Law firm compensation yet again
In today’s Los Angeles Times, front page, there is an article ostensibly about the House of Representatives enactment to require public companies to put executive pay packages before shareholders for an advisory vote. The enactment faces an uncertain future in the Senate and a certain veto by President Bush.
One of the factors pushing the issue to the forefront is a study that compared the average CEO pay as a multiple of average worker wages, using 1990 and 2005 as focal points. The difference is substantial. In 1990, the differential was 107 and in 2005, the differential was 411!
As much as partners in law firms might complain about recent first year associate compensation increases, they aren’t talking about the increases in their own compensation packages. Wonder why … I suspect that the differential we’d see there is as much or more as we see elsewhere in our country. In other words, the gap between "haves" and "have-nots" is increasing. This could well be a very significant danger signal for the stability of our country.
It certainly is for the future success of our law firms. Even though associates in large law firms are earning good money, the demands on them are also increasing. Billable hours requirements is only one such demand.
Recently, a group of law school students (speared-headed by Stanford law students) put together a "manifesto" concerning working conditions in law firms; the students asked 100 of the top law firms to sign on to the principles of a sane work environment. It remains to be seen where this effort will end, either in the round file or a new awareness by senior management that a new generation of lawyers need an altered work environment from the one in which they/we grew up.
These factors may further embolden young lawyers to "go solo." Of course, the economic return is not nearly so lucrative. Recent studies in California and Illinois indicate that the average sole practitioner earns about $50,000 to $100,000. Taking a "pay cut" may be the only way to enhance one’s "balance of life" objectives.
Between very tough work environments, high student loans residue, and the desire "to have a life," today’s generation of law students is likely to change the way law is practiced in the private sector. Can these changes come fast enough to alter the disparity between the top rung and newbies in large law firms? Is going solo the answer needed to save the profession as we know it? Questions similar to these must be asked and answered if we are to preserve our traditions.Tags: Personal Thoughts
Categorized in: Personal Thoughts