What do you say to a recent law school graduate?

[Stonewall]

The billable hour system is pretty retarded and I predict it will be replaced quickly once something better comes up. The problem is that it is like democracy in the famous Churchill's quote - so far nothing better (on a global basis) has been invented to measure the work.

However, it is more and more common to have hard caps (as opposed to just fee estimates) in the transactions here in Poland, which essentially spells the death of the billable hour, economically, since it is fairly certain up-front that the caps will be easily hit. Plus, the blended rate is very popular these days, which also in a sense upsets the partner-associate balance.

When I was in private practice, and in a small firm, I was doing as much as I could on a flat-rate fee ($1500 to run your impaired trial, which was ridiculously cheap in retrospect).  Seemed to work pretty well for 90% of files.

Massive difference between a criminal and a civil case, even when both are complicated.  Criminal cases generally have less surprises, less obstruction from your opposition, fewer seriously contested issues.  I can look at a police report and be fairly confident in how the case will likely play out, even assuming it goes to trial.  It's much more difficult to do in the civil context, making the ability to gauge an appropriate fee risky for the civil practitioner in that if the case turns out to be more complicated or the opposition more stingy or ornary, the lawyer is going to do a shit ton more work, making the case less profitable or even a money loser.

[Monoriu]

Meh, law is quite a hard thing to study, a law degree will stand them in better stead in the general jobs market than history grads and the like.

There's no reason to get a law degree unless you want to practice law or become a law professor.  Anything else people tell you is bullshit.

And the choice isn't between law or history.  Here, law is a graduate degree.  You'd be getting an undergrad degree and then going to more school instead of getting a job.

Here, law is an undergraduate degree which only the best students can study.  Being a law graduate means you're the cream of the crop.  A lot of them end up in senior managerial positions. 

[Monoriu]

Laid-off lawyers, cast-off consultants
The downturn is sorting the best professional-services firms from the rest


Jan 21st 2010 | NEW YORK
From The Economist print edition

Illustration by David SimondsWHAT do you say to a recent law-school graduate? "A skinny double-shot latte to go, please." From New York to Los Angeles, Edinburgh to Sydney, the downturn of the past two years has hit the legal profession with unprecedented severity. As even some leading law firms struggle for survival, recruitment has dried up. The lucky few who get jobs are often being told to find something else to do for now, and report for duty on some far-off date. The same is true for MBA graduates seeking jobs in management consulting. Even the mighty McKinsey is said to be postponing start dates by several months.

Given that new graduates are the grunts of the professional-services industries, earning less than anyone else and working the longest hours, the lack of demand for their services is the clearest indicator of how bad things are. Although a deeper-than-usual cyclical downturn is largely to blame—and is hitting hardest those firms that specialised in financial-market activities such as mergers and acquisitions, and private equity—it is already clear that there will be long-term structural consequences, not least a growing gap between the best firms and the rest.

http://www.economist.com/displaystory.cfm?story_id=15330702

Seeing how we have a few law students here (and plenty of lawyers) I couldn't resist posting this for the opening line.  That being said, the article is very anecdotal with no hard evidence, and says the same kinds of things I've heard about lawfirms for years.  Death of the billable hour, end of partnerships, yada yada yada.  Hasn't happened yet.

If I were a university student, my question would be, if not finance, law, or consulting, then what?  These careers may not be as attractive as they were before, but they're still some of the most attractive careers, compared to others. 

[Sheilbh]

Seeing how we have a few law students here (and plenty of lawyers) I couldn't resist posting this for the opening line.  That being said, the article is very anecdotal with no hard evidence, and says the same kinds of things I've heard about lawfirms for years.  Death of the billable hour, end of partnerships, yada yada yada.  Hasn't happened yet.

I can add some more anecdotal evidence.  I know a guy who's got a good degree in law and has been offered a job.  He signed a contract for it at the end of 2008, he was meant to start round about then.  The law firm has since postponed his  starting date by 6 months three times.  They still want him but they've not had any new people join in 18 months.

Also my brother says that the law firm he uses fired everyone who had between 3-5 years experience (something like that anyway), so there's a bit of a generation gap between people hired a long time ago who've got lots of experience and a new generation who are getting their experience now.

[Iormlund]

Here, law is an undergraduate degree which only the best students can study.  Being a law graduate means you're the cream of the crop.  A lot of them end up in senior managerial positions.

Here Law is something you take when you want to enter the civil service or to have a college degree and cannot do math. Very, very few people aim to become or end up being lawyers.

