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.