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June 13, 2001
Lawyer Salaries Coming Back to Haunt
As
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the economic boom of the 1990s began generating mountains of legal work, law firms all around the nation took one look at the all-too-small crop of top-line associates and quickly came to same conclusion: Pay them.

Pay them lots.

Hence, first-year associates in Boston went from making a standard $90,000 in 1999 to upward of $150,000 last year.

Mary Murrane, a second-year associate at the Boston firm of Bingham Dana got a $35,000 raise last year. "I couldn't believe it," she told the Boston Globe. "I was totally shocked."

But the good times, especially in the lawyer-friendly dot-com sector, are over. And now those great salaries are becoming burdensome - for firms and associates alike, according to the Globe.

Associates are concerned about longer hours, possible layoffs, and changes to the traditional life of a rookie lawyer.

The partners running the firms face the prospect of reduced profits stemming from a combination of the downturn and a significantly higher cost structure.

So the pressure on lawyers to justify their big salaries can be "overwhelming," one first-year associate told the Globe, on the condition that her name and her firm not be used.

"If you talk to a lot of first years, they would have been much happier taking the old $90,000. People are fearful of what the expectations are. We wish we could go back to $90,000 rather than live in fear of being laid off."

Associates are keenly aware that a similar cycle occurred in the 1980s, resulting in a nationwide wave of layoffs in the early '90s.

"If it's true that history repeats itself, we could be in for trouble," said Paula Patton, executive director of the National Association for Law Placement in Washington, D.C. "It could get ugly very quickly. If there is a prolonged downturn, I think there is going to be a lot of agony."

The salary bind is especially interesting among law firms, which pay associates equally at all levels until they make partner. When first-year associates got raises, so did other associates. Cutting all those salaries, say legal observers, would be nearly impossible.

Bingham Dana associate Murrane said the higher salaries have changed little at her firm - except for her pay check, which helps with the $100,000 she owes in law school loans.

Elsewhere, associates are feeling the pressure.

"We told them they needed to work harder," said John Nadas, a managing partner at Choate, Hall & Stewart of Boston. "That's the stated expectation, which is a little more than we expected before. They understood. They are very smart people. They didn't cheer, but they understood."

Jay Zimmerman, managing partner at Bingham Dana, agrees the new salaries "put a great deal of pressure on the business of law firms." He also said they threaten to undermine the way firms nurture associates: with strong training, broad legal experience, and a long-term career view.

"The first risk is that an already difficult job becomes harder," Zimmerman said. "The second risk for associates is that they will not be given the same leeway to come in to a landscape that they don't understand and to then get experience in a number of areas so both they and the firm can determine the right place for them.

"What the increase also does is put financial pressure on firms to force young associates to come in, specialize at an early point before they have broad experience so one can justify big billing rates and get greater productivity."

To view the Globe story, click here.
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