Big Law Raises and the Impact on Young Lawyers

It is a frenzy, and the lawyer websites are full of it. EVERY SINGLE DAY.

Big Law is going crazy with raising salaries for associates and luring lateral hires with Big Money and flexible terms. That includes unprecedented starting salaries and finder’s fees for additional lawyers lateral hires can help lure over. It also includes terms which allow new hires to work exclusively from home or remotely — even from other geographic locations.

Sounds good, right. All that money. All the flexibility. It is very tempting to young lawyers, especially those with huge student loan debt hanging over their heads, and I totally get it. Take advantage of the moment.

But I hope that the young lawyers who are caught up in this hiring frenzy will be strategic once they become firm members. I hope that they will look at firm policies and programs, billable hour requirements, and cultures to determine whether it is a good place to develop a career and also to have a balanced lifestyle. I hope they will remember that a job is different from a career. Careers includes mentoring, leadership training, exposure to clients, reasonable and equitable opportunities for upward mobility, respect for families … and the list goes on and on.

Time will tell how this hiring frenzy pans out in terms of talent retention. My gut tells me that the firms are seizing the day to be competitive and that maybe they are not as committed to creating opportunities and building careers for all these seats they are filling to continue the record profits they reported in 2020.

That is a lot to think about. Keep up your contacts outside the firm for that rainy day that may be in your future. Some times things are not exactly as they first appear.

Career Counselors, Law Firm Managers, Law School Educators, Law Students, Lifestyle, Practice Advice, Pre-law, Young Lawyer | Comment

Beware of Ransomware

We read about it in the newspapers and on TV, but we think it never can happen to us. But it can. Hackers demanding ransom are not just fishing for big fish like corporations and big businesses. They also are fishing for the little guys, who they can shake down and score on.

It has happened to friends and colleagues, and it has happened to me. The solutions are complicated, anxiety creating and expensive.

Computer thieves come at you in conniving ways, they gain your trust, and they wear you down until you make even the smallest mistake. Then they are into your computer and poised to make your life miserable and put your resources at risk.

Do not give strangers your personal information. Do not share screens with strangers. Do not trust what strangers are telling you in e-mails, on the Internet or in any other way that will allow them access to your personal information. Including your bank accounts. And your investment portfolio. And your credit card accounts. And your Social Security information. And the list goes on and on and on.

Clean up your computer so that, if you do get hacked, you are not as vulnerable as you may be at this time. Paper files worked just fine in the day, and they can work just fine now. You owe it to yourself and all those people you communicate with through your computer who do not want to become part of the problem.

Many of you are in large law firms and government agencies where training on computer security issues is standard, frequent, and required. So it is a little easier for you to be tech savvy. But just as many of you are in small firms and businesses where you do not have the luxury of that kind of training. For you, it is trial and error. And the errors can be very costly.

So, be smart. Be cautious. Be secure.

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Thought For The Week: “Of all the paths you take in life, make sure that a few of them are dirt.” John Muir

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When A Benefit Is Not Really a Benefit

A law firm employment benefit is something of value that is conferred on or available to an employee or firm member by an employer and is a term of employment — either at the beginning of employment or added at a later date. It typically is something that the employee or firm member otherwise could only get or would have to pay more for.

Think health insurance. Although the employee or firm member has to pay the health insurance premiums, the employee or firm member typically is part of a large group and, therefore, “benefits” from lower premiums than if that employee or firm member went out and shopped other healthcare plans.

Also think flexible work schedules. No one but your employer can give that to you, and it can confer a huge amount of value to an individual employee or firm member.

An article earlier this year in Above the Law announced a new “benefit” from a top Big Law firm. Here is how the benefit was described:

It’s now easier for those at the firm to save for future education costs. The firm recently announced a new benefit for employees, a 529 College Savings Plan which allows folks to start saving for those educational expenses through automatic payroll deductions.

Sounds good. But wait a minute. Is it really a “benefit”?

529 education savings plans are ubiquitous and are available through many state-sponsored programs. If you are not familiar with these plans, which are named for the section of the IRS code that enables them, you should Google it. People in all walks of life and varied circumstances are able to participate in these plans through their state governments.

So, unless I am mistaken, the “benefit” announced by this Big Law firm, a program that employees and firm members can use to save for their kids’ educations, provides nothing more than what employees and firm members already have available through similar programs. And any “benefit” conferred is simply an automatic payroll deduction. Not much of a benefit in the large scheme of things.

Do your homework. Get savvy. Do not be fooled by things that are labeled “benefits” and do not confer true value to you. And for sure do not accept those things in lieu of compensation. It is not apples for apples.

Labeling things as “benefits” can be a shell game, and you do not want to play.

