HR Management & Compliance

The Price of Success?

It has become an employee’s market, and jobseekers are being more forward about what they expect from employers. In the world of legal employment, that has translated to some tangible trends. One casualty may be the prehire arbitration agreement.

Source: erhui1979 / DigitalVision Vectors / Getty

Major law firms, including Orrick Herrington, Skadden Arps, Kirkland & Ellis, and Munger, Tolles & Olson, have dropped prehire mandatory arbitration agreements in an effort to attract and recruit elite new lawyers. Because DLA Piper, America’s second-biggest law firm with 3,750 lawyers, hasn’t dropped prehire arbitration agreements, a “Dump DLA” movement has begun at major Ivy League law schools. Watch for that movement to grow and for more big law firms to drop the requirement, at least until arbitration comes back into vogue.

The starting salaries at big law firms have gone through the roof as well. Major firms, including Cravath Swaine and Simpson Thacher & Bartlett, have set a bar that other firms are scrambling to meet. New associates at those firms receive a starting salary of $190,000, with expectations of exceeding $200,000 by the time the bonus season is over. Senior associates at the top firms command a base salary of $340,000, with six-figure bonuses given to the best of them.

But those economics work only if associates produce enough billable hours to justify their cost, with enough excess profit to allow for the average partner in each of the nation’s 40 most profitable firms to take home more than $2 million a year. Indeed, the average partner at Cravath Swaine and five other firms in America’s big law elite earns more than $4 million a year.

So what’s the quality and quantity of performance expected of associates who are earning half a million dollars a year and are on track to earn 10 times that much once they make partner? There are only so many hours in a day. Sometimes, successful associates are killing themselves to keep up.

Up or Out

Most large law firms have an up or out policy that weeds associates out of the pack with each passing year. By the time an associate has worked for a firm for seven years, the partnership prize is dangling right in front of him. Once he makes partner, he often must jump a second hurdle and become an equity partner, the level at which the highest profits are made. Like Sisyphus, there’s constant need to push forward lest he stumble and the prize slip away. It’s often a stressful existence.

Gabe MacConaill was a 42-year-old partner at the Los Angeles office of Chicago-based Sidley Austin, the 11th largest firm in the country with nearly 2,000 lawyers and a per-partner annual profit over $2 million. A partner who had been MacConaill’s mentor left the firm, as did an associate who had supported him in his practice. He told his wife that Sidley hadn’t hired replacements to restore that support, and his level of responsibility had amped up. He noted the cases he was working on were the most stressful and difficult of his life. When she suggested that he quit the firm, his work ethic got the better of him, and he told her he couldn’t quit in the middle of a case.

On Sunday, October 14, while he was in the midst of working on a major bankruptcy matter, MacConaill received an e-mail at home. He told his wife he needed to go to the office to handle something. He took his gun with him and shot himself in the head in the parking structure of his downtown office building.

A month later, his widow, Joanna Litt, wrote an open letter to the legal community titled “Big Law Killed My Husband.” She describes an episode when he was so ill that she suggested he go to the emergency room, and he replied, “You know, if we go, this is the end of my career.” Her conclusion: “Simply put, he would rather die than live with the consequences of people thinking he was a failure.” The danger she identified: “a high-pressure job and a culture where it’s shameful to ask for help, shameful to be vulnerable, and shameful not to be perfect.”

Quality of Life

In almost every industry—not just law—it’s an employee market, reflected by rising salaries, more perks, more leverage in insisting on contract terms, and more recognition and responsibility. But there is no discounting the importance of—quite literally—quality of life, the message Joanna Litt wants us to hear.

Mark SchickmanMark I. Schickman is of counsel with Freeland Cooper & Foreman LLP in San Francisco and Editor of California Employment Law Letter. You can reach him at 415-541-0200 or schickman@freelandlaw.com.