Change in the Headcount at BigLaw Firms

BigLaw 

Headcount Strategies

Adam Smith Esquire's Bruce McEwen, well-known blawger, in a post entitled, Where Do You Want Your Firm to be in 2020?, reports some data on the strategic planning horizon of large law firms, which he argues does not extend beyond one, two, or three years.

Interestingly, he reports the following figures for the changes in headcount at large law firms.

[C]onsider the little-remarked but sobering figures on how the proportionate composition of lawyers at the largest 250 law firms in the US based on headcount has changed over the last decade:

• Associates: from 55% to 47% (down 15%).

• Equity partners: from 31% to 26% (down 16%).

• Non-equity partners: from 7% to 16% (up 129%).

• Other’ lawyers (staff, of counsel, contract, etc): from 7% to 10% (up 43%).

He comments on these changes later in the post:

And what, exactly, is the point about the aforementioned morphing composition of lawyers at large law firms? Simple, I believe:

• First, that shrinking pool of associates. Associates require investment in training, professional development and, yes, time write-offs. (Don’t be tempted to jump to the conclusion that firms have merely responded to client preferences by cutting associates since 2008, when clients began to get serious about refusing to pay for juniors. The decline at top 250 US firms was almost entirely before that, from 2000 [55%] to 2008 [48%].)

• Yes, associates can cost money, but they are, or ought to be, the future of the firm.

• Equity partners, also down, are costly in another way: to firms’ reported profits per equity partner (PEP). If the top line and the bottom line are essentially flat year after year (putting aside inflation and headcount growth), what’s a body to do? Cut the denominator of the PEP calculation.

• Non-equity partners and "other" lawyers, both up dramatically, can provide a particularly quick jolt to the income statement. Realisation rates for both are high, because experienced non-equity partners enjoy few write-offs and "other" lawyers are inexpensive to begin with. Firms can plausibly and sincerely claim they are simply being responsive to the market – clients like experienced lawyers with kinder and gentler rates than full partners – but what do they contribute to the next generation of leadership?

Worse, keeping a large swath of non-equity partners around too often results from managerial failings when it comes to performance reviews, or a cowardly preference for avoiding awkward conversation. Yet their growing ranks deprive associates of complex work, short-circuiting the associates’ professional development, impeding their career paths, and ultimately contributing to voluntary and involuntary attrition. Yet again, we have found an ingenious technique to pay the present while mortgaging the future.

I've blogged on this topic here and here. 

ASL's Latest TV Ad Focuses on Veterans as Students

Appalachian School of Law Welcomes Veterans

A new television commercial for the law school will air locally over the next few weeks on WCYB Channel 5, the NBC affiliate in Bristol, and WEMT, the Fox affiliate in NE Tennessee.

This commercial focuses on veterans.  It features one of our current student-veterans, Irina Dan McGarry, ’14.  Lieutenant Dan did a great job, as you can see for yourself:   

For those who want the full TV experience, here is the broadcast schedule for tomorrow, Friday, February 28:

WCYB-TV

619 am

1118 am

1206 pm

230 pm

344 pm

509 pm

1106 pm

1141 pm

WEMT (Fox)

528 pm

1024 pm News

I want to thank Trustee Joe Wolfe for making this opportunity possible.  

The Hero Story in Lawyer Marketing

Lawyers Are Heroes, Too

A blawger complains this week about the sad state of lawyer marketing.  What's missing?  The hero story, in my opinion.  Head without heart.  Features without benefits.  And, an inability to show how lawyers change the world in a positive way.  

Here's a couple of contrasting videos that help illustrate the differences in a North Carolina political contest.  

35,000 Page Views for The Red Velvet Lawyer

35,000 Page Views
Friends, family, and colleagues:

Another milestone reached!  Some time last night, page views of my blog topped 35,000. The Red Velvet Lawyer will celebrate its first birthday in mid-March.  People tell me that this type of growth for a little ol' blog is impressive.  I have to take their word for it.

In the meantime, I enjoy the connection with all of you and the opportunity to share ideas, information, and news.

Love you all, and thanks so very much for your support!