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Two Ways to Look At End-of-Year Bonuses

End of year bonuses for associate lawyers are at an all time high right now. Many firms, mostly Biglaw, are celebrating what has been referred to as “stunning” profits in 2020 and sharing the largesse with associate lawyers in the form of bonuses. Some of those bonuses are far in excess of $25K, paid out in increments, and additional money is being thrown at newly hired laterals, who are able to introduce the firm to other interested and highly-credentialed associate lawyers who then also become lateral hires. One of the Biglaw firms reportedly is valuing that effort to the tune of $50K as a type of finder’s fee.

It is all part of a current war for talent and the resulting hiring frenzy at law firms. If this sounds like good news to young lawyers, I am not surprised. That kind of money gets everyone’s attention, especially associate lawyers with law school debt hanging over their heads.

But, I encourage you to see it for what it is. This is not just the generosity of law firms. This also is a way to keep associates at the firms where they are highly leveraged and producing significant income for the firms. There is an expectation at law firms that the high billables among associates during 2020 can be repeated again in 2021, and the ching-ching sound is very appealing to law firm management.

The “golden handcuffs” of high salaries for associate lawyers has been recognized for decades. The “gold” clearly is the compensation, and the “handcuffs” represent the constraints that accompany that level of compensation in terms of the lifestyle it enables. That lifestyle can include big home mortgages, expensive club memberships, and other trappings of wealth.

But it does not have to be that way. If you are one of the recipients of the big bonuses and/or finders fees, think about how you use that money. If you spend it all on expensive cars, boats and extravagant vacations, you will find yourself unable to leave the money behind and exercise your free will in the event that the Biglaw experience does not work out for you.

Be smart. Be strategic. Plan for your future. See things for what they really are.

For more information on the two sides to this particular coin, see this article recently published on Above The Law.

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The Student Loan Forgiveness Program Works!

The substantial student loan debt that many law school graduates incur follows them a long time into their practices. It hangs over their heads like dark clouds, and it affects their life style options. Those options are not limited to expensive vacations and other choices that may seem extravagant. No, they include options for home ownership, education choices for children, and job flexibility. 

Some young lawyers have the ability to have their loans paid off by family members or other interested parties. That is indeed fortunate for them, although I always hope that those “pay-off” scenarios include leaving portions of the debt with the young lawyers. They need to have a financial stake in their futures.

But other young lawyers must look elsewhere for loan forgiveness, and the current federal program is the place to start until additional loan forgiveness becomes law — as is being promoted by the Biden administration and certain members of Congress. See this article on options for federal student loan forgiveness, and discover what might be available for you. 

The public service option for those employed by a U.S. federal, state, local, or tribal government or not-for-profit organization is a place to start for young lawyers. It is an especially good opportunity for those of you who think that you cannot take another day in private practice. Billable hours and representing the establishment do not appeal to everyone, but the high salaries keep them there. 

And for those who say it never will happen for them and that the effort for loan forgiveness is too weighty for a young lawyer with practice responsibilities, check out this success story

Is this a perfect fix? No. But hopefully you have learned by now not to sacrifice “good” on the altar of “perfect.” It is a dead end.

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Women Lawyers Have a Lot to Think About

My thoughts this week are with the women lawyers. Not only was it Mother’s Day on Sunday, a day which always leads me to thoughts about the challenges for women lawyers with young children, but it also was a week when I took a first look at the results of the new ABA study, Practicing Law in the Pandemic and Moving Forward, which surveyed 4200 ABA members (54% men and 43% women) from September 30 to October 11, 2020 and found that the pandemic has been very hard on women lawyers. Read the specifics in this article from Bloomberg News.

Most of you know the issues. Lack of childcare or complicated childcare at best. Home schooling responsibilities when schools have been closed. Space issues as you and a mate both are working at home. And the list goes on.

But knowing the issues is different than knowing what you will do about it. And most of you know that Zoom is not the panacea. Even though it has been heralded as a benefit, it is hardly the answer to all workplace woes. Most people are zoomed out by this time.

As detailed in the Bloomberg News article, a McKinsey report on women in the workplace concludes that a third of women in the workforce with small children are contemplating scaling back on their careers or quitting entirely. That is of great concern.

So, before you join those ranks and do something precipitous and unwise, think about how you can change things in your practice and at your workplace. Discussions about flexible hours, working from home opportunities, and part-time pathways to partnership that will accommodate you and your employer are important to improving the legal profession for women lawyers.

Women want to see law firms invest in them, and law firms want to see women take realistic views of what the practice of law means. Although there are arguments to be made that face time all of the time is not necessary, the legal profession has operated on that basis for the last two hundred years. It is better to negotiate working from home part of the time if you really want to be successful.

I understand that billing hours in sweats is comfortable and low maintenance, but it is not “the fix”. It is far more likely that reasonable compromise will get you where you need to be if making mortgage payments and educating your children are important goals in your life.

In some cases it IS all about money and financial security. Finding a way to meet those goals and also have a satisfying career is the challenge.

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Thought For The Week: “Youth fades; love droops; the leaves of friendship fall; a mother’s secret hope outlives these all.” Oliver Wendell Holmes

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