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Corporate Counsel Weigh in Negatively on Recent Law Firm Associate Pay Hikes

Susan Hackett, general counsel for the Association of Corporate Counsel, said that she is "very angry" about the recent hikes of first year associate salaries at major law firms across the country.  However, not necessarily for the reason you may think.

In an article on, Hackett says she is concerned that law firms will try to cover increased associate salaries with higher billable hour requirements, which may worsen an attorney attrition rate that already reaches nearly 80 percent by the time associates are in their fifth year of practice at large firms. Corporate counsel worry about this trend because high attorney turnover means clients have to regularly educate new associates from scratch on new litigations and transactions. 

"We don't want to educate 10 different associates," says Steve Hantler, DaimlerChrysler A.G.'s assistant general counsel for government and regulatory matters, who adds that he increasingly instructs law firms to use the same associates on different matters to avoid starting from scratch with every case. 

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I agree with attorney Hackett about the billable hours increasing. A local colleague sometimes refers, half-jokingly, to law firms as "law factories" because of the pathological obsession with billable hours.

As the starting salaries for new associates increase, the firms that hire them will have to increase their efficiency overall or raise the fees they charge clients. Considering that the billable hour itself likely discourages efficiency, and that first-year associates generally take much longer to do tasks and projects than do more experienced attorneys, it seems likely that clients will be paying more fees.

Those clients will be demanding more value for the increased fees. In the end, that means even more economic pressure and stress for all lawyers.

The very existence of billable hour quotas has always suggested to me a greed in our profession that I find distasteful.

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