What corporate cost-cutting might mean to law firm associate

In The Am Law Daily blog, Zach Lowe reports on a panel discussion among outsourcing experts and in-house counsel, presented as part of Argyle Executive Forum’s  2010 Chief Legal Officer Leadership Forum yesterday. Despite the moderately reassuring title of the post, "This Isn’t the End of Big Law Firm Associates," the news is not great. As Lowe himself notes, “We imagine that if we were a law student hoping to head to a big firm or a partner at that firm, we would not have been thrilled with what we heard.”

Here’s some of what Lowe & Co heard… As in-house counsel look for ways to save money, more work will go to legal outsourcing providers and less work will go to junior associates at large firms. Some clients already refuse to pay for the work of first- and second-year associates, and many are turning to smaller regional firms outside New York and Washington, D.C.

Based on my own experience, I’m somewhat skeptical of the claims of one outsourcing panelist. Brandon Daniels, a vice president at CPA Global, argued, for example, that rather than having a law firm draft a complete motion for summary judgment for a flat fee, “We can carve up this piece of work.” According to Lowe, “Daniels says the work that goes into crafting and defending such a motion can be broken into distinct chunks, and that some of those chunks—such as researching precedent and other document review—can be done (perhaps in India) through an outsourcing agency like his.” While it might save a few bucks in the short term, the process seems likely to lead to an inelegant and less-than-cohesive document, which might not serve the client in the long run. (For other perspectives about the ethics of outsourcing, click here.)

As for the ban on junior associates, even some in-house counsel acknowledge that such a step might not work entirely to their benefit. One drawback is that it will narrow the pool of skilled lawyers from which corporate law departments draw their own hires. Among practical suggestions for law firms who want to keep their junior associates on the clients’ payroll:

•    Consider setting up an apprenticeship program, like that at Howrey

•    Use secondments, in which associates are embedded in clients’ offices

•    Integrate associates “more fully into a client’s legal work” (in the words of Tanuja Dehne, deputy GC at NRG Energy, “I need to get to know [the associate] and they need to get to know me. Right now, I don’t know who these people are. It’s not my job to develop these associates.”).

- posted by vera