Strategic Legal Technology

The Recorder 19 July 2010 article Is Adding a Second Tier for Law Firm Associates a Good Thing? asks a great question. The answer is “yes, but….”. 

The author, Justin T. Miller, J.D., LL.M., CFP®, is a regional director of the Legal Specialty Group at Union Bank’s The Private Bank. He writes

“Firms are finding that a two-tiered associate structure can be an efficient profit model in that the second tier of ‘non-partnership track associates’ are paid sometimes as much as 50 percent less than the first tier of “traditional associates,” but may be billed to clients with rates that are only 25 to 30 percent less than those of the traditional associates.”

Miller notes that multi-tier partnerships are common now but that tiered non-partner lawyers is a “recent development.” I agree. Though several BigLaw firms have staff attorney programs, these lawyers typically work only document review. Miller seems to envision a broader remit.

Such a move is consistent with Richard Susskind’s “unbundling” or “dis-aggretating” legal services (see The End of Lawyers? and the view I expressed in my post The Right Resources to Solve Legal Problems that in-house counsel must consciously decide what mix of human resources is most appropriate to work on a matter.

In concept, I think tiering associates is a great. To do it effectively, however, BigLaw needs a major “operating system” (OS) upgrade. That is, large firms would have to improve their management capabilities and approach. Here are some specifics to address:

CASTE MENTALITY. As Miller notes, “If implemented correctly, a non-partnership track associate should be considered a full-time member of the legal team.” The caste system still thrives in BigLaw and works against integrating professionals who lack the same pedigree as partners.

TALENT MANAGEMENT. Lawyer recruiting, assessment, and career management are all geared toward elite law school graduates. Who will recruit the new type of lawyer? What are the appropriate criteria for hiring? What is the career path for this new tier of lawyers? Firms would need to answer these and other questions.

PROCESS FOR DELEGATING WORK. Once on board, who allocates work to lower level lawyers and how? Partners and senior associates may (emphasize may) be good at assigning work to associates, but do they have skill, training, and know-how to delegate work “down the chain.” Doing so requires a deep understanding of the deliverables and what resources can most effectively produce them. For example, consider the common task of contract drafting. As Kingsley Martin notes in Contract Checklists-does sequence matter?, few lawyers approach contract review systematically. Without a process in place now, effective delegation is that much harder.

MANAGEMENT SYSTEMS AND GOVERNANCE. Large firms may carefully review substantive legal work but few have formal systems for consistently measuring its quality.The concept of metrics is, at best, new to large firms. So one element of a management system is developing new metrics. Another element is a way to coordinate multiple work streams, also known as project management. BigLaw is just beginning to digest and embrace project management.

So I think a successful non-partner track lawyer program will require a major OS upgrade. Firms that can upgrade their OS to manage a new lawyer tier effectively - and that includes marketing it to clients - stand to win the favor of their clients. And that should translate to market and wallet share, which is critical in the current environment.