Biglaw is a rip-off

Everybody in law school lowers their voice and talks in reverent tones normally reserved for religious practices when the topic of working in Biglaw comes up. Visions of sugar plums dance in their head. Money! Power! A condo in the city! Plus you have to consider that most law grads are coming out of school with at least $100,000 in student loan debt. They really need a great job in order to make the $1,500 monthly loan payment. By 2015 the debt is expected to be more than $200,000.

So, now you can see why working for one of the big name Biglaw firms is the Holy Grail of every wannabe lawyer, assuming they are in the 85% of law grads getting jobs at all which is the lowest number since 1994.

One of those jobs is also just as unobtainable as the Holy Grail. Unless, of course, you’re ranked in the top five or so percent of your graduating class. In which case, you might just have a shot at stardom and an office with a window overlooking a nice park in the city. It sure sounds like the dream job for every smart and freshly graduated law student, doesn’t it.

But do you want to know the dirty little secret of Biglaw? It’s a ripoff for at least the first 20 years. After that you can really make big money if you survived your first heart attack and your diabetes is in check and they actually brought you in as a partner. No guarantee you ever make partner, though. The new trend is to keep associates churning for years and never extend a partnership. But let me run through the numbers for you so you can truly see why it’s a complete scam:

Starting salaries are not $160,0000 a year in Biglaw

There are crazy numbers floating around about the huge salaries at Biglaw for brand new first year associates. It was supposedly $160,000 a couple of years ago but reportedly the top few Biglaw firms are now paying $145,000 on average. Not too many of those jobs though. In fact Forbes recently reported that only twelve law schools in the country reported a starting salary in private sector jobs (the highest paying kind) of more than $100,000 and the true average salary is actually $77,200.

According to a report in the New York Times, the mean salary for the top-tier of law jobs is $78,653. Read it by clicking here. The median salary for all new hires at private sector legal jobs is only $60,000 according to the Association for Legal Career Professionals.

For the purposes of doing the math below, lets assume you are a top grad from your good law school and you score the best job available and get paid $85,000 a year which is more than the national median average salary. Just for kicks, lets assume your friend who was ranked right below you as #2 in your graduating class went to a Biglaw firm in New York City and makes $145,000 a year. Sounds like a lot of money for you two, right?

Average billable hourly requirements are huge

Most Biglaw firms force associates to turn in at least 1,800 billable hours a year or they get laid off. The national average billable hour requirement is closer to 1,900 a year and it’s reported in various sources that many Biglaw firms in cities like New York where your friend works require 2,000 hours a year or even 2,100 hours. But for the purposes of our numbers lets assume you and your friend are required to turn in 1,800 billable hours which breaks down like this:

1,800 hours divided by 52 weeks a year  =  34 hours a week or 7 billable hours a day on average.

But the truth is that you are going to be forced to take some days off during the year. For example, your family will drag you away from the office on Christmas morning or for a Hanukkah celebration and then of course for the 4th of July and maybe a few hours on your birthday. The office itself probably shuts down for a couple of holidays like Labor Day and Memorial Day. And every lawyer is required to attend continuing legal education seminars that are scheduled during the work week. So count on being away from your desk for probably another ten or so days each year for those things. Plus you have to expect to get the flu once during the year even if you get the flu shot.

With all those days you can’t work, it’s probably more likely that you are going to have to turn in about eight billable hours a day on average. Maybe even a little bit more.

OK, so eight billable hours a day to make your requirement of 1,800 billable hours. You might think eight billable hours a day is manageable since you’re probably going to be in the office from 8:00 a.m. to 6:00 p.m. or so during the week. That sort of gives you ten hours of time at your desk every day you can get there.

