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03 July 2008

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vahila

Relgolook is a productivity application for Microsoft outlook users. Relgolook information management provides organize and archive emails and information and reduce attrition

C

I assure you, as an entering 1L this fall, that 0Ls give an incredible amount of thought to their exit options after law school. Blame JDUnderground if you want, but debt and paying it off are a huge part of the discussion. I can't think of anyone I know who is entering a top program without a huge scholarship whose plan doesn't include working for a large law firm for at least a few years. Even the people who are hot for public interest all seem resigned to 3-5 years at a firm to pay their debts before they can go to a job they enjoy. I suspect that most students take the numbers on %grads in amlaw50/100/250 and in federal clerkships which can be found at a few places as being a much better guide for school choice than where it ranks in usnews. If, in a few years, NU starts performing especially well in these metrics, I would be shocked if there weren't a rapid response by applicants to the information.

Bill Henderson

Corey,

You raise some good points. Biglaw continues to grow; at the same time, there may not be a proportionally amount of growth in the number of young lawyers who want to make a career in Biglaw. So there may be a structural problem that will cause the large firms to adapt their business model -- something that happens very slowly, if at all, in this sector.

Re attrition, you have to be right. Profits and attrition have been climbing in unison for several years now. But a lot of Biglaw associates lateral to another Biglaw firm. This churn is not necessarily optimal for the firm. If the firm could find a better ex ante screen device, it would be better off. And the 2 year program may be that device. That said, if the 3rd year really does make students better rounded -- or better rounded students opt for 3 years --the whole thing may not work. Great lawyers are not machines; they need great analytical skill AND judgment.

So you are right, the utility of the 2-year JD is an empirical question, and the market will provide the answer. bh.

Corey

"These are the type of people biglaw firms would rather avoid no matter how smart they are."

No, there is more associate work than partner work. Partners can't bill $750 an hour to review docs. Plus there is pressure not to split the pie and add more partners. Plus, half the new partners at some firms are laterals. Bottom line, big firms plan for/experience 60-80% attrition from hire to partner. So hypothetically, what's the harm in opting yourself into the attrition pool from day one if you still pull average hours for the 4 years you are there?

Billing rates are up, hours are up, writeoffs are down. A model new biglaw lawyer this year made 160K and billed 2000 hours at $300 an hour. The firm collects $440K on that. That is a heck of a lot more than engineering firms pull in on new engineers. With those margins you can almost burn money on overhead and still turn a profit.

There is this mythology that firms lose money on lawyers unless they stay and bill 2500 for five years, but the average associate bills 2000 for 3 and quits and the firms are still recording $1M+ profits per partner. Maybe the authors of this blog can undertake to study and debunk some of the myths about firm economics that lead young associates to overwork themselves into illness and despair and still feel guilty about it.

Corey

"Also, based on the information you just revealed -- that Big Law is primarily a way to pay off your loans -- are you the type of person that the program is designed to self-select? Information gets revealed through this process, and that is valuable to employers."

Well I doubt the invisible hand would have selected me but it does turn out that I am a good biglaw lawyer after all. Neither my preference for a job I can truly love nor my firm's preference for an employee that truly loves the job were fully served, but my 120K sallie mae bill guarantees that I'll bill enough hours to fill my firm's ROI expectations on me.

But you are right, even if I had fully understood the economics in advance I would have still bought the 3L year. The judicial externship, note publication, and faculty interactions I had that year provide the only credentials that keep my long term career ideas at least somewhat realistic. Dreams of a better future reduced the feelings of being fated or compelled. 2 + 2 = 5.

I've encountered firms that might prefer their billing machines with less outside interests and might find 2-year programs more efficient, but I've also seen deep thought firms that want their candidates cured and rounded a bit more. I'd love to see comparisons of 2Y and 3Y students at major firms, both on mechanical metrics like billed hours and soft factors like networking and business development. Guess that will take some years.

Jkoerner

I agree with Professor Henderson that NU's 2 year program is driven by and will reflect employers' desires for biglaw associates. I also agree that there is a divide between employer constructs and faculty constructs (as can be seen by the prevalence of race and other "hot topic" law classes compared to the dearth of upper level business law classes in many law schools).

Most of the biglaw lawyers I know from school and since took their jobs to pay off loans and earn a big salary for a few years rather than to start a career. Many of them quit after a year or two or more likely were let go as their interest and performance waned. These are the type of people biglaw firms would rather avoid no matter how smart they are.

I would bet that NU's 2 year program is highly successful in placing students and that its success will be noticed by incoming law students as the high cost of law school is more widely advertised.

Bill Henderson

Corey,

I understand your point about pre-law preferences, and I am familiar with the 85/15 to 15/85 flip described by Nader. But only 40 students per class will enter the 2 year program. If we assume that 15% of qualified students are interested in completing their degree in 2 years (24 months, but complete 1 year before their 3 years counterparts), Northwestern's program), that is a large and potentially underserved market. In contrast, if you are part of the 85%, your preferences are overserved.

Also, based on the information you just revealed -- that Big Law is primarily a way to pay off your loans -- are you the type of person that the program is designed to self-select? Information gets revealed through this process, and that is valuable to employers.

For a comprehensive analysis from a business perspective, see:
http://www.bmacewen.com/blog/archives/2008/06/northwestern_law_schools.html

Corey

"NU Law could be taking us back to our trade school roots."

Well I specifically avoided NU Law because it (even in 2003 when I was applying) played itself off like a trade school. When I was coming in, I had high-minded notions of learning theoretical jurisprudence and rhetoric and finding inspiration from my peers to make the world a better place. The tuition bill (and the fact that my grades permitted a fast sellout) is what sent me to biglaw.

I think your analysis is interesting but you should be careful not to confuse the 3L preferences of law students (big firm job to pay back excessive tuition) with the pre-1L choosing-a-school preferences. Nader talks in one of his books about a poll of incoming Harvard Law students where something like 85% said they wanted to do public interest work and then that same group ends up 85% in private corporate practice at the end.

If the preference for the kind of jobs NU Law is teaching to doesn't develop until after the 1L year, then their admissions marketing model isn't generalizable. Sure there are a few kids out there who read Above the Law and fantasize about Skadden partners throwing staplers at their heads even before they apply to law school, but how many? And why would anyone else want to go to a school that caters specifically to kids who are in it for the money from day one?

Oh, and I categorically disagree with the comment that some people are [inately] smarter than others. People come to law school admissions and faculty hiring pre-sorted, pre-educated, and pre-privileged. The fact that law school "eliteness" measures track prep-school admissions and birth zip-code just indicates that the privilege hierarchy is widespread and ingrained. One's position in some artificial "eliteness" sub-hierarchy is a result, not a validation.

solicitor

Regarding the "smartest of the smart," have the test score credentials of NU students gone up or down as this experiment has begun to play out? I could see those rising even if some of the more theoretical academics eschew a school that signals professional usefulness.

Bill Henderson

That is a fair point. It reminds me of the status of Harvard Business Review, which includes article by B-School professors and is read by "practitioners" in the business sense of the word. Non-business school professors run it down as non-academic. But HBS is at the top of the food chain in the B-School world. NU Law could be taking us back to our trade school roots. bh.

Brian

Interesting analysis, as always. Just one very brief observation now: "eliteness" is not just a matter of perception. Some people (faculty, students etc.) are smarter than others, and it's a serious question whether the smartest of the smart thinking about law school are going to go to a law school that wants to be a business school. The answer may well be yes. But that remains to be seen.

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