...


well, keep in mind that that's 50 percent of the bottom quartile when the economy was healthier, it was shocking to me, but then i learned that NYU median gets V10 no problem (before), and it made a little bit more sense to me

lets assume all these grads go to either NYC or DC

i feel like we have a middle ground, but typing makes it hard to find

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby davosdank » Sat Apr 04, 2009 11:43 am

also, a lot of the top part of a class opts out of biglaw for clerkships/PI/etc at a t10...

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby someday504 » Sat Apr 04, 2009 11:45 am

My source indicates that lots of clients are consolidating their list of preferred BigLaw firms. Clients are asking for RFP and RFQs. Consequences?

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 11:49 am

someday504 wrote:My source indicates that lots of clients are consolidating their list of preferred BigLaw firms. Clients are asking for RFP and RFQs. Consequences?


Frankly, I think in the long run, the biglaw model is dead. I don't think it was sustainable to begin with. Legal hiring is going to become more commoditized due to market pressures on firms to cut billing rates. Law is going to start looking like other industries. Eg: Google makes shit-tons of money, but it's not like they pay Stanford grads 2x as much as everyone else. In the long run, I don't see how biglaw can afford to be any different.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby as stars burn » Sat Apr 04, 2009 11:50 am

davosdank wrote:so all t10 grads are SoL for 2012?

or are you speaking more generally


I hope the economy is a little better by 2012/2013 (but that's just wishful thinking).

I agree with every other person that everything is hurting right now due to the recession. No one is really safe. Even schools and hospitals are on hiring freezes.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby davosdank » Sat Apr 04, 2009 11:52 am

rayiner wrote:
someday504 wrote:My source indicates that lots of clients are consolidating their list of preferred BigLaw firms. Clients are asking for RFP and RFQs. Consequences?


Frankly, I think in the long run, the biglaw model is dead. I don't think it was sustainable to begin with. Legal hiring is going to become more commoditized due to market pressures on firms to cut billing rates. Law is going to start looking like other industries. Eg: Google makes shit-tons of money, but it's not like they pay Stanford grads 2x as much as everyone else. In the long run, I don't see how biglaw can afford to be any different.


b/c it's a completely different field, i gotta go, but at this point, you are trying to compare 2 markets with very different mechanics, 2 big industries =/= 2 analagous industries

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby someday504 » Sat Apr 04, 2009 11:53 am

rayiner wrote:
someday504 wrote:My source indicates that lots of clients are consolidating their list of preferred BigLaw firms. Clients are asking for RFP and RFQs. Consequences?


Frankly, I think in the long run, the biglaw model is dead. I don't think it was sustainable to begin with. Legal hiring is going to become more commoditized due to market pressures on firms to cut billing rates. Law is going to start looking like other industries. Eg: Google makes shit-tons of money, but it's not like they pay Stanford grads 2x as much as everyone else. In the long run, I don't see how biglaw can afford to be any different.


Not sure if I completely agree with your idea. I suppose biglaw will be forced to change its billing scheme but pedigrees will remain relevant.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 11:55 am

davosdank wrote:
rayiner wrote:
someday504 wrote:My source indicates that lots of clients are consolidating their list of preferred BigLaw firms. Clients are asking for RFP and RFQs. Consequences?


Frankly, I think in the long run, the biglaw model is dead. I don't think it was sustainable to begin with. Legal hiring is going to become more commoditized due to market pressures on firms to cut billing rates. Law is going to start looking like other industries. Eg: Google makes shit-tons of money, but it's not like they pay Stanford grads 2x as much as everyone else. In the long run, I don't see how biglaw can afford to be any different.


b/c it's a completely different field, i gotta go, but at this point, you are trying to compare 2 markets with very different mechanics, 2 big industries =/= 2 analagous industries


Yes, they're two different industries, but largely because of the fact that the historical monopolization of law by the ABA has created an industry that is resistant to market forces. I don't think biglaw firms will be able to maintain that arrangement.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby davosdank » Sat Apr 04, 2009 11:57 am

rayiner wrote:
davosdank wrote:
rayiner wrote:
someday504 wrote:My source indicates that lots of clients are consolidating their list of preferred BigLaw firms. Clients are asking for RFP and RFQs. Consequences?


