Big Firm Blues

The American Lawyer's annual associate (dis)satisfaction survey is now echoed across the pond, as Allen & Overy reveals its associate ranks suffered a 25% attrition rate last year and, in response, it's accelerating its exploration of an alternative career path to that of partnership—something akin to "of counsel."  The fundamental problem is simple:  It's taking longer and longer for fewer and fewer associates to make partner.  

Casting this in terms of a net present value analysis may seem cold or insensate, but I believe people (certainly people smart and accomplished enough to be A&O associates) can evaluate their careers rationally, and when the probability of a payoff is lowered and the time to its achievement increased, you don't need your HP 12C to tell you the investment you're making towards that goal just increased in cost.

Put in more human terms, here's the dilemma:

"Older partners were willing to dedicate their lives to all-night drafting sessions and mind-numbing document reviews because there was a realistic chance of claiming the partnership prize. But junior lawyers who responded to our survey now calculate the odds of partnership as a "crap shoot." And partners aren't giving their younger colleagues any incentive to work harder, associates say. Many treat their associate ranks as replaceable billing units, which are easily eliminated in a downturn, instead of as potential long-term members of the firm. "Why should we kill ourselves for you? We now know we are completely fungible," [says a WilmerHale associate]."

"Respondents to this year's survey billed an average of 2,072 hours in 2004, and reports of 2,300 or 2,400 hours were plentiful. Law firm leaders, in contrast, worked 1,800 hours or less when they ascended the ranks, say associates. American Lawyer data on associate hours would seem to agree. When we surveyed midlevels in 1986, associates reported billing only an average of 38 hours per week, 16 percent less than their counterparts today."

Given the relentless pressure on firms to boost or maintain the PPP numbers, is there anything to be done?

My honest answer is:  I desperately hope so, but I don't yet know what it is.

Consider this nascent study, just getting off the ground, being conducted jointly by the American Bar Foundation and the NALP Foundation under the direction of Joyce Sterling, a professor at University of Denver Sturm College of Law—a 10-year longitudinal career study of 5,000 lawyers who graduated in the year 2000.  Its primary finding to date:  "The malaise that new associates experience appears more acute at the large-firm level."  Specifically, associates in firms with 250 or more attorneys are the least satisfied with the nature of their work.

But wait:  The results are more powerful still.  My friend Prof. Bill Henderson of Indiana University School of Law/Bloomington, and I developed a correlation analysis based on last year's AmLaw associate satisfaction survey.  What we found is that, across the board, PPP is strongly negatively correlated with every measure of associate satisfaction—at highly statistically significant levels.  

In other words, the better it is to be a partner at firm X, the worse it is to be an associate.  Specifically, the following indices of associate satisfaction showed high negative correlations with PPP:

• "associate satisfaction" [overall]
• "interest level of work"
• "partner-associate relations"
• "openness of finances"; and, strongest negative correlation of all:
• "communication toward partnership status."

Ironically, the only associate satisfaction question which was positively correlated with PPP was—what else?!—benefits and compensation.

This topic is, it's fair to say, one of the most pervasive, most complex, and without doubt most important facing our profession.   Associates are the future. 

How long can this go on?  ("This" being the syndrome that the most miserable associates are at firms where partners are, or should be, happiest?)  The answer may well be, "indefinitely," in which case we can continue to be a profession that consistently over-indexes on alcohol abuse, divorce, mid-life crises, and other key indicators of social, emotional, and, dare I say, spiritual, health.   Or are there better ways? 

I intend to explore the second question as best I possibly can.  Feel free to join in.