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Pepperdine University School of Law

Friday, January 25, 2013

Solan: Solve the Law School Crisis by Paying Associates Less

Huffington Post op-ed:  Pay Associates Less? A Novel Response to a Rapidly Changing Legal Market, by Lawrence M. Solan (Brooklyn):

Legal education is said to be in crisis. Law school applications are down sharply as prospective law students question whether the high cost of legal education is worth it. A good part of the declining interest results from the loss of entry-level jobs at large law firms, which typically pay salaries high enough to offset post-graduation debt.

As firms complain that recent graduates are inadequately trained in the practical aspects of lawyering, law schools, including my own law school, are implementing various forms of experiential learning, ranging from in-house clinics to enhanced externship opportunities to the equivalent of full-year apprenticeship programs. While law schools should continue training lawyers to hit the ground running, these moves respond to only a small part of a larger problem.

Much of what is driving the diminution in opportunities for law school graduates at elite law firms is the fact that business clients have become less willing to pay high hourly rates for teams of novices. ...

The crucial question facing both legal educators and the legal profession, then, is how to get newly minted lawyers through the first couple of years so that they gain enough knowledge and experience to become “adult lawyers” capable of producing high professional caliber work.

Here is a simple proposal to address at least part of the problem: If clients are not willing to pay top dollar for the work of inexperienced associates, hire the associates at lower salaries, and give them substantial raises as their value increases…

Why not cut associate pay in the early years? For example, offer them $75,000, $125,000 and $175,000 for the first three years, respectively. This salary cut will permit firms to continue to train the next generation of elite lawyers in substantial numbers, while shifting some of the cost of training its most junior associates from the clients to the trainees themselves. Moreover, although large firms face pressure to remain competitive, the promise of these substantial raises should be a significant enticement to attract the best talent. Finally, savvy business clients will respect and choose firms that honestly link compensation to the realities of the market.

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Reduce law school tuition and billable hour expectations, and you've got yourself a deal!

Posted by: Anon | Jan 25, 2013 7:10:36 AM

Oh yeah, and if big firms are going to treat lawyers like physicians (an initial training period featuring grueling hours for relatively low pay), we're gonna have to drastically restrict entry into the legal profession a la medical schools.

Posted by: Anon | Jan 25, 2013 7:55:43 AM

So the crisis is fueled in part by prospective law students looking at job prospects and salaries, and comparing that information to law school tuition and accompanying debt load. Reduced salaries means less income from which to repay debt. Any spreadsheet designed to do an analysis of this decision making, and adjusted to reduce starting salary parameters, will yield an outcome that increases the number of prospective law students deciding not to attend law school. And that, of course, makes the crisis worse. Is there any empirical evidence that the additional lawyers that theoretically would be hired if starting salaries were reduced are needed? On the other hand, if the proposal is to hire two associates for the price of one, and then to cut back their time commitments to something less onerous than 90 hours a week, on call 24/7, then that might appeal to law firms but I doubt it does much of anything to solve the problem facing law schools.

Posted by: James Edward Maule | Jan 25, 2013 7:56:46 AM

This law prof. is unbelievable. He correctly identifies a big part of the problem with legal education today in the beginning: "students question whether the high cost of legal education is worth it." But then comes up with the ridiculous solution of lower paying jobs.

And his analogy to med students is way off-base. Big firms are a pyramid -- tons of associates on the bottom, relatively few partners on top, and forced attrition built into the system. Most associates don't make it very far past the third-year, if they make it that far at all. All this proposal would do is cut into a law grads few potentially high-paying years, making law school even less likely to be a good investment.

Posted by: john | Jan 25, 2013 2:06:05 PM

While posed from varying angles, all the comments above fit the hypothesis that law school is way overpriced nowadays. The law school deans and senior tenured lawprofs who deny the fact, and seek to lay the blame at the door of BigLaw firms and state bar associations, exhibit a bunker mentality.

Posted by: Jake | Jan 25, 2013 6:29:04 PM

Does the "proposal" even make sense?

On its face, it applies only to the small slice of the market that still occupies the right lump in the bi-modal distribution (which is getter thinner every year). It doesn't apply to the vast majority of the market where starting salaries are only a fraction of the ones Solan talks about and where new lawyers are hired at salaries that don't permit them to pay off school loans. Second, as Professor Merritt points out in her devastating critique of Solan's piece, the big firms already have slashed prices by hiring lots of "staff lawyers," "contract lawyers," "discovery lawyers," and so on. Is Professor Solan aware of that? If he is, why doesn't his article reflect reality? If he's not aware of that, why not? Third, if the problem is that the market doesn't believe that the new associates add value, why isn't the solution to accelerate the value add process in law school?

I don't want to take unfair potshots at Professor Solan, but I'm puzzled as to why anyone would take his article seriously. It doesn't make sense.

Posted by: bigglaw | Jan 26, 2013 4:03:56 PM

"will yield an outcome that increases the number of prospective law students deciding not to attend law school. And that, of course, makes the crisis worse."

Unbelievable. We are pumping out around 45,000 law grads a year for around 20-25,000 law jobs. The crisis isn't the lack of law students, it's the lack of jobs.

Posted by: john | Jan 26, 2013 5:01:39 PM