Frankly, I think in the long run, the biglaw model is dead. I don't think it was sustainable to begin with. Legal hiring is going to become more commoditized due to market pressures on firms to cut billing rates. Law is going to start looking like other industries. Eg: Google makes shit-tons of money, but it's not like they pay Stanford grads 2x as much as everyone else. In the long run, I don't see how biglaw can afford to be any different.


b/c it's a completely different field, i gotta go, but at this point, you are trying to compare 2 markets with very different mechanics, 2 big industries =/= 2 analagous industries


Yes, they're two different industries, but largely because of the fact that the historical monopolization of law by the ABA has created an industry that is resistant to market forces. I don't think biglaw firms will be able to maintain that arrangement.


i stayed for another min,

it's not that biglaw firms pay 2X for the same work though! It's who gets the work, that's a different distinction

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 12:12 pm

davosdank wrote:i stayed for another min,

it's not that biglaw firms pay 2X for the same work though! It's who gets the work, that's a different distinction


Ultimately, it's not about who "gets" to do the work, it's about who "can" do the work. There are a lot more people going into law now than before. That's something that disproportionally affects the bottom of the profession, but it's something that affects the top too, because when you have more people overall, you have more people above a certain level of qualification.

Look at it this way. In 2001, NU's median LSAT was 167. A 167 was generally good enough for T14 or even T10 back then. Today, it's more of a T25 score. Now, if 167's were smart enough to do biglaw work before, are they not smart enough to do it today? Has the work really fundamentally changed that much in the last decade? Of course not. What we're simply witnessing is a growth in the number of people qualified to do a certain type of work that outstrips the growth in the availability of that work. There is no way that trend is not going to cause substantial changes in the industry.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby Cleareyes » Sat Apr 04, 2009 12:18 pm

rayiner wrote:
davosdank wrote:i stayed for another min,

it's not that biglaw firms pay 2X for the same work though! It's who gets the work, that's a different distinction


Ultimately, it's not about who "gets" to do the work, it's about who "can" do the work. There are a lot more people going into law now than before. That's something that disproportionally affects the bottom of the profession, but it's something that affects the top too, because when you have more people overall, you have more people above a certain level of qualification.

Look at it this way. In 2001, NU's median LSAT was 167. A 167 was generally good enough for T14 or even T10 back then. Today, it's more of a T25 score. Now, if 167's were smart enough to do biglaw work before, are they not smart enough to do it today? Has the work really fundamentally changed that much in the last decade? Of course not. What we're simply witnessing is a growth in the number of people qualified to do a certain type of work that outstrips the growth in the availability of that work. There is no way that trend is not going to cause substantial changes in the industry.


Except that law is not a static profession. It's adversarial. Think about it this way. In say, engineering, if you can build a bridge you can build a bridge. It doesn't matter if you can also build a rocket ship if the job is building a bridge. In law, it's about who can outstrategize outwork and out think the opposition. Maybe not 100%, but to a good degree. So there will always be a premium for the best of the best. If everyone has moved from knives to revolvers, you better get you an AK 47. Once everyone has those, you're going to need a chopper. Etc...

The more important question, IMO, is how much of big law is just wasteful egotistical elitist hogwash. A good amount. That's the fat that can be cut, and that's where the damage will be done. As with every recession, we soon find out who and what were necessary for success vs who and what were just there because they could be afforded in boom times.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 12:23 pm

Cleareyes wrote:Except that law is not a static profession. It's adversarial. Think about it this way. In say, engineering, if you can build a bridge you can build a bridge. It doesn't matter if you can also build a rocket ship if the job is building a bridge. In law, it's about who can outstrategize outwork and out think the opposition. Maybe not 100%, but to a good degree. So there will always be a premium for the best of the best. If everyone has moved from knives to revolvers, you better get you an AK 47. Once everyone has those, you're going to need a chopper. Etc...


