Rescinding Offers

[OnTheRoad]

Matthies, I totally get what you're saying, and I'm not arguing that the first-year associates are as important a part of the firm as a rain-making partner. I think that what you're saying is much more applicable to small or mid-size firms where the need to bring in business is a much more immediate concern. If you guys want to make it an assumption in the above calculation that a lot of first year hours get cut, I'm fine with that. But for the first year above to be costing the firm money, they would need to have almost 3/4 of their hours cut. Again, I'm not disputing your point that first-years are less profitable and a bit of a drag, and so forth. But the idea that they cost more than they make is a myth that serves the pyramid scheme.

[Matthies]

Matthies, I totally get what you're saying, and I'm not arguing that the first-year associates are as important a part of the firm as a rain-making partner. I think that what you're saying is much more applicable to small or mid-size firms where the need to bring in business is a much more immediate concern.

Its actually a larger concern at big law than mid or small. The profit margins are such that you have to create business constantly to generate the type of income you need to pay salaries. Take a look at ATL and all the layoffs at huge frims, a change in business can wreck a large firm overnight. Smaller firms tend to have more reserves to weather a bad market than large firms with lots of overhead and expensive associates salaries to pay. I’ve clerked in both large and small firms, with small firms its almost always the case we had more work then we could do, in large firms it was almost always the case we were always trying to get more work. 

[OnTheRoad]

 I’ve clerked in both large and small firms, with small firms its almost always the case we had more work then we could do, in large firms it was almost always the case we were always trying to get more work. 

Interesting to hear this. Do you think this is related to the fact that smaller firms keep capital reserves, as opposed to larger firms, who seem to scrape the pot clean every year? Any idea what size the reserves were that the smaller firms were keeping?

[Matthies]

 I’ve clerked in both large and small firms, with small firms its almost always the case we had more work then we could do, in large firms it was almost always the case we were always trying to get more work. 

Interesting to hear this. Do you think this is related to the fact that smaller firms keep capital reserves, as opposed to larger firms, who seem to scrape the pot clean every year? Any idea what size the reserves were that the smaller firms were keeping?

Smaller firms seem more likely to keep resvers, you also eat what you kill. Its also easier to cut your own salary with there are only 5-10 employees, or save up a years salary when you deptermine how much your paid. Plus the volume, a lot of the case are pay upfront, rather than bill plus 30 days. I know that he solo I work for now keeps one year’s income on his accounts all the time, which is roughly about 900k. But he spends every dime he makes, so that is his comfort zone, they guy has 3 cars a condo in Vail and travels out of the country at lest once a month, he easily blows 20k a month on just living the good life. So he keeps the resrve and spends the rest as it comes in. In lean times he just spends less, in good times, more.

[OnTheRoad]

 I’ve clerked in both large and small firms, with small firms its almost always the case we had more work then we could do, in large firms it was almost always the case we were always trying to get more work. 

Interesting to hear this. Do you think this is related to the fact that smaller firms keep capital reserves, as opposed to larger firms, who seem to scrape the pot clean every year? Any idea what size the reserves were that the smaller firms were keeping?

Smaller firms seem more likely to keep resvers, you also eat what you kill. Its also easier to cut your own salary with there are only 5-10 employees, or save up a years salary when you deptermine how much your paid. Plus the volume, a lot of the case are pay upfront, rather than bill plus 30 days. I know that he solo I work for now keeps one year’s income on his accounts all the time, which is roughly about 900k. But he spends every dime he makes, so that is his comfort zone, they guy has 3 cars a condo in Vail and travels out of the country at lest once a month, he easily blows 20k a month on just living the good life. So he keeps the resrve and spends the rest as it comes in. In lean times he just spends less, in good times, more.

You and I had some discussion about a year ago about small places out in Denver, and this here just makes me regret not being out there even more. What kind of work does he do?

[Matthies]

 I’ve clerked in both large and small firms, with small firms its almost always the case we had more work then we could do, in large firms it was almost always the case we were always trying to get more work. 

Interesting to hear this. Do you think this is related to the fact that smaller firms keep capital reserves, as opposed to larger firms, who seem to scrape the pot clean every year? Any idea what size the reserves were that the smaller firms were keeping?

Smaller firms seem more likely to keep resvers, you also eat what you kill. Its also easier to cut your own salary with there are only 5-10 employees, or save up a years salary when you deptermine how much your paid. Plus the volume, a lot of the case are pay upfront, rather than bill plus 30 days. I know that he solo I work for now keeps one year’s income on his accounts all the time, which is roughly about 900k. But he spends every dime he makes, so that is his comfort zone, they guy has 3 cars a condo in Vail and travels out of the country at lest once a month, he easily blows 20k a month on just living the good life. So he keeps the resrve and spends the rest as it comes in. In lean times he just spends less, in good times, more.

