« on: October 24, 2008, 03:31:56 PM »
Guys, I'm completely amenable to the argument that early associates don't earn their firms as much money as older associates, and are more inefficient, and are not that smart, and don't actually know that much about being lawyers, and have a sense of entitlement, and shouldn't be getting 160K/yr etc, etc.
All I'm saying is that the story that associates don't make their firms any money is something that has been promulgated by management to hold down wages.
Do the math:
1st Year Associates at big firms are expected to bill (minimum): 2000 hrs/yr
Assuming they manage to bill 80% of the time they spend at the office, that means they work: 2500 hrs/yr (ouch)
So, if they're getting $160,000/yr, that means they're being paid: $65/hr.
Let's just count their billable hours: $80/hr
Not bad, and better than I was getting as a carpenter.
However, top firms are billing 1st-yr associates at $300/hr (!)
This means they're making $600,000 a year on associates that they're paying $160,000/yr - a difference of $440,000. The above posters are right that they're paying for some overhead for associates. That would include: rent, secretarial support, and training. I'd love to break all of that out, but I've got some studying that I have to do. For now can we agree that the firm isn't spending 440K per associate per year in training and overhead? That would be about ten times what a law school spends on it.