Referencing the announcement that Sullivan & Cromwell will raise starting salaries for newly minted attorneys by $20,000, to $145,000 (plus bonus), Wall Street Journal writer Cameron Stracher writes a provocative article called Cut My Salary, Please! (on line subscription required). Cameron Stracher, author of “Double Billing: A Young Lawyer’s Tale of Greed, Sex, Lies, and the Pursuit of a Swivel Chair” (William Morrow, 1998), says “Corporate law firms are, essentially, giant pyramid schemes ” “Corporate law firms are, essentially, giant pyramid schemes ” He goes on to say:
But what makes economic sense to the firms makes less sense for young lawyers. For one thing, each salary increase has been accompanied with a corresponding increase in billable minimums. When I started practicing, lawyers were expected to bill around 1,800 hours a year. These days, it’s about 2,200. Those 400 extra billable hours translate to about 600 more hours at work, or approximately two to three more hours in the office each day. Even at 1,800 hours I worked until nine at night, and most weekends. At 2,200 hours, a lawyer might as well move a cot into his office.
Before concluding he suggests that:
Tomorrow, law firms should cut starting salaries by 50%
You’ll have to read the full article to analyze his reasoning. My Opinion: During the dot com boom I recall participating in a round table in San Francisco where we discussed the then ridiculous increases in associate salaries. I understand the free market mechanisms that drive firms to compete for talent. I said then and I will say it again that salaries alone do not buy you motivation, commitment, drive and the desired peak performance. They buy you compliance with extremely high billable hour targets. I believe the long term winners have to be competitive in their salaries but also must learn how to enhance the satisfaction of both lawyers and the clients they serve.