BigLaw Raises, and a Pitch for Inside Counsel to Start Thinking Small

This past summer many big firms gave new associates a substantial raise, up to $180,000 in some cases. The authors contend there was no market-based reason for the raises, that they occurred despite the fact that there is no dearth of lawyers looking for jobs and law schools continued to graduate more lawyers than the market can absorb, and that corporate America expressed dismay at the increases.

Bank of America’s Global General Counsel David Leitch, in a letter to his outside counsel, said that although he respects the firms’ right to raise salaries to suit their competitive needs, since the market did not drive the decision he will not pay higher rates should firms try to pass the increase on to clients. Allstate’s general counsel, Susan Lees, advised firms to invest in innovation and technology rather than high salaries.

The authors note that the legal market is replete with small firms staffed with accomplished lawyers. These firms cover the range from solo lawyers to 20-person boutique firms.

According to the authors, small firms often focus sharply on a single practice area without the cross-selling inherent in big firms. They say that because small firms rarely hire brand new lawyers – instead relying on laterals – clients don’t pay for an apprentice period and rates are lower, and that small firms create the opportunity to build personal relationships, with the attorneys developing an understanding of the business, its legal issues and market pressures.