BigLaw is a socialist entity, at least at the associate level. Though we don't usually use that term to label it, the fact is the law firms that we all know (and either love or hate), bastions of our capitalist, if litigious, economy, often do not mirror the market-based society that allows them to operate so profitably over time. Of course, in a macro sense, the legal industry is very much grounded in capitalism. The elite firms charge the most and turn out extraordinary profits per partner. But as it concerns individual associates, much of the business plan reeks of sameness and is restrained by simplistic equality.
The evidence of this is plentiful - with the exception of some variation in bonuses, everybody attorney in a given firm has identical salaries during their first eight years. There are no readily visible signs of meritocracy day-to-day, or even month-to-month. Target hours are set as a benchmark for productivity, but do not at all reward efficiency, or even positive results. Strictly speaking, the billable hour system gauges an attorney's commitment and value by time spent on a matter - it is an input-oriented system rather than output-focused, which would be fine, but for the fact that the only promotion a second-year associate could hope for is to become a third-year associate along with the rest of his class. Of course, there really is a substantive business reason why law firms cannot base associate salaries on merit - doing so would leave half its associates with below-average salaries and imply that the firm has some under-achievers. And what client would want a lower than average lawyer at firm A, when firm B might be able to offer up their best at a lower rate? This could create perceived value in lesser-ranked firms' attorneys (think of a parallel in Yale's no-grade system). More important to the industry as a whole, this perception should shift clients' value judgments to be slightly more in favor of individual attorneys relative to the brand of their otherwise monolithic firms.
Particularly relevant to many 3Ls now, many firms are pushing back everybody's start date, rather than reevaluate to see which of last year's summer associates showed the most promise to contribute to the firm's survival as junior associates. Combine that with the pro bono or public service stipends that several firms are offering to their not-yet-beguns, and even the generous severance packages to their fired lawyers, and one might begin to believe that many firms don't really need to make as many cuts as they're making. In a very real sense, this is an opportunity to cut the fat out of the BigLaw business model, and allows firms to really conduct internal studies of their attorneys' productivity, and let them go into the tide of general economic despair without as much stigma as would otherwise be attached to getting laid off.
This may not be quite as good of a start as 10,000 lawyers chained to the bottom of the ocean, but will this inching toward a more capitalist and efficient business structure nevertheless hold-up long-term? In short, probably not. As any reader of "Above the Law" or any other general legal blog could tell you, firms tend to be as conscious of their brands' images as any Hollywood prima donna, highlighted, for example, by the tendency in years past to fear "no-offering" unimpressive summer associates because of the effect doing so might have on the following year's recruiting efforts. The severance packages themselves show that the firms still cling to their passive-aggressive use of human capital, as they feel the need to keep even former associates' outward misery to a minimum, even as daily treatment of associates (a/k/a "work-life balance) remains notoriously poor at many firms. The culture of wine-and-dine summer associateships with all but guaranteed offers is certain to wane for the time being, but it will be back. It does seem somewhat ironic, though, that lawyers feel the need to bolster ourselves with such self-aggrandizing extravagances, given that we constitute one of few self-perpetuating ecosystems in the global economy. Litigiousness only begets more lawyers, and the best way to turn a lawyer's relationship with his client from perceivably parasitic to symbiotic is for another lawyer to step in. Yet we still feel the need to build ourselves up. The strangest part about all this is that, yes, lawyers represent a highly trained workforce . . . but do we really count as skilled labor? It is not uncommon to hear junior associates say that a monkey could do their jobs, so long that monkey was blessed with the kind of self-loathing that compels lawyers to put up with the tedium that we do.
Our current economic situation proves that socialism works . . . so long as there are capitalists out there to support it. The law firm model works, as long as clients are profitable enough to afford to pay for the standard billable hour rates that buttress the identical salaries of a firm's associate base. Even on national levels - the Kuwaiti government, for example, can afford to share huge monthly oil profits with its citizens, so long as the outside market for oil is functioning, and it minimizes those eligible for citizenship. In a world of plenty, happiness is not limited to the bounds of economic models that make sense.
This is not meant to be a criticism of being a BigLaw lawyer - I both enjoyed my summer associateship and do see myself at a firm sometime in the future when things settle down. Nor is it meant to accuse firm partners of being evil, manipulative, or unforgivably bourgeois or feudal lords. And there is certainly a viable argument that the federal General Schedule is guilty of many of the same faults as the predominant private firm compensation model. But it cannot be said that government operates on the same plane as private enterprise, and for all of the lofty "get rid of the billable hour" rhetoric that has permeated some of the more dreamer-oriented circles of the ABA (or advocates for merit pay and promotion in the government), firms might do well to reevaluate their business models in favor of sustainable growth and equity.
A note on capitalism generally ("Austin . . . we won.") In recent months, it seems that any notion of a market economy has taken on a negative connotation, to the point that for several days last week it was front-page news that China wanted to push for a new global currency. For those who think American power and influence is dropping, take a look at foreign news sources. U.S. policies and developments are on the home pages of The Times, The Economist, even al Jazeera. Over the past two months, it has been somewhat of a challenge to really get a sense of what might be going on in the rest of the world - every other country is still looking to us for guidance, inspiration, and initiative. We may perceive ourselves and even our economic models as vulnerable or even weakened, but most every other developed nation has been hit just as hard. This makes it all the more important to pick ourselves up and keep moving again. Keep at it, Comrades. Viva la revolucion . . . just know that the markets that will rise again. That's the immaculate beauty of the invisible hand. We have only to let it do its work.
