Abandoning Billable Hours May Help Slow the Treadmill

If you read the Winter edition of The Philadelphia Lawyer, you might have taken note that average starting salaries for legal professionals, and particularly associates at the largest law firms, are projected to rise 4.2% on average. So it did not surprise me when I read an article that my Dad sent me, noting that at large firms with more than 501 lawyers, associate starting salaries increased to $160,000. And just today, my Dad sent me another article, Who’s Cuddly Now? Law Firms.  According to this article, many firms are starting to consider abandoning billable hours to slow the treadmill.  And it’s about time, too!  We’ve all seen statistics and heard stories about how lawyers are overworked, depressed and leaving. Thank goodness for those law firms (mine included) that have done away with billable hours to encourage work-life balance. As someone stated in the above-mentioned New York Times article, “Just because something always has been doesn’t mean that it always must be.” It’s time for our profession to rethink the way it does business and to catch up with other professions!

More on the Legal Wage Gap

In his article Hard Case: Job Market Wanes for U.S. Lawyers, Amir Efrati of The Wall Street Journal provided recent numbers on pay and employment in the legal profession.  The article notes that starting salaries at large law firms are unprecendent, but:

the majority of law-school graduates are suffering from a supply-and-demand imbalance that’s suppressing pay and job growth. The result: Graduates who don’t score at the top of their class are struggling to find well-paying jobs to make payments on law-school debts that can exceed $100,000. Some are taking temporary contract work, reviewing documents for as little as $20 an hour, without benefits. And many are blaming their law schools for failing to warn them about the dark side of the job market.

While salaries at large law firms grew by approximately 22%, income for the rest of graduating classes (around 75% of the class) dropped.

The article indicates that a combination of factors may be to blame, including the legal profession growing less than half as fast as the broader economy; an increase in the number of accredited law schools churning out graduates; and the possibility that law schools are giving applicants a false sense of reality by padding their numbers.

One law school graduate informed the WSJ:

He’s making less money [as a sole practitioner] than at his last job [where he made $32,000 a year] and has thought about moving back to his parents’ house. “I didn’t think three years out I’d be uninsured, thinking it’s a great day when a crackhead brings me $500.”

Bottom line: Don’t become a lawyer for the money.