It is What You Should Do When You Get Into Any Accident

Everyone wants to ride safe on the road in their life without getting themselves off. To ride safe you have to be careful but sometimes however careful you are, mishaps happen. Suppose while riding a bike or driving a car with or without family you are hit by another vehicle and get into an accident. Any accident can be fatal for your life that brings worries and tension for you and your family. An accident could cause your whole life on a bed or some years and in the meantime you lose your carrier and invaluable time of your life that could be your future. To save yourself from this dungeon you can claim for compensation that you deserve but how?

If you are hit by any vehicle in any situation, you should not think that the negligent driver is going to pay you fairly for your damages including your medical bills, wages and others. He or she always tries to prove that mistake was yours and they are right and in the case of truck accident (http://accidentdirectory.com/), its company could be familiar with many types of these cases that can easily defend itself against such claims. The big companies have everything ready at their hands to defend themselves against any claim, so what you think, what should you do in this type of situation where you are without any help and are not going to be paid any compensation.

Don’t worry. You could get everything what you lose. You just need a lawyer who deals with the specific areas of accidents whether motorcycle, car, truck accident lawyer or personal injury or slip and fall lawyers. But you need a lawyer urgently as you get into any accident otherwise your case can be in danger circumstances and perhaps you cannot get your compensation what you deserve because the other party who has done this serious tragedy with you try to defend itself anyhow.

If they have lawyers ready at their department, they immediately come at the accident scene with accident reconstruction experts before the police and take photograph of every scene of accident, damaged vehicles and also measurement of scuff, skid and yaw marks on the road that can be main and most important evidence for the other party to defy your claim if you do not put a specific lawyer as soon as possible for you claims. Because the evidence that got from the accident scene can be manipulated and fabricated. So it is important for you to appoint a specific lawyer as soon as possible from your side that can fight for your life.

Any delay of yours in your case can make your case weak. And there are different limitations that every state has for filing personal injury lawsuit within a period of time about which perhaps you don’t know and if you somehow fail to meet the deadline for your case then it could be that you get barred for filing the case and could not get compensation.

At the end a piece of invaluable advice for you is that whenever or wherever you get hit by any vehicle, on your side you should immediately appoint a specific lawyer to fight for your claims. 

You get into an accident and do not know what you should do? Call us now on our TOLL FREE number: 1-800-617-1727

Update: The Value of a Legal Education -- On Average $1,030,000

New Data Informing 

the Debate

In several postings here, here, and here, I tracked the debate between Brian Tamanaha, author of Failing Law Schools, and Michael Simkovic and Frank McIntyre, co-authors of The Value of a Law Degree.

In a recent posting, Simkovic & McIntyre update their economic analysis and take apart the basis for Tamanaha's more dismissal point of view.  

They conclude:

Comparing lifetime earnings of law degree holders to earnings of similar bachelor’s degree holders, we find that the pretax value of a law degree is approximately $1,030,000 on average, $770,000 at the median, $430,000 at the twenty-fifth percentile, and $1,420,000 at the seventy-fifth percentile. These figures include the opportunity costs of foregone wages while in law school and financing costs. We also provide separate analyses of earnings for men and women. We find that the value of a law degree at the median is higher for women than for men because of a larger increase in work hours, but at the mean, the value for men and women is similar.

Thus, the value of a law degree typically exceeds its costs by hundreds of thousands of dollars.

Even at the twenty-fifth percentile, a law degree is typically a profitable investment.
At current price levels, law degrees generally provide an attractive double-digit pretax rate of return. Legal education is profitable both for students and for the federal government as tax collector and lender. In sum, the evidence simply does not support Professor Tamanaha’s thesis.

You can find their original analysis here. 

Life of Brian: Negotiation Strategies Illustrated in Film

Culture 

and the 

Length of the Negotiation Dance

Culture can dictate the length of the negotiation dance by determining the number of rounds of concessions and the amount of each expected concession.

In cultures in which the parties expect more haggling, parties will make 12-15 offers/counter-offers.  A clip from  Montey Python's Life of Brian, starring Graham Chapman, John Cleese, Terry Gilliam, Eric Idle, Terry Jones, and Michael Palin, illustrates haggling in a way we'd expect from this group.

