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Author Topic: Rescinding Offers  (Read 9596 times)

OnTheRoad

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Re: Rescinding Offers
« Reply #20 on: October 23, 2008, 09:57:47 PM »
Back on the boards after a very long time off. Just want to dispute this: firms bill 1st yrs at around 300/hr and pay them 100/hr. There's a site somewhere with a good breakdown with real numbers, but the deal is, firms bill at three times what they pay => they make plenty on 1st years.

Bc first year's don't make the firm money.  In fact, generally second years don't either.  It's a big investment and in bad economic times a dangerous one.  Especially if work is slow.

Drew P. Bottom

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Re: Rescinding Offers
« Reply #21 on: October 23, 2008, 10:11:01 PM »
Elementary question, but...what is the best way to accept the offer? Call the office? E-mail? Written Letter? And who do we call/contact?

And what info do we need to put in? (How many weeks we're working, whether it's first/second half...or just say I plan to work at your office for the summer?)
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Bob23

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Re: Rescinding Offers
« Reply #22 on: October 23, 2008, 10:29:27 PM »
Call the hiring partner that made you the offer, call recruiting and email recruiting a follow-up.

nealric

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Re: Rescinding Offers
« Reply #23 on: October 23, 2008, 10:56:58 PM »
Quote
Bc first year's don't make the firm money.  In fact, generally second years don't either.  It's a big investment and in bad economic times a dangerous one.  Especially if work is slow.
 

I didn't say they wouldn't take a hit. But at firms with PPP at 1M+, they can afford it if they wanted to.
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Somewhere

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Re: Rescinding Offers
« Reply #24 on: October 24, 2008, 03:17:09 AM »
they make plenty on 1st years.

Bc first year's don't make the firm money.  In fact, generally second years don't either.  It's a big investment and in bad economic times a dangerous one.  Especially if work is slow.

This is so unbelievably wrong. Do you have any idea what the overhead in New York is? Or how many hours they have to cut for first years?  Just because you bill it does not mean it goes to the client.  I won't even go into the fact that they need to make up recruiting and training costs. 

TheDudeMan

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Re: Rescinding Offers
« Reply #25 on: October 24, 2008, 08:51:47 AM »
Back on the boards after a very long time off. Just want to dispute this: firms bill 1st yrs at around 300/hr and pay them 100/hr. There's a site somewhere with a good breakdown with real numbers, but the deal is, firms bill at three times what they pay => they make plenty on 1st years.

Bc first year's don't make the firm money.  In fact, generally second years don't either.  It's a big investment and in bad economic times a dangerous one.  Especially if work is slow.

This goes to show your ignorance on economics.  You do realize that it costs significantly more to run a law firm, right?  I worked in Biglaw and have seen the break down.  Generally speaking, it takes a firm 2-3 years to make money on an associate. 

Matthies

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Re: Rescinding Offers
« Reply #26 on: October 24, 2008, 09:40:05 AM »
I haven't seen the website with all the numbers, but it's my understanding that most firms a) stick first-years on pro bono matters/smaller client matters to be handled cheaply for at least some chunk of the time; b) the time that other people spend teaching you how to do stuff isn't billed; and c) they cut your hours before actually billing the client down to what it *should* have taken you. Also, there's the cost of overhead (office, staff, tech, cleaning, food) that they don't really recoup from 1st years.

This has been my experince, break even is 3-4 years depending on salery, its also the point at which 80% on avergage of an incoming class is gone from the firm. Hence why big law can pay more, they are paying for the privladge of having the name of your dimploma on the wall for 1-3 years meaning they can bill more, but not meaning you actualy are any better of a lawyer. Its the Cravath model, pack your frim with talent from top schools then bill becuase of that, and its also why its harder in secondary markets for some people to find work from top school, secondary markets don't bill on the Cravath model, there simply is not enough demand or compeatition from other firms to pack your new 1st year associate class with all top pediagree lawyers, even if you have to go deeper into the class to do so.
*In clinical studies, Matthies was well tolerated, but women who are pregnant, nursing or might become pregnant should not take or handle Matthies due to a rare, but serious side effect called him having to make child support payments.

OnTheRoad

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Re: Rescinding Offers
« Reply #27 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.

TheDudeMan

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Re: Rescinding Offers
« Reply #28 on: October 24, 2008, 03:45:25 PM »
Yeah, you are completely missing the HUGE fact that a lot of 1st year time gets written off.  Some clients won't even pay for 1st year work.

Matthies

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Re: Rescinding Offers
« Reply #29 on: October 24, 2008, 03:48:07 PM »
This assumes that all billable hours are billed to the client. They are not, your billable hours as a 1st year ratio to whatís actually billed to the client are not going to be 2100 to 2100. Your slower and much of the time you count as billable to reach your hours in the firm wonít make it to the client and be paid back in fees.

Likewise as a 1-3 year associative your not brining in any money to the firm. Youíre relaying on work that is brought in my partners or senior associates, youíre not creating work. By year for you will be expected to be brining in clients and be creating legal work (ie new legislation gets past, you call your client and say we should review your policies based on this new rule, thatís creating legal work.) I think people donít understand that law is more about business than law, you have to be constantly creating work and getting new work to pay the salaries of your employees, especially those who do nothing to bring in work of their own.

 Its like a pyramid scheme, if those above you donít bring in enough work to cover their salaries plus yours the bottom line gets affected.  That is why year 3/4 is the magic number, by then the firm knows if youíre going to be one of those brining in money or just costing the firm money. Around that is the breakeven point, you need to start producing or you can be replaced by a new set of 1-3 years.
*In clinical studies, Matthies was well tolerated, but women who are pregnant, nursing or might become pregnant should not take or handle Matthies due to a rare, but serious side effect called him having to make child support payments.