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Author Topic: bad ECONOMY = bad FALL 2008 OCIs?  (Read 9654 times)

thorc954

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #20 on: April 03, 2008, 01:43:21 PM »
Abovethelaw.com posted on the Thelen situation, and they definitely did not cut summers.  Check it out:

http://www.abovethelaw.com/2008/03/nationwide_layoff_watch_thelen.php


from what i just read on there, it doesnt say, but I wouldnt imagine they would admit it if it were true.  My source came from a Thelen attorney though, so I kinda trust them.  They were right on with all of the other numbers.  Its irrelevant though since my firm hasnt cut summers. 

themanwithnoname

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #21 on: April 03, 2008, 07:02:28 PM »
Come on, a few 1L's over a partner?  What work is the 1L brining in?  Let's be honest here!  Do you think that a firm paying a 1L market salary is raking in the dough from the 1L's work?

Yes, 2000 billable hours at 300 bucks an hour.  Say they only even bill the client for 1500 hours (which is a pretty low number) the firm just made $450,000 and pays $160,000.  After expenses firms at least make $200,000 a year on first year associates.

fixed

good god are you wrong. A first year associate eats up way more money than 160,000. There is also the bonus, health insurance (not paid by the firm in the case of the partner) Social security contribution (not paid by the firm in the case of the partner) 401(k) contributions (not paid by the firm in the case of the partner) recruiting costs, training costs, etc. In addition, associates cost the firm money in terms of support staff, supplies, cars, dinners, and a lot of other things. Associates typically do not net a profit for the firm for three years.

thorc954

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #22 on: April 03, 2008, 08:06:47 PM »
completely random, but a lot of people on here are big law SA's, so might as well commandeer the thread for a minute.  Anyone know when dinner/rides kick in at DC offices?

themanwithnoname

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #23 on: April 03, 2008, 08:09:37 PM »
completely random, but a lot of people on here are big law SA's, so might as well commandeer the thread for a minute.  Anyone know when dinner/rides kick in at DC offices?

I don't think it is consistent across every firm.

thorc954

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #24 on: April 03, 2008, 08:48:52 PM »
thanks :)

GA-fan

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #25 on: April 04, 2008, 10:17:43 AM »
Come on, a few 1L's over a partner?  What work is the 1L brining in?  Let's be honest here!  Do you think that a firm paying a 1L market salary is raking in the dough from the 1L's work?

Yes, 2000 billable hours at 300 bucks an hour.  Say they only even bill the client for 1500 hours (which is a pretty low number) the firm just made $450,000 and pays $160,000.  After expenses firms at least make $200,000 a year on first year associates.

fixed

This is a pretty unenlightend and simplistic view of how law firms make money off associates. Law is a business with overhead expenses. Did you want an office? a desk? How about health insurance? Malpractice insurance? Bar expenses? training and CLEs? Maybe you'd like a secretary and a computer, too. Firms typically spend 1/3 of your billing rate just to keep the lights on. They spend another 1/3 providing you with a salary, benefits, employee payroll taxes, and a bonus. Finally, 1/3 or so goes to the partners. The more hours you work, the more this skews in favor of the partners' profits. at 1500 hours, you're probably barely breaking even.
partners take a pretty large financial risk when they hire an associate.

mike4488

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #26 on: April 04, 2008, 10:49:43 AM »
actually I calculated 1/3 for salary, 1/3 for expenses, and 1/3 for partners.  the calculation for partners is how law firms make money.  Like I said I used 1500 as a very low number.  Normally that number will be at least 2000 or so.  anyways it doesn't really matter.


Come on, a few 1L's over a partner?  What work is the 1L brining in?  Let's be honest here!  Do you think that a firm paying a 1L market salary is raking in the dough from the 1L's work?

Yes, 2000 billable hours at 300 bucks an hour.  Say they only even bill the client for 1500 hours (which is a pretty low number) the firm just made $450,000 and pays $160,000.  After expenses firms at least make $200,000 a year on first year associates.

fixed

This is a pretty unenlightend and simplistic view of how law firms make money off associates. Law is a business with overhead expenses. Did you want an office? a desk? How about health insurance? Malpractice insurance? Bar expenses? training and CLEs? Maybe you'd like a secretary and a computer, too. Firms typically spend 1/3 of your billing rate just to keep the lights on. They spend another 1/3 providing you with a salary, benefits, employee payroll taxes, and a bonus. Finally, 1/3 or so goes to the partners. The more hours you work, the more this skews in favor of the partners' profits. at 1500 hours, you're probably barely breaking even.
partners take a pretty large financial risk when they hire an associate.
Boalt Hall '10

themanwithnoname

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #27 on: April 04, 2008, 11:42:05 AM »
actually I calculated 1/3 for salary, 1/3 for expenses, and 1/3 for partners.  the calculation for partners is how law firms make money.  Like I said I used 1500 as a very low number.  Normally that number will be at least 2000 or so.  anyways it doesn't really matter.


Come on, a few 1L's over a partner?  What work is the 1L brining in?  Let's be honest here!  Do you think that a firm paying a 1L market salary is raking in the dough from the 1L's work?

Yes, 2000 billable hours at 300 bucks an hour.  Say they only even bill the client for 1500 hours (which is a pretty low number) the firm just made $450,000 and pays $160,000.  After expenses firms at least make $200,000 a year on first year associates.

fixed

This is a pretty unenlightend and simplistic view of how law firms make money off associates. Law is a business with overhead expenses. Did you want an office? a desk? How about health insurance? Malpractice insurance? Bar expenses? training and CLEs? Maybe you'd like a secretary and a computer, too. Firms typically spend 1/3 of your billing rate just to keep the lights on. They spend another 1/3 providing you with a salary, benefits, employee payroll taxes, and a bonus. Finally, 1/3 or so goes to the partners. The more hours you work, the more this skews in favor of the partners' profits. at 1500 hours, you're probably barely breaking even.
partners take a pretty large financial risk when they hire an associate.

Actually it does matter becasue law firms lose money on first year associates.

1LMan

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #28 on: April 04, 2008, 11:46:09 AM »
What are you basing this on?  I'm not challenging it, I'm just curious what factual evidence you have to suggest this.

Firms have billable hours requirements and first year associates are billed at 200-300 an hour, sometimes more.  Multiply that by 1800 (an extremely modest billable requirement) and you are well above what the associate costs the firm.  I simply do not see what you are basing your information off of.  Even a quick and dirty look at what a young associate bills shows profit margin.  I hate to break it to you, but 1/3 of an associate's billables are not going to overhead.  A big firm will have over 500 attorneys, usually 200-300 in a particular office.  Take the overhead and divide it by the total number of employees, weighted based on their salaries.  Your math is ridiculous.

emtjp1028

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Re: bad ECONOMY = bad FALL 2008 OCIs?
« Reply #29 on: April 04, 2008, 11:56:58 AM »
I was told, flat out, by some of the BIGLAW firms that I interviewed with that they don't make a profit off of newer associates, typically for the first three years.

Now, with that said, that does not mean that all firms fail to make a profit...