Brian Cohen, played by Chapman, is trying to escape the pursuit of Roman Centurions by buying a beard as a disguise.  The frightened consumer, however, cannot buy it at the sticker price.  He is forced to haggle.  

In sharp contrast, a U.S. consumer has a low tolerance for the negotiation dance.  He or she typically will make only 2 or 3 rounds of offers. 

As a result, U.S. negotiators:

• Avoid negotiation, in general, by paying posted prices;
• Pay more;
• Move too quickly to the bottom line and short-circuit the dance; and
• Get to impasse more frequently.

Defending Your Life: Negotiation Strategies Illustrated in Film

In Nearly ALL Situations, Don't Accept the First Offer. Duh!

Defending Your Life focuses on a transition stage in which recently dead folks must show to a panel of after-life judges that they have lived full and fearless lives.  If they fail at this proof, they must return to earth and try again. Meryl Streep appears with Albert Brooks who wrote, directed, and starred in the film.

I use a clip that shows Daniel Miller, played by Brooks, negotiating for his salary at a new job.  He has died suddenly when his car hits a bus head-on. Examples from his life, including the salary negotiation, increasingly show his fear. 

In this clip, he begs his wife to practice with him the night before the salary negotiation, and then, he abandons the approach he had practiced.

The clip allows me to discuss the gravitational pull of opening offers, who should open first, appropriate concession patterns, and leverage derived from your BATNA.   

Fargo: Negotiation Strategies Illustrated in Film

The Pace of the Negotiation "Dance" 

and 

the "Nibble" Technique

Fargo, a Joel and Ethan Coen creation, follows the escalating chaos set in play by Jerry Lundergaard's effort to extort money from his father-in-law through the planned kidnapping of Lundergaard's hapless wife. Lundergaard, a car salesman at his father-in-law's dealership, has been making ends meet by falsifying records to inflate his car sales.  Now, he plans to close the financial gap by getting money out of his bullying father-in-law.  

William H. Macy plays Lundergaard.  Francis McDormand plays the pregnant sheriff in pursuit of the bungling kidnapper, played by Steve Buscemi.  

Close to the time the Coen's show us Lundergaard's mounting financial problems, Lundergaard completes the sale of a car to a couple caught in a negotiation they thought had ended long before they returned to Lundergaard's office for the keys to their new car.  

The scene helps me illustrate the timing and size of concessions in distributive bargaining.  It also illustrates a hard bargaining technique called "the nibble."  

In negotiations focused on money, the time between moves takes increasingly longer:

• 5 minutes signals:  “We’re working it out.”
• 10 minutes signals: “But it is getting harder for me.”
• 20 minutes signals: “I’m running out of room.”
• 40 + minutes signals: “Careful, we are risking impasse.”

Parties and mediators must respect this part of the dance and the implicit messages being sent.  So, a negotiator should mirror the time it takes an opponent to make a concession, even if he or she creates reasons to leave the room ("I'll talk to my boss").  And, then spends the appropriate time talking with "the boss" about something not related to the negotiation (tickets to the Gophers game). 

Thus, a negotiator should not respond immediately to a concession in the later stages of the negotiation. Respect the time intervals required to send the right message to both sides of the table.

At the same time, the amount of the offers and counter-offers gets increasingly smaller, even as the time between offers increases.  It takes twice as long to get half as much money. But, the message being sent is: “If we both keeping making concessions, we should get to a deal.”

With the "nibble" technique, you can get added value at the end of the negotiation (in this case the inflated cost of the TrueCoat).   Late in the negotiation, the other side is unlikely to walk away when faced with a nibble demand.  They are too psychologically committed to the negotiation by this time.  ("Where's my checkbook!")

A smart negotiator will resist the demand, even name the game, or be prepared to go buy the car (or other subject of the negotiation) from another provider (walk to your BATNA).  

Or, the negotiator can say: "Oh, I am very glad to see you would like to re-open our negotiations. We had a few additional items we wanted to discuss, as well."