April 3, 2004
"In the Long Run We're All Dead"
Econ. 101 would tell us that a law firm's demand side is its clientele and its supply side is its partner and associate ranks. Unfortunately, when your supply chain consists of professionally trained human beings, there is no such thing as just-in-time inventory or production. Which can lead to transient mis-matches when a spike in client demand meets down-sized associate ranks, as evidently may be the case with these Silicon Valley firms.
The next question is whether this supply shortage will lead in the short run to higher prices, higher associate salaries, both, or neither. On this Econ. 101 provides no guidance; all it can teach is that equilibrium will reassert itself in the long run.
Posted by Bruce at April 3, 2004 10:20 AM | TrackBackPosted to Compensation | Finance | Partnership Structures Printer-friendly version
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