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Oh, Biglaw: Why Pay $60k for Lawyers to Do Non-Profit Work When You Could Pay Them To Build A Lucrative Practice?

by Carolyn Elefant on February 20, 2009 · 9 comments

in Biglaw Practice and Issues, Biglaw to Solo, Reasons to Solo

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Update – please see the comments, as they are very informative.  I think perhaps my position may be too extreme – funding a couple of non-profit positions or funding indigent criminal defense prgrams may not, on further reflection, be a bad idea (although in many instances, solo and small firm lawyers handle these kinds of matters as well and could actually afford to take those cases with a $60k investment). But in the long run, if firms are to thrive, they should also explore ways to diversify their investment, they should explore other options such as funding smaller firms, thereby planting seeds for growth down the line.

Believe me, this is a post that I hate to write as I’m loathe to criticize a big law firm like Simpson, Thacher that is desperately trying to do the right thing to mitigate the hardship of associate layoffs by paying associates $60,000 to work at a nonprofit for a year.  Still, I can’t contain myself, because while it’s a magnanimous act, business wise, it’s also a stupid idea.  Instead of paying associates to work for non-profits and develop skills that they may not ever be able to use if they return to the firm, why not, as I’ve previously suggested, use that money to help displaced associates set up their own practice and then outsource innovation to them.

In case law firms have been sleeping, the President just signed the American Recovery and Reinvestment Act of 2009 into law, which is chock full of $787 billion worth of goodies designed to stimulate a industries like energy, education and health care.  And on its heels, it’s likely that we’ll see a $75 billion mortgage rescue package that will inject new life into the real estate industry.  If it works as intended, the stimulus package will create new industries, which will need legal representation to guide them through unchartered practice areas.

Sixty thousand dollars is chump to change to law firm associates accustomed to earning $160,000.  But to a lawyer seeking to start a practice, a $60k nest egg is an utter godsend.  Instead of working for a non-profit, a lawyer could (as I have  here) start a trade association to represent the myriad of new interest an industry groups bound to crop up as a result of the stimulus legislation.  After a year or two, the associate would be positioned as an expert in a hot new area, and could bring a lucrative practice to his or her former firm.  And even while delving into new areas, lawyers could still fulfill a civic duty by taking on court appointed work, consumer credit or bankruptcy cases as part of their practice – so the law firm could feel as if it contributed to the public good.  Best of all, during their year or two as free agents, associates would learn how to market themselves and run a business, thus getting the training that they need to help their firm move forward upon their return.

Of course, who can blame biglaw?  After all, law schools raise graduates to believe that the legal profession offers three options:  biglaw, government and non-profit/legal aid work.  Even with all of the consciousness raising by the solo/start a practice genre of blogs like this one, or this or this or this, that option of hanging a shingle completely eludes our profession’s collective radar.  And if this major crisis doesn’t change these attitudes quickly, then honestly, I’m not sure what will.

  • Wade

    With all due respect, Carolyn, wouldn’t your solution create an inherent competitive conflict for the large law firm? Why would a law firm want to help fund its former associates to start their own practices, when these new firms have serious potential to draw away clients? In essence, the $60,000 serves in part as a non-compete payment to the associate. While I am all for large law firms to support their associates impacted by the economic crisis, I don’t think that the large firms shooting themselves in the foot is a good idea.

  • MJB

    In a climate where foreclosures are happing at a rate of one in every 13 seconds (6,600 new foreclosures a day) and nonprofit legal services providers are facing unprecedented funding shortfalls (not only because of reduced donor support, as the article suggests, but also because of low interest rates), an investment in the provision of legal services for those who cannot afford them by anyone is surely not a stupid idea. As Judge Learned Hand famously said, if we are to keep our democracy, there must be one commandment: thou shalt not ration justice. While the justice system and fundamental democratic principles will likely survive without innovation and a talented pool of solo practitioners breaking new ground (as promising as those things are), they will not likely survive a lack of meaningful access to the courts for those that cannot afford a lawyer.

  • http://www.ethicsmmaven.com Eric Cooperstein

    I can think of numerous reasons for a law firm to do a great thing like this.
    1. Assists legal services at a time when both legal services and poor people are hurting more than ever.
    2. Younger associates who spent all their time doing document review will get real litigation experience in a structured, mentored setting (which will make them better able to later start their own practice if they choose to do so).
    3. Associates who have few referral sources will have a year to build a network and plan their next step.
    4. The law firm gets great press, which brings more business their way.
    5. Other law firms might follow along and also sponsor associates in the public sector.
    The only real problem I see with it is that the law firm is paying too much. $60K is way more than most starting legal services attorneys make (more than a lot of solos make) and could cause resentment of the associate by the veterans who have been living on much less and serving the poor for years (while the associate was making 2 or 3 times as much and not saving for his or her future).
    I think you’re falling into the same trap that you accuse biglaw of: assuming that every fired associate wants to be an entrepreneur and start his or her own practice. Simpson, Thatcher should be praised for coming up with such an innovative solution during this economic crisis.