Yeah, I was mulling that point around in my head as I was writing my previous post. I honestly don't know the degree to which the adversarial aspect plays a role, though I do agree with you that it is an important issue. Frankly, I don't have any idea how much that plays into the mathematics. At what point does it make sense for a business to hire a bunch of 170s over a bunch of 167s, considering that there are twice as many of the latter, and presumably they'd be cheaper.

One thing I think you will see is a further stratification of legal services. Corporations are going to be less inclined to spend $$$ to get top-firms with top-hires to do mundane legal work. They might maintain the services of such firms for big litigation, but may choose smaller, cheaper firms for routine contracts. I don't think the current legal industry with it's $160k or bust salaries is really set up for that sort of thing.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby Cleareyes » Sat Apr 04, 2009 12:31 pm

rayiner wrote:
Cleareyes wrote:Except that law is not a static profession. It's adversarial. Think about it this way. In say, engineering, if you can build a bridge you can build a bridge. It doesn't matter if you can also build a rocket ship if the job is building a bridge. In law, it's about who can outstrategize outwork and out think the opposition. Maybe not 100%, but to a good degree. So there will always be a premium for the best of the best. If everyone has moved from knives to revolvers, you better get you an AK 47. Once everyone has those, you're going to need a chopper. Etc...


Yeah, I was mulling that point around in my head as I was writing my previous post. I honestly don't know the degree to which the adversarial aspect plays a role, though I do agree with you that it is an important issue. Frankly, I don't have any idea how much that plays into the mathematics. At what point does it make sense for a business to hire a bunch of 170s over a bunch of 167s, considering that there are twice as many of the latter, and presumably they'd be cheaper.

One thing I think you will see is a further stratification of legal services. Corporations are going to be less include to spend $$$ to get top-firms with top-hires to do mundane legal work. They might maintain the services of such firms for big litigation, but may choose smaller, cheaper firms for routine contracts. I don't think the current legal industry with it's $160k or bust salaries is really set up for that sort of thing.


I find it interesting that you use 167s and 170s s your markers rather than Harvard grads vs lowly Northwestern grads. Static view of human intelligence? Anyway, I don't know the answer to that question, but I think that it is at least sometimes. Intellectual skills aren't like physical strength. It's not just about cumulative strength.

And I agree with you about spending money getting top firms to do mundane tasks and how silly it is. That stuff should be moved in house or farmed out to mid rate firms. That's the kind of fat I'm talking about, and it's already getting hacked away at.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby Mr. Matlock » Sat Apr 04, 2009 12:33 pm

Cleareyes wrote:
rayiner wrote:
davosdank wrote:i stayed for another min,

it's not that biglaw firms pay 2X for the same work though! It's who gets the work, that's a different distinction


Ultimately, it's not about who "gets" to do the work, it's about who "can" do the work. There are a lot more people going into law now than before. That's something that disproportionally affects the bottom of the profession, but it's something that affects the top too, because when you have more people overall, you have more people above a certain level of qualification.

Look at it this way. In 2001, NU's median LSAT was 167. A 167 was generally good enough for T14 or even T10 back then. Today, it's more of a T25 score. Now, if 167's were smart enough to do biglaw work before, are they not smart enough to do it today? Has the work really fundamentally changed that much in the last decade? Of course not. What we're simply witnessing is a growth in the number of people qualified to do a certain type of work that outstrips the growth in the availability of that work. There is no way that trend is not going to cause substantial changes in the industry.


