Why don't US firms require articling? Forum

[General Tso]

Someone posted this on TLS the other day, and it made me wonder if it doesnt make more sense from both firm and client perspectives. http://www.economist.com/node/17461573? ... d=17461573

John Conroy, until last month the boss of Baker & McKenzie, the most globalised law firm, thinks England and Germany do better at helping graduates make the transition to becoming practising lawyers. A recent graduate spends two years combining work and study as a trainee solicitor in England and Referendar in Germany. The English system matches graduates to firms well, whereas the German system produces exceptional legal technicians, in Mr Conroy’s view. In America, clients grumble that they are being billed at high rates for recent graduates who contribute little. “Clients shouldn’t be paying for law firms to train people,” is their refrain. Right now, many graduates wish they could get anybody to pay them for anything.

Why DO firms feel the need to pay $160,000+ for unproven talent? Why not hire twice as many lawyers straight out of school, pay them 40k per year, and keep only the ones who show the most promise in those two years? That way the firm gets the better attorney and the client doesn't pay through the nose to train attorneys.

[James Bond]

Reading the article now but two things:

1. I love the Economist

2. This graph is fucking frightening:

--ImageRemoved--

[kazu]

Reading the article now but two things:

1. I love the Economist

2. This graph is fucking frightening:

--ImageRemoved--

+1 on both accounts.

[Pleasye]

Reading the article now but two things:

1. I love the Economist

2. This graph is fucking frightening:

--ImageRemoved--

Wow.

[nealric]

FYI - Most big firms will not allow a 1st or 2nd year's time to be on their bill, at least from the GC's I heard talk at a corp. counsel symposium I attended.

While there is certainly a movement in this direction, it's certainly not "most" clients.

IMO, it's just a stupid shell game. If law firms can't bill 1st years, they are just going to jack up other billing rates to compensate.

[General Tso]

FYI - Most big firms will not allow a 1st or 2nd year's time to be on their bill, at least from the GC's I heard talk at a corp. counsel symposium I attended.

While there is certainly a movement in this direction, it's certainly not "most" clients.

IMO, it's just a stupid shell game. If law firms can't bill 1st years, they are just going to jack up other billing rates to compensate.

Would there be a need to compensate if the firm's costs were lowered? (ie - 40k salary instead of 160k)

[General Tso]

FYI - Most big firms will not allow a 1st or 2nd year's time to be on their bill, at least from the GC's I heard talk at a corp. counsel symposium I attended.

The client complaints are only half the story. Firms' fixed costs are also too high.

I appreciate the comments, but nobody has really touched on my real question yet -- Why do firms pay 160k to untrained attorneys rather than having them article for 2 years @ ~40k? Historically there may have been a high degree of competition for T14 students, but that is no longer the case today.

As a TTT student, I'd rather see firms hire more attorneys at lower salaries, and let one's worth come to light during the workday rather than on the resume.

[Renzo]

If I ran a law school, I would replace 3L year with a year-long internship with any firm that would agree to it.

Firms get a year instead of 8 weeks to test drive associates (win)
Firms get to train potential new lawyers without paying them (win)
Firms who don't participate still get better-trained lawyers (win)
Students actually learn some lawyering (win)
Students don't have to suffer through 2 wasted semesters of "law and ______" unless they prefer that to actually having a job (win)
School still extorts their rent from the students (win)

[MrKappus]

If I ran a law school, I would replace 3L year with a year-long internship with any firm that would agree to it.

Doesn't Northeastern basically do this w/ their externship program? The fact that Northeastern doesn't have 100% employment at graduation leads me to believe law firms grumble about it, but don't actually want law schools do this. Then again, maybe if a T14 did something similar firms would respond. Not sure, but it's a fun idea.

[king3780]

If I ran a law school, I would replace 3L year with a year-long internship with any firm that would agree to it.

Doesn't Northeastern basically do this w/ their externship program? The fact that Northeastern doesn't have 100% employment at graduation leads me to believe law firms grumble about it, but don't actually want law schools do this. Then again, maybe if a T14 did something similar firms would respond. Not sure, but it's a fun idea.

I think Northeastern and Drexel do a version of this, but with alternating quarters of school and work. It seems like one of those things that makes sense, but it's just hard to get out of the traditional mold for both schools and employers.

[James Bond]

If I ran a law school, I would replace 3L year with a year-long internship with any firm that would agree to it.

Doesn't Northeastern basically do this w/ their externship program? The fact that Northeastern doesn't have 100% employment at graduation leads me to believe law firms grumble about it, but don't actually want law schools do this. Then again, maybe if a T14 did something similar firms would respond. Not sure, but it's a fun idea.

I think Northeastern and Drexel do a version of this, but with alternating quarters of school and work. It seems like one of those things that makes sense, but it's just hard to get out of the traditional mold for both schools and employers.

The problem with Northeastern and Drexel are...that they're Northeastern and Drexel. Top firms don't give a shit.

[Renzo]

If I ran a law school, I would replace 3L year with a year-long internship with any firm that would agree to it.

Doesn't Northeastern basically do this w/ their externship program? The fact that Northeastern doesn't have 100% employment at graduation leads me to believe law firms grumble about it, but don't actually want law schools do this. Then again, maybe if a T14 did something similar firms would respond. Not sure, but it's a fun idea.

I don't know if they do, but if they do I'll bet that it helps their employment stats, even if it doesn't bring them to 100%.