  • http://67.225.230.212/~sh1ngl3 Carolyn Elefant

    Jen,
    You raise a good point. But there’s often more than enough work to go around. For example, particularly when industries are young, companies can’t afford large firms and either aggregate in trade associations or hire lawyers for small projects. Once those companies are strategically positioned, they often need a larger firm and the lawyer could refer the work back. Also, many times lawyers have other reasons to take a practice area to a large firm…perhaps to grow it bigger or to take advantage of other practice groups. The example of Tom Goldstein and his Supreme Court practice come to mind – he built a vibrant practice on his own, but eventually settled in at a large firm. Many associates will come back.
    It’s true, that investing this way is risky. But at least there’s a chance of reward. By contrast, I don’t see the same return coming from sending lawyers to nonprofits.

  • Wade

    It’s actually Wade, not Jen (my email address starts with part of my last name). But I’ve been called much worse ;-)
    If you don’t mind a totally unrelated, much less serious comment… I followed this from your Twitter feed and have to ask as a Wheaten Terrier owner: is the dog in your avatar photo there a Wheaten, or at least part Wheaten?

  • http://67.225.230.212/~sh1ngl3 Carolyn Elefant

    Eric, you make a good point and I guess that I would not take issue with firms funding a few non-profit positions or perhaps having lawyers trained to handle court appointed criminal cases since public funding for indigent defense is suffering.
    However, it’s not clear what kinds of non-profits would get funding – would it be those handling foreclosures, or those groups handling “impact” cases that pursue important issues, but don’t necessarily help the poor. Second, solo practice and public good are not mutually exclusive. Lawyers with virtual practices and those who handle court appointed cases help the poor – and sometimes, there are even fee statutes so lawyers could do well by doing good. The $60k income is generous enough that a lawyer could start a firm and explore money making opportunities AND do some pro bono also.

  • LaToya

    As a legal aid attorney, I applaud big law for their contributions. My salary is no where near 60K, but I would accept any help that I could get! Too often legal aid is used as a “jump off” for young attorneys to learn the basic skills and then migrate to small or medium firms, or to enter solo practice. Although most of the managers where I work came to legal service at the end of their careers to “retire”, the turnover rate is still extremely high. Without dedicated lawyers, the clients suffer.
    Poor clients cannot afford to pay retainers. Although they are grateful for a lawyer’s pro bono assistance, far too often pro bono lawyers only want cases that are not contested, and have a short time requirement. Poor clients need advocate for all cases. Not just the ones that are easy and can be done quickly. They have contested matters that require YEARS to resolve. (I have been working for legal services for two years, and still have a civil case that I inherited my first day on the job! It is against a large firm who tried to bury me in motions!) I don’t know of any solo attorney that would dedicate 5-10 hours a week working on a pro bono case that could last for YEARS.
    As a final point, no one in the legal profession can deny that having money provides greater access to the justice system. A poor client has little to no chance in the justice system when he/she does not have the resources to battle opposing parties in a civil action. I have personally seen complex custody cases where one party has the resources to hire a “top name” attorney and the other is dirt poor. The financially able party simply wants the children so that he/she can claim them on their taxes and/or doesn’t want to pay child support. The poor party is barely making ends meet, but provides a stable supportive home for the children. Without legal aid, the poor party would have an extremely difficult time showing the judge that there has been no material change in circumstances that would warrant a change in custody. I have seen cases just like this that no pro bono lawyer wants to get involved with because it’s contested and will take too much time to resolve.
    I have seen disabled clients who have tried to get an attorney to help them get on SSI, but because there is “no money in it” no attorney wants to volunteer their time to help. There are countless situations that I could give examples of, but I am sure you all get the point.
    Fresh out of law school, most young attorneys have bills that need to be paid. They want a job that pays more than legal aid can offer. Most don’t even consider taking a legal aid job due to the pay. However, as other posters have said, their is more than enough work to go around. Maybe the young lawyers are too afraid to go solo. Fresh out of law school I was too scared, even though I really wanted to. Even now, with today’s economy branching out on my own is too big of a risk. I would have to leave a job with health benefits, that pays the fees to upkeep my license, and provides a stable (although low) paycheck in order to go solo. I have to think about my family, and my financial situation. I am not giving up on my dream, I simply have to continue saving in order to go solo.
    If big law is going to pay attorneys a livable wage to work for legal aid I congratulate big law. They finally have done something that makes sense! It sure would help some of my friends who when to big law right out of law school and were recently laid off. Most of them don’t have any practical experience. They don’t know where to start rainmaking, or what to do once the client pays the fees. I am sure they would jump at the chance to make 60K to work for legal aid. They will get some real world experience, and the benefit of learning from lawyers who have been around the block but have come to legal service to retire.

  • http://vaesq.blogspot.com Virginia Esq

    I couldn’t disagree more with your premise that large law firms fund associates in starting their own firms rather than fund legal aid or pro bono work. It completely overlooks the benefits and unique experience gained by those who do the work and the benefit to the clients and society as a whole.
    Please read my recent post on this matter, “Why Consider Pro Bono?”

  • http://www.rainmakervt.com Mike O’Horo

    I just stumbled across this pearl. I’m curious: Four years later, do you see any movement in the direction you suggested?

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