Except that law is not a static profession. It's adversarial. Think about it this way. In say, engineering, if you can build a bridge you can build a bridge. It doesn't matter if you can also build a rocket ship if the job is building a bridge. In law, it's about who can outstrategize outwork and out think the opposition. Maybe not 100%, but to a good degree. So there will always be a premium for the best of the best. If everyone has moved from knives to revolvers, you better get you an AK 47. Once everyone has those, you're going to need a chopper. Etc...

The more important question, IMO, is how much of big law is just wasteful egotistical elitist hogwash. A good amount. That's the fat that can be cut, and that's where the damage will be done. As with every recession, we soon find out who and what were necessary for success vs who and what were just there because they could be afforded in boom times.

^^^^^ Ladies and Gentlemen... This man is wise beyond his years. ^^^^^^^^

Well stated my good man. Please continue. Add this to all your other insightful posts... I suggest you start a blog. Whatever you've done to get here, are doing day to day, reading, learning, eating, etc... Inquiring minds want to know! I don't think I'm too old to learn a thing or ten. :D Thank you.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby 06072010 » Sat Apr 04, 2009 12:38 pm

There is so much shit-tastic speculation in here, I want to punch myself in the junk until I forget my name.

Biglaw is not dead. Comparing biglaw to midlaw is like comparing McDonalds to Peter Lugers. Sure they're still in the same business of serving food, but NOT TO THE SAME CLIENT BASE.

Maybe the lockstep model of compensation is done, but we'll see about that. 1st years just aren't profitable for the firm at what they're paid now. The only way they can even get them close to being profitable is by working them until near death. I think that you'll see compensation moved to a tiered billable system more than what you see now. Also, I think you'll stop seeing firms leverage so hard. Maybe firms are content to over leverage during good times and dump those attorneys when business is down -- I think it all depends on whether firms take a reputation hit or not. Nobody contests that we're in uncharted territory as far as law firm economics go, but the biglaw business strategy is sound. Perhaps the billable hour system eats it, perhaps lockstep comp eats it, but most of the Vault 100 firms aren't going anywhere.

Biglaw thrives because oftentimes the deals / litigation involved are bet the fucking company. Sure, any number of firms could do the work, but they want the best. They don't even hire firms, they hire PRACTICE AREAS, and often SPECIFIC PARTNERS in the firm. You people here make it seem like your local toilet law could do the work the big shops do and that's simply not true. The big boys have serious experience in complicated matters. Big boy rainmakers with big boy clients need the support services of a full-service firm to be able to get their work done, so it's not like partners could just split off into an office above their house and still do the work.

I suggest that the tin-foil hat crowd predicting the eventual downfall of biglaw educate themselves on firm economics. It's the compensation / billing structures that are in jeopardy, not the overall system.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby someday504 » Sat Apr 04, 2009 12:45 pm

PKSebben wrote:There is so much shit-tastic speculation in here, I want to punch myself in the junk until I forget my name.

Biglaw is not dead. Comparing biglaw to midlaw is like comparing McDonalds to Peter Lugers. Sure they're still in the same business of serving food, but NOT TO THE SAME CLIENT BASE.

Maybe the lockstep model of compensation is done, but we'll see about that. 1st years just aren't profitable for the firm at what they're paid now. The only way they can even get them close to being profitable is by working them until near death. I think that you'll see compensation moved to a tiered billable system more than what you see now. Also, I think you'll stop seeing firms leverage so hard. Maybe firms are content to over leverage during good times and dump those attorneys when business is down -- I think it all depends on whether firms take a reputation hit or not. Nobody contests that we're in uncharted territory as far as law firm economics go, but the biglaw business strategy is sound. Perhaps the billable hour system eats it, perhaps lockstep comp eats it, but most of the Vault 100 firms aren't going anywhere.