Although truth be told, that last part is also the case in engineering. Out of the dozen or so friends who took engineering only two of us actually work as such (and the other guy is a civil engineer about to become unemployed). The rest ended up doing sales, acquisitions, management, safety,  ISO compliance and other truly boring stuff.

[Zanza]

If I were a university student, my question would be, if not finance, law, or consulting, then what?  These careers may not be as attractive as they were before, but they're still some of the most attractive careers, compared to others.

The highest average salaries after ten years for university graduates here were students of "business engineering" (those guys have part engineering, part business management skills). Medicine, law, business, computer science, natural sciences, maths, engineering are all doing quite well too.

Law has a huge spread in income here. If you start working for some international law firm, you will earn tremendous amounts of money, if you start working for the state it's not bad, but if you start your own little law practice, most lawyers need five to ten years to earn good money. And even then, they don't necessesarily surpass other academics that are self-employed. 

[Iormlund]

If I were a university student, my question would be, if not finance, law, or consulting, then what?  These careers may not be as attractive as they were before, but they're still some of the most attractive careers, compared to others.

Maybe the one you enjoy or at least are good at?

Anyway, if money is what you are interested in letting top earners guide your path is a fairly stupid thing to do. In my experience those make a lot of money because of their contacts, not their particular set of skills. Choosing a career where the average guy makes more seems sensible in that (terribly depressing) respect.

[Ideologue]

I'll be fine.

[Barrister]

I'll be fine.

You'll make a fine barrista.

[Monoriu]

If I were a university student, my question would be, if not finance, law, or consulting, then what?  These careers may not be as attractive as they were before, but they're still some of the most attractive careers, compared to others.

Maybe the one you enjoy or at least are good at?

Anyway, if money is what you are interested in letting top earners guide your path is a fairly stupid thing to do. In my experience those make a lot of money because of their contacts, not their particular set of skills. Choosing a career where the average guy makes more seems sensible in that (terribly depressing) respect.

Supply must match demand for deals to happen.  Doing what you enjoy and what you are good at is like producing and selling whatever goods that you happen to have, rather than what the market really wants.  I'm not saying that one should do things that he sucks at    But the reality is, only a few lucky ones enjoy what they do.  Most people do things they don't mind doing. 

[Gups]

The billable hour is already dead for low end legal work (entry level litigation, conveyancing, wills etc) where anyone who wants to compete has to commodotise and make their profits by cutting costs through IT and concentrating on bulk.

At the high end, the billable hour won't die because clients are prepared to pay for quality and specialists won't do work on a fixed fee basis where the risk is all with the lawyer. Legal fees on M&As, corporate structure and big litigation are miniscule compared to the size of the sums at stake. In house Counsel are not going to risk their jobs by sacrificing quality for fee certainty.

2-3 years ago, it became possible in the UK for law firms to become limited companies rather than partnerships. One or two small firms have done so, but rather to my surprise nobody significant has. I think this is a shame beacuse the partnership model is terrible, lawyers being generally pretty poor managers and businessmen.

[Martinus]

Gups is right. I think however that litigation (and by litigation I also mean contentious regulatory work, not just court litigation) is the only area where it will stay since (i) clients are prepared to pay that, and (ii) you can't easily predict the amount of work needed. The only work last year I have been able to charge with my full hourly rate without caps of any kind, for example, was leniency work I did for a client in Poland. When it comes to preparing merger filings, drafting contracts etc., however, it's unlikely you will get a client willing to pay on an hourly basis without any cap.

[Gups]

In fact, the high end stuff is increasingly subdivided. On a M&A deal, the strategic stuff may still be chargeable at £500/hour by an experienced partners and senior associates but a lot of the grunt work - the due diligence etc - is now being outsourced. Ditto where the litigation requires trawling through vast wauntities of paperwork. Clients are just too sophesticated to pay £250 an hour for a junior lawyer in NY or London to do this work when it can be subcontracted to South Africa or India where they will do a better job for a fraction of the price.

[CountDeMoney]

I'll be fine.

Hang out your own shingle, and get into collections and foreclosures.  They're making big bucks these days.

[CountDeMoney]

In fact, the high end stuff is increasingly subdivided. On a M&A deal, the strategic stuff may still be chargeable at £500/hour by an experienced partners and senior associates but a lot of the grunt work - the due diligence etc - is now being outsourced. Ditto where the litigation requires trawling through vast wauntities of paperwork. Clients are just too sophesticated to pay £250 an hour for a junior lawyer in NY or London to do this work when it can be subcontracted to South Africa or India where they will do a better job for a fraction of the price.

True to an extent.  All my brother-in-law's classmates that went to work with DLA Piper have been getting the hatchet.   The corporate clientele has been shrinking.