Question about partner:associate leverage

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Anonymous User
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Question about partner:associate leverage

Postby Anonymous User » Mon Oct 08, 2012 7:41 pm

In several firms I looked at, the leverage of corporate and litigation are quite different. For example, one firm's corporate practice is 1:2.3. Compared to their litigation group which is 1:5.1. What kind of effect does the difference have on young associates? If it matters, most of the corporate practices in the firm are band one and litigation is band 2.

Anonymous User
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Re: Question about partner:associate leverage

Postby Anonymous User » Mon Oct 08, 2012 8:37 pm

From my understanding, leverage ratios have more to do with the type of work than just a broad distinction between corporate and litigation. For example, large scale commercial litigation requires high leverage because the bulk of the work is done in discovery. No client is going to pay to have a bunch of partners sifting through file cabinets, so having one partner marshaling around a bunch of associates is required to be cost effective . Conversely, a criminal defense practice requires almost no leverage to be cost effective because you don't need an army of eager young associates running around sifting through the production. Other types of litigation practices like government investigations / regulatory litigation presumably have different leverage sweet spots as well. I don't know much about the corporate side, but I presume it works the same way where some types of corporate practices require high leverage and others don't. If you're seeing massive disparities between the litigation and corporate side of a firm, it's probably just a reflection of the different types of work their corporate and litigation partners engage in.

As for the effect leverage has on young associates, it's really too variable to say. As alluded to above, proper leverage is a balancing act. It is not always a good thing to be highly leveraged nor is it always a bad thing. You'll need to come up with a more specific question before you get any kind of meaningful feedback.

imchuckbass58
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Re: Question about partner:associate leverage

Postby imchuckbass58 » Mon Oct 08, 2012 10:26 pm

Generally, corporate is less leveraged than litigation at big firms. Take a look at NALP stats at pretty much any big firm - litigation is almost always (noticeably) higher than corporate.

This is because (generally) a larger portion of the actual work in a corporate transaction needs to be done by lawyer with expertise. With the exception of diligence, corporate work is a lot of drafting, negotiation, structuring, etc. Litigation tends to have more tasks that can be done with armies of associates (doc review, other discovery-related tasks, cite checking, basic legal research).

Generally, higher leverage means less substantive work at junior levels, while lower leverage can (but does not always) mean you'll be working harder since there's less people to spread work across. But, I'd be careful about comparing across departments, or across firms with very different practices (as the poster above alluded to). Corporate and litigation are totally different animals, so it doesn't even really mean anything to say you'll do "more substantive work" in corporate because the leverage is lower. But, if you're comparing two litigation departments at NYC biglaw firms, I think it's fair to say you have a greater chance at getting substantive work at the firm with lower leverage.




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