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Aren't most making like 1/10 of what they're getting billed at

They're wildly overpaid. Top 25% at Loyola Chicago could hack it just fine at Sidley and would do the job for half as much.

DELG wrote:Aren't most making like 1/10 of what they're getting billed at

Maybe. Maybe not. But definitely not for that reason.

My summer firm claimed they didn't break even on first years until they billed more than 1400 hours. Fun with accounting.

Associates don't even make money for the firm until their third year. Hell ITE that might as well be 6th year as client's progressively refuse to pay for any junior associate time. Partners are doing associates a big favor by even employing them but that's the nature of the apprentice system. Market should be closer to 100k.

2014 wrote:Associates don't even make money for the firm until their third year. Hell ITE that might as well be 6th year as client's progressively refuse to pay for any junior associate time. Partners are doing associates a big favor by even employing them but that's the nature of the apprentice system. Market should be closer to 100k.

That is such bullshit, I can't believe firms convince anyone it's true.

Tiago Splitter wrote:My summer firm claimed they didn't break even on first years until they billed more than 1400 hours. Fun with accounting.

Overhead per lawyer is really significant at big firms: http://abovethelaw.com/2014/07/reinvent ... d-is-great. Stachenfeld estimates $300k per lawyer at a big firm, and even at his boutique it's $165k per lawyer. This number drops dramatically outside NYC where you're not paying $75 per square foot for rent.

If an associate bills 1,400 at say $450/hour, with 80% realization = $504k. Subtract $170k of salary and bonus, $300k of implied overhead, and a few $ for health insurance and other benefits, that's just breaking even.

Tiago Splitter wrote:My summer firm claimed they didn't break even on first years until they billed more than 1400 hours. Fun with accounting.

It's probably true if you are counting sunk recruiting costs. A summer program probably costs 50k per SA. 3L stipend 20k. OCI interview process ~10-20k.

but I'd imagine most first years are a net positive starting on week 2 of their job.

rayiner wrote:They're wildly overpaid. Top 25% at Loyola Chicago could hack it just fine at Sidley and would do the job for half as much.

Back when Juniors would doc review for most of their first few years, sure. But now that clients don't pay for that shit, at least 70% of the work I do is pretty hard stuff.

DELG wrote:

2014 wrote:Associates don't even make money for the firm until their third year. Hell ITE that might as well be 6th year as client's progressively refuse to pay for any junior associate time. Partners are doing associates a big favor by even employing them but that's the nature of the apprentice system. Market should be closer to 100k.

That is such bullshit, I can't believe firms convince anyone it's true.

total bs. think about it this way - partners bill less hours than associates (or the same, but usually not more) and their hourly rate is about 2.5/3x more than associates but they make 10x more ...

The associate billing rate reflects the high level mentorship they receive from the partner so you should really discount it a bit and attribute that to the partner.

2014 wrote:The associate billing rate reflects the high level mentorship they receive from the partner so you should really discount it a bit and attribute that to the partner.

If you are trolling 180.

But there is something to that.

Huge supply of qualified individuals who will take a biglaw job + Limited demand for biglaw associates = starting salaries that haven't moved in 7 years.

The only 2 reasons salaries haven't dropped: (1) nobody wants to be known as the firm that made salary cuts and (2) employees get pissed.

Biglaw associates are not overpaid. They are underpaid.

2014 wrote:The associate billing rate reflects the high level mentorship they receive from the partner so you should really discount it a bit and attribute that to the partner.

lol

I think this may be the first year since 2007 that biglaw associates are paid close to exactly what they should be paid. Hours at my firm and a few others I know of seem to be significantly higher than last year.

The problem is that every firm follows pay increases. Why should Cravath go to 180 when Schutle will match anyway.

Biglaw associates are incredibly overpaid. I refuse to believe any fresh grad is worth 160k plus all the other costs.

Hell, one of the top 5 firms in my market dropped 1st year pay below 100k. I can't blame them.

minnbills wrote:Biglaw associates are incredibly overpaid. I refuse to believe any fresh grad is worth 160k plus all the other costs.

Hell, one of the top 5 firms in my market dropped 1st year pay below 100k. I can't blame them.

what flyover market is this

mephistopheles wrote:

minnbills wrote:Biglaw associates are incredibly overpaid. I refuse to believe any fresh grad is worth 160k plus all the other costs.

Hell, one of the top 5 firms in my market dropped 1st year pay below 100k. I can't blame them.

what flyover market is this

Minneapolis

minnbills wrote:Biglaw associates are incredibly overpaid. I refuse to believe any fresh grad is worth 160k plus all the other costs.

Hell, one of the top 5 firms in my market dropped 1st year pay below 100k. I can't blame them.

If someone is willing to pay 450 an hour for my work, who am I to argue. I just want a better taste.

Desert Fox wrote:

minnbills wrote:Biglaw associates are incredibly overpaid. I refuse to believe any fresh grad is worth 160k plus all the other costs.

Hell, one of the top 5 firms in my market dropped 1st year pay below 100k. I can't blame them.

If someone is willing to pay 450 an hour for my work, who am I to argue. I just want a better taste.

True. Of course, if clients actually knew how many people would work for much less, this whole scheme would collapse pretty quickly.

If a firm makes a profit, and want to say that associates are underpaid your reasoning is that partners are overpaid.

If you want to say associates are overpaid, and a firm makes a profit, you have to say partners are underpaid. (And this is because loyola grad would do this job for 100k, etc. etc. so all this money is really because of the partner so they deserve more)



The only way out of picking from what most of you would say are two evils (maybe not?) is saying firms charge too much for their service. Probably true, but that's a pretty uninteresting position to have. (Lawyers charge too much money seems to be an age old complaint)

minnbills wrote:

Desert Fox wrote:

minnbills wrote:Biglaw associates are incredibly overpaid. I refuse to believe any fresh grad is worth 160k plus all the other costs.

Hell, one of the top 5 firms in my market dropped 1st year pay below 100k. I can't blame them.

If someone is willing to pay 450 an hour for my work, who am I to argue. I just want a better taste.

True. Of course, if clients actually knew how many people would work for much less, this whole scheme would collapse pretty quickly.

I still don't think you are going to find that many replacements for biglawyers.

You guys are saying the firm breaks even after 1400 hours as if that's an argument against paying associates more? That basically means everything you bill after like July or August is pure profit for the firm. If true that stat makes me feel way underpaid.

rayiner wrote:They're wildly overpaid. Top 25% at Loyola Chicago could hack it just fine at Sidley and would do the job for half as much.

DELG wrote:Aren't most making like 1/10 of what they're getting billed at

Did you two sit next to each other and agree to start this thread, or are we settling a dinnertime debate?

FWIW I think 1st year associates are probably overpaid, after that less so.