The Wall Street Journal Law Blog ran a nice post yesterday on the projections of BigLaw managing partners for 2007. The post summarizes and discusses data from the Citigroup Private Bank’s forthcoming “Managing Partner Confidence Index,” supported by slides from the underlying study.
Not too surprisingly, most managing partners expect both revenues and expenses to increase. 44% of managing partners expect more than a 3% increase in billables, 82% expect some increase, and 73% expect the increase to be one of the primary drivers of revenue. 70% of MPs expect more than a 5% increase in expenses, and 91% expect lawyer salary and benefits to be the primary contributors to that increase.
Firms continue to hire associates (anecdotally, 93% of firms are planning for an increase), though they’re planning for rather small increases in the number of equity partnerships: 36% are expecting less than a 3% increase, 26% anticipate no change, and only 30% expect more than a 3% increase. 8% actually expect to reduce the number of equity partners. (I’d love to see parallel data over the last 2-3 years on this.)
Dan DiPietro, who led the team conducting the study, comments that associates’ billables, though increasing, remain below the 1998-2000 levels, and that firms are hiring to make up for the shortfall in hours. The WSJ Law Blog asks whether associates would prefer to see higher billable requirements (but better chances at making partner) or more associates (and less chance of making partner). The comments seem to favor more hiring (or perhaps more accurately, a lighter workload for current associates) quite strongly, in large part because the likelihood of making partner is perceived to be low and the rewards are judged to be dubious. No surprises there either, though the responses hardly qualify as scientifically accurate.
It also seems to me that the competition for partnership is just another step on the ladder for many high-performing lawyers rather than something that they pursue from a true desire to reach that goal, and that competitiveness for the sake of winning (whether the prize is truly desirable or not) falls apart quickly when it faces a genuine challenge. In other words, a person may compete through high school to get to a good college; compete through college because that’s the key to a good career; compete through law school either intentionally or because it was the least unappealing path (by family prescription, dislike of the sciences, or passivity); compete into a plum law firm job; compete to rise through the associate ranks… But find at some point that the cost of competing exceeds the value of the reward. And that’s burnout.
So, perhaps the question should be, what reward will keep associates at firms, will keep them working hard, and will retain its luster long enough to maximize the return for all interested parties? It isn’t money, and I’d suggest it isn’t partnership potential. Instead, I think it’s rewarding work that’s intellectually engaging and meaningful, performed in a collegial setting and supported by good training. It’s having a purpose and working in service to that purpose. The purpose will vary from individual to individual: money, partnership, prestige, “saving the world,” representing certain points of view, and so on. The challenge for firms, I believe, is finding a reasonable business opportunity that permits individuals to effect their individual purposes in a way that advances the corporate good and serves clients well.