Generally I am skeptical about the leisure time figures. Most of the so-called 9-5 white collar workers I know take a substantial amount of work home with them. Indeed a similar system that is used to drive junior lawyers has been implemented in a wide variety of settings. So many files in so much time. Get it done at the office or get it done at home but you only get paid for so many hours. Performance benchmarking is in wide usage and dominates career progression. You can work 9-5 but you are going to get hammered on the performance review.
As for lawyers what can I say. Bad life mistake for every three you work 10 gets sucked out of your soul.
Tfast.
>
>
>
>
> At least for some managerial-professional workers the
> pay differential is also significant. My old firm
> Kirkland & Ellis now _starts_ first year associates at
> $140,000 a year. (I was making about $170K when I
> left.)
>
> Of course you have no life, billing 2500+ hours year,
> working 8 till 11 seven days a week (this is literally
> true) and longer hours when something's happening.
> [snip]
> I reported this to a friend, who said, "Toto, I don't
> think we're at Kirkland any more. But that's not
> necessarily such a bad thing.") At Kirkland, if you
> left at 11 there were lots of people still there, and
> some of them had not gone home when you got back the
> next morning at 8.
>
> It got worse when you made partner.
>
> ====================================
> http://balkin.blogspot.com/
> Sunday, February 04, 2007
> Associates of the World, Unite!
>
>
> David Luban
>
>
> A few days ago, Brian posted here on the subject of the economics of
corporate
> law firms. Sandy Levinson responded:
>
>
>
> One may be averse to applying Marxist analysis these days, but I think
the
> relationship between young associates and their partners is precisely what
Marx
> analyzed as expropriation by bosses of the surplus value generated by
their
> workers. It's hard to feel much sympathy for a "working class" making
> $160,000/year, but, presumably, they're generating much more than that in
fees
> that are appropriated by the partners, since, even at $800/hour, the
partners
> can't generate enough billable hours to add up to their million dollar
income.
>
> I'd like to expand on Sandy's comment; I've thought for years that large
law
> firms might be one of the handful of venues in which volume 1 of Capital
applies
> in almost pure form.
>
> With overhead, an associate costs a law firm about double her salary. So,
a
> first-year associate at a blue-chip law firm who makes $150,000 costs the
firm
> $300,000. On average, first-year associates' billing rate is in the
$200/hour
> vicinity (higher in the major law firms). Thus the associate must bill
1,500
> hours simply to pay for herself. Because not every hour can be billed,
that is
> about 1,800 hours of actual work, or 36 hours per week over a 50-week
> work-year - six hours a day, six days a week. This is what, in volume 1 of
> Capital, Marx called the paid part of the laborer's day: the part of the
day in
> which the worker recoups the price of her labor-power or, in Marx's terms,
> reproduces her labor-power.
>
> The rest of the day is the "unpaid labor" generating the surplus-value
that the
> partners appropriate. Remember, each additional billable hour over and
above the
> paid part of the day nets $200 to the partners. An associate billing 2,200
hours
> a year is billing 44 hours a week (and working 53), yielding 8 hours a
week of
> surplus labor, or $1,600 to the partners each week: $80,000 each year. If
the
> associate goes up to 2,500 billable hours a year, she is billing 50 hours
a week
> (and working 60), yielding fourteen hours of surplus labor, or $2,800 to
the
> partners. Each year, that's $140,000 of profits to the partner per
associate, as
> compared to $80,000 if the associate works "only" 53 hours a week. So, the
> partner stands to profit an extra $60,000 annually by inducing the
associate to
> up her hours from 8.8 hours a day, six days a week, to 10 hours a day, six
days
> a week.
>
> Next, consider how leveraged the partnership is (that is, the
> associate-to-partner ratio). Obviously, it is risky to take on an extra
> first-year associate, who costs $300,000 for the year; but, if you have
enough
> clients to generate the work, you stand to gain between $80,000 and
$140,000 a
> year (more, if you can get the associate to go up to 12 hours a day or to
work
> on Sundays) by risking the investment on the extra associate. The most
prominent
> and profitable firms are also the most leveraged: their prominence brings
in the
> clients, and their leverage brings in the profits. Depending on whether
the
> associates bill 2,200 or 2,500 hours per year, four-to-one leverage yields
each
> partner between $320,000 and $560,000, over and above what the partner
brings in
> through her own billings.
