Show Me the Money: Demonstrating Value as a New Lawyer

cash-registerEveryone knows the continuing economic recession has put tremendous pressure on the big firm staffing model. Layoffs continue and most major firms have drastically reduced their entry level hiring. Even if you can get a big firm position, or keep the one you have, what will it pay? The answer looks like less than you might have thought with a lot of pressure driving down entry-level salaries.

Over the past decade, big firm associate salaries increased at a pace far exceeding the rate of inflation. This put pressure on firms to pass on the higher costs to clients. In good times, clients were more willing to pay the freight on the belief that they were receiving higher quality service.

Now, clients demand different billing structures and lower costs. Firms can no longer pass expenses on to clients without the risk of losing their business. Moreover, there are more opportunities than ever to outsource routine legal work or hire temporary assistance during times of heavy demand. What could be termed “commodity” legal work (document review, routine drafting, etc.)—work that was once done exclusively by entry-level lawyers—can now be done more cheaply (and perhaps efficiently) elsewhere.

Where does all this leave the newer lawyer or law graduate? To justify making the bigger bucks, you will HAVE to demonstrate your value. This means less emphasis on pedigree and credentials with more focus on technical skills, business development potential and client service. The successful younger lawyer in private practice, whether in big firm or small, now must think of him or herself as an entrepreneur. The focus has to be on what you will bring that separates you from everyone else—whether your client is a small business or the partner in the office next door.

(photo: carlospedraza)

1 Comment

  1. Business development should be in all caps. Sometimes it makes more sense to be the work horse for a few years and “pay your dues,” but if you don’t understand how a business (specifically, a law practice) grows, you’re going to wake up one day and find out your work horse services are no longer needed because you’re being replaced by a younger model or outsourced headcount. Be entrepreneurial and pay attention to how your firm is operating, so you can anticipate and flow with changes (including exiting before you’re made to exit).

    And while you’re being entrepreneurial, study up on social media for lawyers. You just might find yourself some job security as the in-house expert. Worst case scenario, you’ll have developed a community of law peeps to help you out if you need to make a move.

    Why would I know anything on this topic? I got burned as a young associate a long time ago (don’t wish that on anybody). More recently, I’ve been working as a legal recruiter in the BigLaw sandbox, and I see a lot of associates that have “it” figured out, and I see a log of their hapless colleagues who are becoming the “lost generation.” Be smart.

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