Susan Hackett, of the Association of Corporate Counsels, calls foul on the obscene starting salaries of recent law graduates. In an article on law.com, she estimates the true cost of brand new attorneys to be about $400,000 per year. She points out that when you raise the salaries of brand new associates, you also have the raise the salaries of the more-experienced associates as well. Who pays for it? The client, of course.
Ms. Hackett goes on to excoriate the outrageous money made by lawyers in the “law firm biz”, and to suggest that corporate counsel put a stop to it:
Is this out of touch with reality? You bet. I'm completely unpersuaded by apologists who suggest that entry-level associate salaries are hardly keeping up with partners' slice of take-home pay. The fact that the associates make less per year compared to their partners than associates 20 years ago did is yet another indicator of how obscene partners' fees and profits are in the law firm biz. Sure, outside counsel are entitled to make as much money as they can, but let's not "justify" these salary increases by suggesting that they're necessary to adequately compensate associates.
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So where will in-house counsel draw the line on new associate costs? Why don't corporate clients simply say: We're not paying for this anymore? In-house legal executives need to stand up and exercise their considerable influence. Demand to know -- in detail -- why prestigious firms believe their inexperienced associates provide more value than a successful partner in a less expensive firm or an expert legal service vendor/consultant. Tell them that you're happy to pay high rates for high quality and experience, but you'll be the judge of the value provided. And if they answer that they had no choice but to follow the market in order to attract the same 50 graduates from the same 25 top-ten schools, then label them the sheep that they are, and vote with your feet.
Lawyers USA has published a story about the “top ten jury verdicts of 2006”. The number ten slot is occupied by a Texas lawsuit in which actual damages of $38.5 million were awarded. It was an underride protection lawsuit in which the jury awarded $36 million to a 25 year-old woman who survived, and $2.5 million to the family of a woman who died. Here’s a 