You and I had some discussion about a year ago about small places out in Denver, and this here just makes me regret not being out there even more. What kind of work does he do?

Criminal defense. And he is your typical flashy criminal defense lawyer, 8k suits made in Europe and most days he drives his Maseratri to work. He does all types of criminal law, but specializes in federal prosecutions under conspiracy charges. And he’s not just an aberration, the other solo lawyers I have met through him are all loaded. I’m in an Inn of Court with about 100 lawyers and judges, and the big law guys are always joking about how little they make compared to the small practice guys. When you keep 100% of what you make it adds up fast, and when you gotta split it between 50 other people even big fees become small. Most of the guys I know with their own small to mid size practice left big law to start their own firms because there is more money per hours worked there. I don’t know where people get this small/mid law stuff does not pay, maybe its just because they don’t publish salary numbers. But my friend a family law attorney with 1 year experience just took a job with a five person firm making $110,000 plus bonus and she is out of there at 5 PM everyday.

[OnTheRoad]

 I’ve clerked in both large and small firms, with small firms its almost always the case we had more work then we could do, in large firms it was almost always the case we were always trying to get more work. 

Interesting to hear this. Do you think this is related to the fact that smaller firms keep capital reserves, as opposed to larger firms, who seem to scrape the pot clean every year? Any idea what size the reserves were that the smaller firms were keeping?

Smaller firms seem more likely to keep resvers, you also eat what you kill. Its also easier to cut your own salary with there are only 5-10 employees, or save up a years salary when you deptermine how much your paid. Plus the volume, a lot of the case are pay upfront, rather than bill plus 30 days. I know that he solo I work for now keeps one year’s income on his accounts all the time, which is roughly about 900k. But he spends every dime he makes, so that is his comfort zone, they guy has 3 cars a condo in Vail and travels out of the country at lest once a month, he easily blows 20k a month on just living the good life. So he keeps the resrve and spends the rest as it comes in. In lean times he just spends less, in good times, more.

You and I had some discussion about a year ago about small places out in Denver, and this here just makes me regret not being out there even more. What kind of work does he do?

Criminal defense. And he is your typical flashy criminal defense lawyer, 8k suits made in Europe and most days he drives his Maseratri to work. He does all types of criminal law, but specializes in federal prosecutions under conspiracy charges. And he’s not just an aberration, the other solo lawyers I have met through him are all loaded. I’m in an Inn of Court with about 100 lawyers and judges, and the big law guys are always joking about how little they make compared to the small practice guys. When you keep 100% of what you make it adds up fast, and when you gotta split it between 50 other people even big fees become small. Most of the guys I know with their own small to mid size practice left big law to start their own firms because there is more money per hours worked there. I don’t know where people get this small/mid law stuff does not pay, maybe its just because they don’t publish salary numbers. But my friend a family law attorney with 1 year experience just took a job with a five person firm making $110,000 plus bonus and she is out of there at 5 PM everyday.

sounds like your typical criminal defense guy. I figure the assumption about small/mid size firms comes from the starting pay being lower, but I don't know? Do you think the crim law stuff is way more lucrative?

[Matthies]

I think the starting pay is thought to be lower because what you see advertised mid/small is crap jobs. Good jobs, firms with good reps, don’t need to advertise a job opening in the newspaper because if they had a good rep word of mouth would fill it. But students don’t get out and meet attorneys, so all they know about are the advertised crap jobs that no one else wants. All my clerking and job offers have come from referrals for jobs that were not adviterised.

Crim law seems to be lucrative, its cash up front win or lose. In CO once you get certified by the court you can pick up the overflow of PD cases, the state pays you to take those instead of a PD. You get assigned a court room and you get all the PD cases for that courtroom. One attorney I do side work for told me he makes 8k just from just doing that a month, five days a week from 9-12 in the courtroom then in the afternoon he works his private criminal cases. 

[TheDudeMan]

I think lucrative is a very subjective word.  You aren't going to find many criminal defense attorneys making $160k a year out of law school or even 5-10 years out (unless of course, they are the best).

[ksully]

I think lucrative is a very subjective word.  You aren't going to find many criminal defense attorneys making $160k a year out of law school or even 5-10 years out (unless of course, they are the best).

That is true for most attorneys, not just criminal defense. You will in BIGLAW, but most attorneys are not BIGLAW associates.