If all schools did it, you'd still have the same number of too few jobs for too many lawyers, but it could change the downstream economics in a lot of positive ways. Firms could bill more of their associates' time, they wouldn't have to predict hiring needs two years out, midmarket firms could hire new grads more comfortably, knowing they have some on the job training, etc.

[vamedic03]

I appreciate the comments, but nobody has really touched on my real question yet -- Why do firms pay 160k to untrained attorneys rather than having them article for 2 years @ ~40k? Historically there may have been a high degree of competition for T14 students, but that is no longer the case today.

There was, and still is, a significant degree of competition for top of the class T-14 students.

[Renzo]

I appreciate the comments, but nobody has really touched on my real question yet -- Why do firms pay 160k to untrained attorneys rather than having them article for 2 years @ ~40k? Historically there may have been a high degree of competition for T14 students, but that is no longer the case today.

There was, and still is, a significant degree of competition for top of the class T-14 students.

Exactly. The firms have always been competing for a very small group of top students, and have paid outrageous salaries, arranged posh summers, etc to get them. Meanwhile, a much larger pool of slightly less top students has benefitted from it by coming along for the ride. The second group has shrunk recently, but firms are still competing for the first group, and anything that hurts an individual firms chances at that group (like paying less) isn't going to be considered.

[FlightoftheEarls]

I appreciate the comments, but nobody has really touched on my real question yet -- Why do firms pay 160k to untrained attorneys rather than having them article for 2 years @ ~40k? Historically there may have been a high degree of competition for T14 students, but that is no longer the case today.

There was, and still is, a significant degree of competition for top of the class T-14 students.

This. There is only a limited amount of top-tier talent.

If you want to attract the most talented young attorneys and everybody else is paying $40,000 per year, what do you do? You pay $60,000 per year and pull in the best business because you have the most talented attorneys working for you. What happens when the other firms catch on to the fact that you're getting the top talent and bump up their pay to $60,000 per year? You raise your pay to ensure your edge in recruiting continues - $75,000 per year. What happens when the other firms catch on to the fact that you're getting the top talent and bump up their pay to $75,000 per year? You raise your pay to ensure your edge in recruiting continues - $100,000 per year. What happens when the other firms catch on to the fact that you're getting the top talent and bump up their pay to $100,000 per year? You raise your pay to ensure your edge in recruiting continues - $125,000 per year. What happens when the other firms catch on to the fact that you're getting the top talent and bump up their pay to $125,000 per year? You raise your pay to ensure your edge in recruiting continues - $145,000 per year. What happens when the other firms catch on to the fact that you're getting the top talent and bump up their pay to $145,000 per year? You raise your pay to ensure your edge in recruiting continues - $160,000 per year.

TL;DR Version: The principles of supply and demand don't exist in a vacuum, and law firms are businesses that compete with each other for clients and attorneys. Welcome to 1995-2007. NY to 190!!!!1!1one!

[General Tso]

Exactly. The firms have always been competing for a very small group of top students, and have paid outrageous salaries, arranged posh summers, etc to get them. Meanwhile, a much larger pool of slightly less top students has benefitted from it by coming along for the ride. The second group has shrunk recently, but firms are still competing for the first group, and anything that hurts an individual firms chances at that group (like paying less) isn't going to be considered.

What is a "top student" and why don't they exist in other countries?

[JG Hall]

there aren't law schools in other countries...

[James Bond]

there aren't law schools in other countries...

*facepalm*

[JG Hall]

there aren't law schools in other countries...

*facepalm*

what? it's an undergraduate education, not a graduate school. American exceptionalism, woot woot.

[James Bond]

there aren't law schools in other countries...

*facepalm*

what? it's an undergraduate education, not a graduate school. American exceptionalism, woot woot.

So you'd put money on the idea that there are no graduate-level law schools in any other country except America? How much money we talking here?

[AreJay711]

The problem is that the firms that still pay 160K would get ALL of the most talented graduates and firms get business because they attract the best talent. Plus, 80 dollars an hour isn't that much all things considering; I got union scale at $42 / hour doing construction in DC with a high school degree optional.

[RVP11]

Why DO firms feel the need to pay $160,000+ for unproven talent? Why not hire twice as many lawyers straight out of school, pay them 40k per year, and keep only the ones who show the most promise in those two years? That way the firm gets the better attorney and the client doesn't pay through the nose to train attorneys.

Because we'll label the first firms to do this "TTT," and they won't get any top talent for the rest of eternity.

It's a prisoner's dilemma. If a firm wants to keep getting median from X and Law Review from Y, they're not going to break stride. Any real change would take widespread cooperation among private firms, which is never going to happen.

I agree this would be a positive change in the legal profession. But if I were a managing partner I'd never let it happen at my firm. I'd be waiting for all the other firms in the country to act first, and they'd all be doing the same.

[RVP11]

Historically there may have been a high degree of competition for T14 students, but that is no longer the case today.

There still is plenty of competition for these students. Virtually every top quarter person at T14 has multiple offers to choose from. What would you pick between a guaranteed $160k and $40k for two years and the uncertainty of a permanent position?

[Renzo]

there aren't law schools in other countries...

*facepalm*

what? it's an undergraduate education, not a graduate school. American exceptionalism, woot woot.

So you'd put money on the idea that there are no graduate-level law schools in any other country except America? How much money we talking here?

I think they mean that a graduate degree is not necessary. Not that it doesn't exist.

[James Bond]

The idea that I am unaware of how law works in England is as ridiculous as the idea that graduate level law schools don't exist outside of America.

Not even getting into more complex situations in countries, both Canada and Australia have law schools.