: The Blawgraphy
Life of a Law Student, University of Houston Law Center

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WSJ: Law Firms Curtail Associate Programs As Economy Slows

Well this is not good news for many of my compadres – from the Wall Street Journal, Law Firms Curtail Associate Programs As Economy Slows

This time last year, salaried lawyers at many of nation’s largest firms had just scored a pay bump, as business was blazing and firms were scrambling to keep talent. Now, due largely to a slowdown in work relating to mortgages, real estate, mergers and private equity, some firms are rescinding offers to incoming associates and summer associates, asking first-year lawyers to start several months later and shortening their summer programs to save money.

Law firms are businesses. Associates should be asking themselves what they are worth and why, and, particularly now, if there aren’t perhaps ways they could increase their value somehow.

Associates are key revenue generators for law firms. Firms generally charge clients an hourly rate for associates’ work, and the more work firms can assign to associates, the more they can earn. But associates are expensive as well, especially now, after firms jumped to match each other’s raises for them when times were good.

The salary for many entry-level lawyers at large firms in big cities is currently $160,000 per year. Summer associates — typically law students between their second and third years of law school hoping for offers of full-time employment after graduation — often get paid by the week at a rate pegged to the first-year associate salary. In many offices, summer associates in 2008 will bring home $3,100 weekly. So shaving weeks of employment can mean real savings for a law firm.

Make rain boys and girls, make rain.

“I come to work and expect 12-hour days and it’s just not happening,” said one junior associate at New York’s Weil, Gotshal & Manges LLP. “People have encouraged me to take on pro-bono work, and I have, but there are days when I don’t have enough to do from 10:30 to 6.”

“I’m not exactly complaining,” said the associate. “I’m going to the gym a lot, but frankly, I’m a little bored.”

Sounds like you’re about to be a little downsized, that could be exciting.

Rankings Twist Law School Financial Aid Choices

Margot Adler at Public Radio’s Justice Talking takes a look at the ugly side of the economics of higher education in College Admissions: A Game of Privilege?

This part of the discussion with education researcher and policymaker Ross Weiner and public universities representative Peter McPherson highlights a particularly pertinent issue in law school settings.

Anyone paying attention to the law school rankings game can recognize the not so invisible hand of the rankings behind this statement from Ross Davies:

One of the things that we can look at is how colleges and universities use their own financial resources either to broaden access or to serve other purposes. And what we’ve seen is a huge shift away from providing institutional financial aid to the financially neediest students and more towards giving larger financial rewards to students who could afford to go to college whether they got a financial award or not. But these public universities, in order to move up in the ratings and the rankings systems, are actually buying up students who have done better previously. And it’s a real problem because we’ve got to figure out how to reward and incentivize these public institutions to serve these students who are going to struggle academically and financially. The country needs for these students to be more successful. And right now all the signals and all the status are towards universities and colleges becoming more elite, and not serving struggling students.

There is a clear incentive to “buy” high performing students in order to increase the illusion of selectivity. This incentive in turn puts pressure on admissions offices to make choices based on numbers that it might otherwise make on less quantifiable grounds and also applies pressure to increase tuition to fund the arms race. In this context, the recent moves by wealthier universities to reach into their endowments looks less like philanthropy and more like the erection of barriers to entry.

When the rankings start to reflect not the value the institution can impart on a student by virtue of its education but rather the status the school can achieve by leveraging its endowment to pad its LSAT stats, then it’s time for a MoneyLaw revolution.

Study Cites Economic Efficiency, Better Outcomes for Federal Public Defenders

Adam Liptak picked up on a recent study of federal public defender programs for the NY Times, Public Defenders Get Better Marks on Salary. In An Analysisof the Performance of Federal Indigent Defense Counsel (.pdf), Harvard economist Radha Iyengar studied the the performance of Public Defenders and Court-appointed attorneys in federal cases. From the abstract:

Exploiting the use of random case assignment between the two types of attorneys, an analysis of federal criminal case level data from 1997-2001 from 51 districts indicates that public defenders perform significantly better than CJA panel attorneys in terms of lower conviction rates and sentence lengths. An analysis of data from three districts linking attorney experience, wages, law school quality and average caseload suggests that these variables account for over half of the overall difference in performance.

Economists as Expert Witnesses

Jenn Chiang, my classmate and apologist par excellence for the top hat and monocle set, has apparently thrown over Julian Simon and Montgomery Burns as her roll models and fixated, at least for the time being, on David Teece.

Read all about it @ the WSJ: Economists as Expert Witnesses

For high-profile economists like the 58-year-old Prof. Teece, expert testimony has become a way to earn $2 million or more a year. Their rise has its roots in the Reagan era of the 1980s, when a free-market view of the law inspired by University of Chicago scholars gained ground. Courts now rely far more on economic analysis, with its apparent precision, to reach decisions. As a result, big companies in legal disputes race to enlist top economists on their side, paying top dollar in an arms race for talent.

Aside from the rising general need for expert witnesses in complex litigation, I think it helps that Teece advocates a position a particular type of litigant really likes to hear.

In a widely cited 1986 paper, “Profiting from Technological Innovation,” he argued that the big winners from breakthrough ideas can be companies that control distribution and customer service, not the inventors.

Lest I give the wrong impression, I should point out that Chiang and I actually agree on most things, having been re-educated by the same economics program, but I think there is a limit to the number of degrees one has time to make use of on this mortal coil.

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