The problem is that you are going to be forced to do about four hours of work during the day for which you cannot bill such as:

    • An hour for lunch which you actually squeeze down to 20 minutes;
    • Two 10 minute coffee breaks that the older associates and the occasional partner force you to take with them, “just to check in and see how you are doing”;
    • The occasional restroom break to regain your sanity;
    • At least a half-hour a day reading legal updates, important firm email, and reviewing general correspondence which is mandatory and non-billable;
    • Attending the occasional required department meetings which often drag on for an hour or more for no real reason. God save you if you’re shared between two or three departments;
    • A phone call from a client upset about something. You can’t bill for that time because it would be adding insult to their perceived injury, especially if they are mad because of what they think you did – even if you did nothing. You don’t want the next call about you to go to your supervising partner;
    • A call to arrange your talk at a professional group to meet the firm’s requirement that you also put in 100 hours a year doing outside work for charities or professional organizations to make the firm look good;
    • A half hour working on that speech and emailing it around so that your firm doesn’t get sued for malpractice because of a mistake in your presentation;
    • The occasional legal secretary melt down or screw up, and then time spent training their replacement on how to do stuff until they melt down, too;
    • The occasional older associate who wants to gossip or interrupt you for no apparent reason except they need to take a break and you are the newbie associate so you can’t kick them out;
    • The birthday parties for those cranky old geezers with the huge partner offices who keep trying to buy far too many drinks for the cute young associates;
    • Attending a hearing as backup for a partner. You can’t bill for these because the partner thinks they are ‘training’ you and can’t double bill the client for two lawyers, especially since all you did was sit there watching them for the entire four hours;
    • The occasional times when you are drafted to go make coffee for the partner you work for or to carry their exhibits and stuff to the courthouse so that they are not sullied with grunt work new associates are expected to do.

and my personal favorite:

    • The times when a junior partner runs in and makes you spend three hours researching and writing up a memo on an obscure and boring legal issue. Then they realize the problem went away and your work isn’t needed. They refuse to let you bill to the client for the work you did that the client knows wasn’t needed. 

Get it? It will be a VERY rare week when you can actually bill more than six hours a day on average. Then take into account that in your first three or four months they don’t trust you with anything except writing basic research memos for which you submit three hours and they cut it down to a half hour of billable time.

So how do you make up the loss of about ten billable hours a week? Simple. You work nights and weekends. And you drag your laptop on that vacation. You work on case files when the rest of the family is drinking beer and watching the fireworks on the 4th of July. Your kids forget that you live in their house, too. Your spouse starts throwing stuff at you when you walk in, if your key even still works in the front door. Now you can see why alcoholism and divorce are so rampant in  the legal profession.

I realize this is bad enough, but it gets even more demoralizing:

Big Law makes a killing off killing new associates

If your salary is $85,000 a year and it is divided by 1,800 billable hours, you get paid $47.22 an hour. Your friend makes $80.55 an hour, assuming she survived the whole first year. That sounds better than making $20 an hour as a plumber, I suppose.

But what did your firms bill out (Click here to see the 2012 billable hour survey from Law.com)?

For you, 1,800 hours times the average $217 an hour = $390,600. Subtract your salary of $85,000 and the firm makes $305,600 in profit off your work. If they brought in you and three other associates they earned a cool $1.2 million in profit just for giving the four of you the opportunity to work yourselves to death on nights and weekends.

It’s even better for your friend: 1,800 hours times the average of $447 an hour = $804,600. Subtract her salary and the profit is $659,600. Four associates at that firm and the profit is $2.64 million dollars. Supposedly Biglaw firms hire enough new associates that maybe ten survive the year. So if ten make it through the year at your friend’s firm, their business makes $6.59 million in profit.

The worst part is that those Biglaw partners sound so piously generous when they throw you a $7,500 bonus at the end of the year. They act like it came out of their own pocket or something.

-Samuel Owen

© Samuel Owen 2012. All rights reserved. Please read important notices and disclaimers by clicking here.
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Author: Samuel Owen

This is my Lawyer Rant. I've put up with new associates trying to kill me, clients being dangerous idiots, and Judges being rude for far too long. It's time for me to tell it like it really is, and it feels good to give back.

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