New Trend on the Rise
In the U.S., where clients of all sizes have been paying the apprenticeship bill, a new trend is on the rise. In the wake of the recession, many General Counsels are pushing back and refusing to pay for on the job training. They are making new demands on law firms and are increasingly challenging legal bills inflated as a result of the learning curve of new associates.
The WSJ reported that a recent September survey by the Association of Corporate Counsel found that more than 20% of 366 in-house legal departments polled are now refusing to pay for first and second year attorneys, in at least some matters. The reporting companies have annual revenues of $25 million or less to $4 billion. If law firms don't cooperate, many companies are either farming work to their own employees, or hiring contract lawyers.
The Learning Curve
The greener the associate, the more careful you need to be. Recent hires, are for the most part, ill equipped to practice law. Young lawyers can handle basic work but not complex tasks. Law school trains you how to think the law, but not how to practice in a specialized area of law. Only mentored experience can provide a new lawyer with the skill set and efficiency needed to make him or her valuable to the client. Culling documents, proof reading and legal research are not tasks that clients should generally be paying $200 to $300 per hour for. Lesser paid paralegals are trained for these tasks.
There are a number of public policy solutions to the issue of who should foot the lawyer training bill. We could simply choose to pay teachers more, and lawyers less, but that is hardly realistic in a society based around complex laws and regulations created for the most part by lawyers. Another solution is to lower the salary expectations of first year associates. We could also look to foreign models. In the UK, solicitors are required to undergo year long intensive training programs followed by an apprenticeship.
Are you Getting Best Value for your Money?
The following is familiar to anyone with experience hiring law firm counsel. You call a specific partner picked for his or her expertise, or maybe upon the recommendation of someone you respect like a CEO or another lawyer. After an initial phone call with the partner, often with members of his "team" on the line, you are told that is to your great advantage to let other attorneys supervised by the partner do "as much of the work as possible" because they bill at a much lower hourly rate.
Be mindful that this practice is often to your great disadvantage. Check firm bios to make sure that the attorneys the partner wants to assign to your matter have the requisite experience. In many cases, you will find that proposed "team" members have very little specialized experience. Often they are the attorneys at the firm who are slow and need billable hours. Often they are the youngest associates who need to be trained. They go where the work is, and they may not the best attorneys for your matter. Remember, you do have the right to dictate to the firm which attorneys can work on your legal matter.
In my opinion, the problem is worse for small business. Remember that law firms must cater to big clients with repeat business. If the trend continues, and more and more of the larger clients begin refusing to pay for the work of new associates, the pressure will be on large and midsize law firms to shift at least some of the burden to their smaller clients.
Next month we will discuss how to monitor your legal bills and address issues such as this.