rayiner wrote:They're not wrong, in that cheap leverage is better for PPP than expensive leverage all else being equal. But only if you can keep that cheap leverage busy. I think in the face of technological changes and contract attorneys, that ship has sailed. Firms can barely keep their dramatically shrunken pool of junior associates busy, and clients continue to balk at associates being trained on their dime. Junior litigation associates have been replaced with contract attorneys and predictive coding software, and those trends aren't going to reverse themselves.
Can you expand upon the whole "firms can barely keep their associates busy" thing?
I'm only asking because a common trope on TLS is to refer to several (all?) of the $160k paying firms as "sweatshops" which seems to be at odds with the simultaneous claim that there's just not enough work to go around.
I understand the difference between billables and hours in the office, and how a 12 hour day can result in only 4 hours billed, but that seems like a weak explanation for two reasons. First, a lot of non-billable work creates a clear benefit for the firm (e.g. pitch work is usually not billable, but it's what results in billable work; without the pitches you're not getting new cases at all; to a lesser degree, high-profile pro-bono and "helping a partner with an article" would also fall into this category), so it's work the firm needs done anyway, not "make-work". Second, the whole 12-hours-turns-into-4-billables clearly doesn't happen every day (I have enough friends who are currently associates to know this for a fact), it's more a once-a-month-once-every-two-months deal, usually when a lot of administrative shit is suddenly due.
There are also complaints on TLS from posters, currently working as associates, about how grueling a "300 billable hour" month is, and how you don't ever want those. I understand that - it does sound terrible. But again, it also sounds at odds with the whole "not enough work" narrative.
Can you help me understand what's going on here? It just seems really off that people can simultaneously complain that there isn't enough work to go around, and yet also claim that you're billing so many hours that your girlfriend leaves you.
The basic issue is that demand is down, realization is down, and workflow is exhibiting higher variability. For example, let's say during the boom, juniors billed 2,000 hours on average, working 2,500 hours in the process (80% efficiency). If realization was 90%, the firm might collect 1,800 of those hours. Post-boom, there is less work overall, particularly for juniors, and realization is down, but firms have cut staff to compensate. But that only masks the underlying problem. If realization is at 80%, the associate has to bill 2,250 hours for the firm to collect that same 1,800. Or, the firm only collects 1,600 for the same 2,000 billed. And with work being more sporadic, efficiency goes down. The associate might have to work 3,000 hours to bill 2,250 for the firm to collect the same 1,800. Moreover, when the firm *is* busy, those associates have to handle the same workload they would have had pre-recession with fewer people.
Thus, you might have a few 300 hour months, but they'll be interspersed with 120 hour months, and you may still struggle to hit 2,000 billables for the year. The lean months make you push yourself really hard to get as many billables in those heavy months as you can. And even if you do hit 2,000 for the year, the firm isn't happy because they're only collecting 1,600. And they can't reduce staff even further, because then they risk not being able to sop-up all the billables that are there on the heavy periods.
These numbers are all made up, but you get the idea.