As law firms continue to face the pressure of meeting their clients' demands for better value, what does the future hold for junior associates? Matt Packer analyses the latest in a series of podcasts produced by the ABA Journal, which explores how legal services outsourcing may be able to provide a solution
A junior associate’s journey up the value chain has never been easy, but the recent decline in economic stability has made things even more challenging for some. As corporate legal departments continue to face budget cuts, the cost-saving eye of general counsel (GCs) has begun to focus on just how much they are paying for the junior members of their outside counsel.
This month’s instalment of the ABA Journal’s series of online podcasts gives this topic some food for thought, bringing together a group of experts from across the legal industry to discuss what sort of work is suitable for lawyers-in-training, and how much should it cost.
‘I can’t pay for this’
When it came down to costs, the panellists invited to take part in the podcast – including prominent academics, practising lawyers and a legal services outsourcing (LSO) executive – all agreed that GCs were having difficulties in justifying the expense of the junior associates assigned to their matters by their law firms.
According to former GC Michael Roster, who chairs the steering group for the Association of Corporate Counsel's Value Challenge scheme, when clients consider using junior associates in this climate, ‘the simple answer is that they’re too expensive’.
‘If you dig a little deeper,’ Roster said, ‘you have to look at the incentives of the current law firm system. [Junior associates are] rewarded through billable hours, and somewhere down the line, general counsel are going to say, “I can’t pay for this.”’
‘Clients will soon begin to ask whether junior lawyers should work on their matters at all, or probe much more strenuously how junior lawyers spend their time,’ added Matthew M McDonald, a partner at Drinker, Biddle & Reath. ‘There’s a perception that, if you look at an hour of time from a junior lawyer, there’s a certain percentage of ramp-up time, which leads clients to think “they’re learning on my dime.”’
Time for a rethink
While the panel agreed that the current economic uncertainty was the trigger of some GCs’ growing discontent, Paul H Irving, a Harvard fellow and senior advisor at Manatt, Phelps & Phillips, suggested that it also presented law firms with a unique opportunity to rethink the model of how they’re delivering services and developing their junior associates. ‘GCs are concluding that the law firm model is broken and needs some reinvention,’ he said, citing better training as one area that law firms need to concentrate on. ‘In addition to technical skills, young lawyers and law students need to be focusing on judgement, interdisciplinary, problem-solving skills, and really trying to understand what the client is going through.’
McDonald said that Drinker, Biddle & Reath had already diagnosed the need for more substantive training methods. An improved programme at the firm now aims to stimulate trainees by setting more strategy-based, decision-making tasks that echo the realities of client relationships.
‘Clients are looking for the best work at the lowest prices,’ said James Steigerwald, litigation partner at Duane Morris. ‘If you deal with [this] upfront, and you are communicating with the client about it, there is a role for junior associates on many assignments.’
Scope for hope
While the rapidly changing legal landscape is forcing the industry to confront harsh realities about maintaining value in client services from outside counsel, it has also made room for more focused thinking on how the career development of young lawyers could be improved.
‘We have to ask ourselves, “What is valuable work for a young lawyer?”’ said Leah Cooper, director of legal services outsourcing at leading provider CPA Global. ‘If they’re spending loads of time drafting responses to interrogatories or ploughing through documents or doing some sort of legal research, are they doing it in a time-efficient way?’
Cooper added that, in its tripartite work with in-house counsel and law firms, CPA Global focuses on ‘segmenting the right work to the right people in the most cost-effective way. We take some of the lower-complexity work off the plate of the in-house lawyer or the law firm, do it at a much cheaper rate, and give that GC some additional value. It’s really about getting lawyers back to practising law’.
One misconception about LSO companies, she said, ‘is that we’re seeking to replace the law firms, and actually, it’s just the opposite. We want to work and collaborate with the corporate client and the law firm [to ensure] that the in-house legal team is best placed to understand the needs of the business and give back strategic advice’.
The growing market for legal services outsourcing could benefit junior lawyers by freeing them up to place documents in their strategic contexts, said Cooper. ‘We are not a law firm and we don’t practise law, so we don’t offer legal conclusions. [But] my team could do a lot of the legwork on legal research and have the junior lawyer start learning how to interpret [the material], in order to give the partner the information he or she needs’.
Irving agreed with Cooper’s assessment. ‘I certainly think that this is the direction the profession is going in and should be going in. I think ultimately the role of junior associates should be to get trained in order to become partners.
‘We’ve turned junior associates into commodity providers,’ he added, ‘but I think those commodity services could be handled much less expensively and certainly more efficiently by outside service providers.’ This, he said, would allow lawyers to develop their strategic thinking.
In Steigerwald’s view, the process of nurturing lawyers will bring significant, long-term benefits to traditional law firms. ‘I look at this economy as a great opportunity for us to upgrade quality,’ he said.
To listen to the full podcast, visit the ABA Journal's page here