Client Salaries Stagnating; Associates Getting Frozen Out; Who’s Making All The Money?

Client, remembering meeting that highly personable, well-established trial lawyer on your recent trip to the law firm? The one with the corner office and custom suit? He’s not in his office today because there is no other new client seeking a law firm to hire and he has no intention of working on your matter. Did you call the team of lawyers you ended up with? Could they answer any of your questions directly or did they need to “check with someone (i.e. senior partner)” before answering your question?

This week’s news reported that in-house counsel salaries over the past two years have frozen yet the companies are requiring those counsel to take on more work. This week’s news reported that one BigLaw firm, Reed Smith cut the pay of first year lawyers, the very crop of talent they expect to make their margins on in two to three years.  I have yet to see a story where any BigLaw or other firm announced hourly fee cuts or even freezes on rates for the coming year to ease the burdens on clients.

What is the irony and similarity in these stories? The people working the hardest have the most to do and are being paid the least amount of money. This inequity can only result in the following: exhaustion, burnout, fatigue, illness, lack of motivation and the overwhelming feeling that there is no way out.

Why do I paint such a bleak picture? Because I have seen too many clients think they are selecting the best counsel only to have the work land back in their lap along with legal bills that are far too high for the value transferred to the company. The law firm always rolls out the A team to land the business. Rarely does the client meet the team let alone meet the person/partner (maybe) who will lead the team. Rarely is the client even told it will take a team of up to ten attorneys, meeting together at least one hour per day, to stay abreast of the legal matter.

How do you put a stop to this? Ask a few questions during the hiring process, assuming you have been given any control over this process, before the legal engagement begins:

1. Who will lead this case from start to finish? What percentage of time do you expect the leader to put in?

2. What is the trial experience of that person? Number of trials as lead lawyer, to a conclusion, the result and the offer and demand headed into trial.

3. How many assistant lawyers or paralegals should be expected to be assigned to this matter and who are they (ask for resumes). Make sure the bill contains only their names and not other strangers. How many meetings and when are they likely to be held to advance the matter?

4. Does the firm bill in minimums? For example, it is highly common to read BigLaw bills where a paralegal bills 8 hours a day for managing the case file. What this means, how many documents are processed and how it advances the legal status of the case is anyone’s guess.

5. What is the overall case plan based on what little is known at the outset? What is the estimated budget for that plan? What variables could affect that budget? How many first and second year lawyers will be part of the plan?

6. What work is expected/required by me, in-house counsel, to advance this legal matter to a conclusion. Estimate the hours and time frame.

What good will it do you to ask these questions? At a minimum, you will approach the matter with your eyes wide open as to what type of hit your annual budget will take and what type of hit your own personal schedule will take to support the matter. Of course, the turnkey firm that can give you personal service, from a trial partner (if it is a dispute) with a reliable budget will beat almost any other offer you hear.

In the end, you will know what you just signed on to if you hire that firm. If you pick the firm where your frat buddy works, or is nearby, or just happened to be the last firm you hired, you get what you deserve. But then again, the choice of outside counsel is not always yours to make or veto. But if costs, efficiencies and results are important, along with morale, and a balanced life, you need to be more vocal about the process. After all, if you’re in-house counsel, it’s your life that will be affected along with the outcome.

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