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Firms stagger pay for new lawyers

Firms stagger pay for new lawyers

US firms are adopting a harsher hiring regime and a new structure in the wake of tougher economic conditions and increased competition.

US law firms are adopting a new harsher hiring regime and a new structure in the wake of tougher economic conditions and increased competition.  


Firms such as Eckert Seamans Cherin & Mellott cut their graduate summer program and hiring of first year associates five years ago, much to the dismay of the industry, reports The Legal Intelligencer. 


This had led to firms moving from the pyramid model, of a few partners at the top and hordes of associates at the bottom, to a diamond shape in which several senior associates and junior partners make up the bulk in the middle in an effort to maximise value for the clients.

 

The latest example of that shift comes from Drinker Biddle & Reath, which told its incoming associates that it would pay them a lower starting salary for the first six months of the year, during which they would participate in a training program similar to a cadetship, before the salary returns to market rate at the end of the six months. 


Firm chairman, Alfred Putnam Jr., said clients are particularly averse to paying for first-year associates, and this was a way to make them more valuable. 


“The days of large law firms assigning (and clients paying for) 'armies' of very junior lawyers to large-scale litigation or transactions are over - likely never to return,” Putman wrote to associates. 


This shift in attitudes toward first-years means firms will start to bring in smaller class sizes and will look to bill a smaller proportion of associates' time, focusing instead on training. However, it means firms will have to eat the costs of the training at the start, but are in turn paying the younger associates less to help ease the pain. 

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