Biglaw thrives because oftentimes the deals / litigation involved are bet the fucking company. Sure, any number of firms could do the work, but they want the best. They don't even hire firms, they hire PRACTICE AREAS, and often SPECIFIC PARTNERS in the firm. You people here make it seem like your local toilet law could do the work the big shops do and that's simply not true. The big boys have serious experience in complicated matters. Big boy rainmakers with big boy clients need the support services of a full-service firm to be able to get their work done, so it's not like partners could just split off into an office above their house and still do the work.

I suggest that the tin-foil hat crowd predicting the eventual downfall of biglaw educate themselves on firm economics. It's the compensation / billing structures that are in jeopardy, not the overall system.


I agree that BigLaw will end as much as the world will too. I suppose anything is possible but in all likelihood BigLaw will change its billing scheme. I have heard a rumor that non-NYC firms will obtain more work because those other firms offer lower rates but I suspect NYC firms will just lower rates to become more competitive. However, parts of the legal industry have become so distorted (like the financial industry) that I'm not sure how to correct for all the bloated salaries.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby Cleareyes » Sat Apr 04, 2009 12:48 pm

someday504 wrote:
PKSebben wrote:There is so much shit-tastic speculation in here, I want to punch myself in the junk until I forget my name.

Biglaw is not dead. Comparing biglaw to midlaw is like comparing McDonalds to Peter Lugers. Sure they're still in the same business of serving food, but NOT TO THE SAME CLIENT BASE.

Maybe the lockstep model of compensation is done, but we'll see about that. 1st years just aren't profitable for the firm at what they're paid now. The only way they can even get them close to being profitable is by working them until near death. I think that you'll see compensation moved to a tiered billable system more than what you see now. Also, I think you'll stop seeing firms leverage so hard. Maybe firms are content to over leverage during good times and dump those attorneys when business is down -- I think it all depends on whether firms take a reputation hit or not. Nobody contests that we're in uncharted territory as far as law firm economics go, but the biglaw business strategy is sound. Perhaps the billable hour system eats it, perhaps lockstep comp eats it, but most of the Vault 100 firms aren't going anywhere.

Biglaw thrives because oftentimes the deals / litigation involved are bet the fucking company. Sure, any number of firms could do the work, but they want the best. They don't even hire firms, they hire PRACTICE AREAS, and often SPECIFIC PARTNERS in the firm. You people here make it seem like your local toilet law could do the work the big shops do and that's simply not true. The big boys have serious experience in complicated matters. Big boy rainmakers with big boy clients need the support services of a full-service firm to be able to get their work done, so it's not like partners could just split off into an office above their house and still do the work.

I suggest that the tin-foil hat crowd predicting the eventual downfall of biglaw educate themselves on firm economics. It's the compensation / billing structures that are in jeopardy, not the overall system.


I agree that BigLaw will end as much as the world will too. I suppose anything is possible but in all likelihood BigLaw will change its billing scheme. I have heard a rumor that non-NYC firms will obtain more work because those other firms offer lower rates but I suspect NYC firms will just lower rates to become more competitive. However, parts of the legal industry have become so distorted (like the financial industry) that I'm not sure how to correct for all the bloated salaries.


Mass layoffs or bankruptcy. We KNOW that firms have already gone under in this economy. More will. During the return to prosperity new ones will rise.

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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby rayiner » Sat Apr 04, 2009 1:00 pm

Cleareyes wrote:I find it interesting that you use 167s and 170s s your markers rather than Harvard grads vs lowly Northwestern grads. Static view of human intelligence? Anyway, I don't know the answer to that question, but I think that it is at least sometimes. Intellectual skills aren't like physical strength. It's not just about cumulative strength.

And I agree with you about spending money getting top firms to do mundane tasks and how silly it is. That stuff should be moved in house or farmed out to mid rate firms. That's the kind of fat I'm talking about, and it's already getting hacked away at.


I don't know about Harvard versus Northwestern, the difference between CCN and DCG is 0.003 GPA points and 3.03 LSAT points, averaged at the medians. Meanwhile, CCN puts on average 71% of its grads into V100 firms, while DCG puts only 45%. Unless law firms really think that the education at CCN is almost twice as good, I'd say I'm not the only one with a static view of human intelligence...