>
> Of course, the profits per partner depend on maintaining a high
> associate-to-partner ratio. That gives the firm a strong inducement to
make it
> very hard to become a partner. The higher the firm's leverage, the more
intense
> the competition between the associates for partnership. Profits per
partner and
> competitiveness among associates rise and fall together.
>
> The easiest way for associates to compete with each other is by
lengthening
> their work-day, in an arms race that challenges what the human body and
soul can
> bear. Ten hours a day, six days a week? Why not twelve hours, seven days a
week?
> Why not fourteen? This is great for the partners, who (remember) net $200
for
> each additional hour an associate bills. Furthermore, if the associate is
doing
> more demanding work, for wealthier clients, the firm can bill the
associate's
> time at a higher rate than the baseline of $200 per hour.
>
> However, the quality of the associate's work will not necessarily enhance
her
> chances to make partner, because regardless of the absolute quality of the
work,
> the partnership needs to winnow out associates in order to maintain the
leverage
> on which per-partner profits depend. In a law firm leveraged four-to-one,
three
> out of every four associates must fail to make partner, regardless of
their
> lawyerly excellence in absolute terms. (All of this was explained years
ago in
> Marc Galanter's and Thomas Palay's path-breaking Tournament of Lawyers.)
>
> The result is just what Karl Marx predicts: the "capitalist" (here, the
law
> partner) has an overwhelming incentive to intensify and lengthen the
associate's
> work day, and put more competitive stress on the associate.
>
> No wonder associates bail out as soon as they can. Yet this has bad
effects on
> the law firms: after all, they invest a lot of money training associates,
and
> the high turnover rate is wasteful in both human and economic terms. The
firms
> are hemorrhaging young people. (There's a hemorrhage at the other end as
well,
> as large firms force many partners out in their early 50s because their
billing
> rate is too high, and the firm would rather dump them than adjust their
rate
> downward, due to the pressure that would put on its entire rate-structure.
But
> that's another story for another post.) In human terms, higher turnover
means
> lower interpersonal loyalty at large firms, which goes with lower
collegiality,
> greater alienation, greater temptation to commodify intrafirm professional
> relationships, more emphasis on the bottom line, greater incentive to
intensify
> and lengthen associate's work days, and - therefore - higher turnover.
It's a
> vicious spiral, and thoughtful law partners have lamented it for years
without
> having any idea how to stop it.
>
> Couldn't the partners simply settle for less money? The problem is that
then
> higher-paying firms will lure away the firm's stars -- their rainmakers
and the
> rainmakers' clients -- and the firm is likely to collapse. Marx understood
this,
> too; he thought it was fatuous to suppose that exploitation, together with
the
> intensification and lengthening of the work day, could be ended if only
> individual capitalists were "less greedy." Few non-Marxist economists
would
> disagree.
>
> Furthermore, as Galanter and Palay explain, there is another good reason
why
> firms emphasize profits over other values. Suppose that every lawyer in a
firm
> is asked to rank-order the top ten things he or she values about the job.
Some
> emphasize the money; some, interesting clients; some, the opportunity for
pro
> bono; some, flexible and humane hours; some, an interesting practice area;
some,
> the opportunity to live abroad; some, avoiding lots of travel; some, great
> colleagues. And so on. Money might not be at the top of the list for many
> lawyers in the firm (maybe not for any); but money will almost always be
among
> the top three or four. More importantly, money may be the only thing that
is in
> the top three for every single lawyer in the firm. That makes money the
easiest
> thing to coordinate on. The larger the firm, the harder it is to customize
a
> package for each lawyer, and the more likely it is that every lawyer will
> confront more or less the same package. You will simply not be offered the
> option of less money and more collegiality; the high-money-low-other-stuff
> package becomes the off-the-rack choice for everyone.
>
> The big, unanswered question: how long can a system with these
characteristics
> maintain itself? Indefinitely? Of course, Marx would have said that the
point
> isn't to analyze the world; the point is to change it.
>
> Posted 11:44 AM by David Luban [link] (11) comments
>
>
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