Aiming for Small Firms Forum

[Hipster but Athletic]

How do you not get this? Even at a larger firm that pays $130K or more, you'll bill 1950 or more hours at around $300 or so per hour. That only takes about 434 hours to make your salary. The firm has to pay for stuff, the partners have to make money....it's the way the world works.

I'm well compensated for my work, and the partners at my firm are even more well compensated. They are the partners, they run the firm, it's their name on the door. They have loads of experience, and I'm learning a ton from them. Why shouldn't they make more money, or specifically make money off of me? They didn't bring me in to just to look pretty, they brought me in to ease their workload and bill hours to make money for the firm. If you work for a firm, until your name is first on the door, someone is always going to make more money than you, and likely off the work they are asking you to do.

If you have trouble with that concept, then don't be an attorney.

I don't understand the binomial distribution of the labor market. The way normal equilibriums are established is at margins. So what the next best available law grad would take. It would seem that the big law firms pay about what they need to in order to get their pick of candidates while still turning big profits. I don't really get where the divide comes in. If the smaller firm is able to still turn a massive profit and can hire kids that are perceived to be just as good, then they could advertise a discounted billing rate for the same product.

[Hipster but Athletic]

Undeniably, asymmetric information, risk aversion (can't lose litigation!) and strange obsessions of prestige distort the market, but it seems too fucked to me to make sense of.

[kalvano]

How do you not get this? Even at a larger firm that pays $130K or more, you'll bill 1950 or more hours at around $300 or so per hour. That only takes about 434 hours to make your salary. The firm has to pay for stuff, the partners have to make money....it's the way the world works.

I'm well compensated for my work, and the partners at my firm are even more well compensated. They are the partners, they run the firm, it's their name on the door. They have loads of experience, and I'm learning a ton from them. Why shouldn't they make more money, or specifically make money off of me? They didn't bring me in to just to look pretty, they brought me in to ease their workload and bill hours to make money for the firm. If you work for a firm, until your name is first on the door, someone is always going to make more money than you, and likely off the work they are asking you to do.

If you have trouble with that concept, then don't be an attorney.

I don't understand the binomial distribution of the labor market. The way normal equilibriums are established is at margins. So what the next best available law grad would take. It would seem that the big law firms pay about what they need to in order to get their pick of candidates while still turning big profits. I don't really get where the divide comes in. If the smaller firm is able to still turn a massive profit and can hire kids that are perceived to be just as good, then they could advertise a discounted billing rate for the same product.

Undeniably, asymmetric information, risk aversion (can't lose litigation!) and strange obsessions of prestige distort the market, but it seems too fucked to me to make sense of.

What in the fuck are you babbling about? Management makes more than labor. When I've been on the job 15 years and am the go-to attorney for my area, then I'll make more than a junior associate.

[Hipster but Athletic]

Cool analysis. Maybe you shouldn't be a lawyer if you're so unwilling to question the nature of things.

[kalvano]

Absolutely. Let me give up my enjoyable 6-figure job with awesome benefits because the guy who took the risk in starting the firm and is an expert in the area makes more money than me.

Sounds like a winning plan.

[Hipster but Athletic]

Oh you just can't read. Ya I didn't suggest you should be making close to what partners do. But if billing $270, you should be more than 80. Seems like you are making more than 80 though and just wanted to be a tough guy in this thread rather than to even read what I wrote.

[Hipster but Athletic]

Also I think it's worth noting that this is a thread called "aiming for small firms" not "biglaw strikeouts trying for anything." I think it's worth noting that the traditional case is the latter and that helps to explain why your salary as a pct'ge of your rake is much smaller in small firms. If you're aiming for small firms with big firm credentials I think it makes sense to try to get a bigger cut of your rake.

[A. Nony Mouse]

But firms aren't likely to pay someone significantly more than they're already paying their associates just because a "big law qualified" associate comes along and wants to work for them.

[twenty]

Are there some practice areas that attract substantially higher billing rates than others? I'd imagine crim defense would be on the low end, but not exactly sure what the "high end" of small law practice looks like.

still not entirely dissuaded from the work 3-4 years -> solo firm route and looking for someone to explain to me why this is an awful idea.

[Hipster but Athletic]

But if they only hired big law qualified 1st years then maybe that firm pays more? So maybe target small firms that look to have mostly t-14 with honors lawyers.

[Hipster but Athletic]

Are there some practice areas that attract substantially higher billing rates than others? I'd imagine crim defense would be on the low end, but not exactly sure what the "high end" of small law practice looks like.

still not entirely dissuaded from the work 3-4 years -> solo firm route and looking for someone to explain to me why this is an awful idea.

I had lunch with a solo litigator who left big patent lit after like 15 years and he said the problem is the work/pay can come in waves. You'll hit rough spots or your clients will wait till the end of their FY to pay and so you have to be real good about managing your money. He talked about cash value of life insurance and credit cards Obviously a bigger deal when you have a family etc.

[kalvano]

Oh you just can't read. Ya I didn't suggest you should be making close to what partners do. But if billing $270, you should be more than 80. Seems like you are making more than 80 though and just wanted to be a tough guy in this thread rather than to even read what I wrote.

I read what you wrote. Aside from not making much sense, it's naive at best. You're suggesting that there should be some correlation between what the firm bills you at and what they pay you. The two aren't related. Billing rate is related to experience and what the market in that practice area will bear. Salary is whatever the firm is comfortable paying an associate.

Honestly, my firm could knock 25% off what I make and still have people lining up to get a job. And, as I said, there are other considerations besides base salary. For instance, I could work from home tomorrow if I wanted to because reasons. I didn't get in to work until 10:00 today and left around 6:00 still. I can't quantify that in a dollar amount, but it's worth a hell of a lot to me.

[TheGreatFish]

But if they only hired big law qualified 1st years then maybe that firm pays more? So maybe target small firms that look to have mostly t-14 with honors lawyers.

Small firms typically look for ability over a prestigious background. A big firm wants those t-14 grads to justify the billing rate, but in practice most of those associates will probably be rummaging through boxes of documents for the first year or two. The ability of the associate isn't a huge factor. During those first few years, the partners will figure out which associates have the skills necessary to handle the important work.

At a small firm associates aren't there to bill hours. They're in the firm because the partners don't have time to handle all the work themselves, so a new associate needs the ability to handle substantive legal work on the first day.