EDIT: I'm kinda curious about this whole "50% of the bottom quarter at UVA get V20" business. According to http://lawfirmaddict.blogspot.com/, UVA's V25 placement was just about 21% in 2006. Have the figures changed so dramatically in 2 years that bottom quartile at UVA has even any hope at V20, much less 50/50 odds of getting it?

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Mr. Matlock
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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby Mr. Matlock » Sat Apr 04, 2009 1:03 pm

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ruleser
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Re: RECESSION PANIC MEGAPOST: Bad economy threads go here!

Postby ruleser » Sat Apr 04, 2009 1:05 pm

PKSebben wrote:There is so much shit-tastic speculation in here, I want to punch myself in the junk until I forget my name.

Biglaw is not dead. Comparing biglaw to midlaw is like comparing McDonalds to Peter Lugers. Sure they're still in the same business of serving food, but NOT TO THE SAME CLIENT BASE.

Maybe the lockstep model of compensation is done, but we'll see about that. 1st years just aren't profitable for the firm at what they're paid now. The only way they can even get them close to being profitable is by working them until near death. I think that you'll see compensation moved to a tiered billable system more than what you see now. Also, I think you'll stop seeing firms leverage so hard. Maybe firms are content to over leverage during good times and dump those attorneys when business is down -- I think it all depends on whether firms take a reputation hit or not. Nobody contests that we're in uncharted territory as far as law firm economics go, but the biglaw business strategy is sound. Perhaps the billable hour system eats it, perhaps lockstep comp eats it, but most of the Vault 100 firms aren't going anywhere.

Biglaw thrives because oftentimes the deals / litigation involved are bet the fucking company. Sure, any number of firms could do the work, but they want the best. They don't even hire firms, they hire PRACTICE AREAS, and often SPECIFIC PARTNERS in the firm. You people here make it seem like your local toilet law could do the work the big shops do and that's simply not true. The big boys have serious experience in complicated matters. Big boy rainmakers with big boy clients need the support services of a full-service firm to be able to get their work done, so it's not like partners could just split off into an office above their house and still do the work.

I suggest that the tin-foil hat crowd predicting the eventual downfall of biglaw educate themselves on firm economics. It's the compensation / billing structures that are in jeopardy, not the overall system.


+!
I won't be specific just to protect the innocent, but just think about (or if you don't know off-hand, look into) which cases Big Law handles. From the cases I know, just think Fortune 50 company being hit with a lawsuit that would eliminate half its profits, another being IP sued in a manner that could put it out of business, a different type massive company being sued for multi-billions. May sound kind of rare, but go into business. How many mergers, how many suits of every type are you constantly hit with.

AND ITE, the number of suits, IMO, will drastically increase - when people get desperate, they sue and sue - companies will sue companies, people will go after big cash, everything from malpractice suits to suits against companies, from what I hear, is already jacking up....

Big Law is not dead, but like PK says, the way they compensate newbies may change - which I think could be for the better. Instead of hiring 10 people at 130K each and working them 16 hours a day, they may hire at first 10 people at 100K each, because there's only 10 hours a day - tuitions need to start coming down (they have increased absurdly) due to decreased pay, so debt loads will come down - and as the economy picks up, maybe the pay stays 100K and the hours more reasonable - they don't bet as much on each employee, and hire 13 at 100K instead of 10 at 130K - they are used less for the reasons everyone states above (less people wanting to pay for 1st year assocs) so work fewer hours but the lower pay offsets that. In the end, the more sweatshopish model that handed all the cash to a few while working them to death, maybe, is replaced by a better model for all: for the company, the clients, and law students.

Sorry for being positive/optimistic. I know it's not so in fashion. Big Law dead? Um... I guess Microsoft will just turn to a mid-size firm the next time Apple sues it...




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