Updated on July 8, 2015
The business of law: Knowing the basics can advance your career
Yesterday’s New York Times contained an eye-opening article about law firms’ responses to recessionary pressures.
Over the 18 months, corporate leaders reeling from bleak economic times instructed their legal departments and other divisions to reduce expenditures. Armed with this directive, in-house lawyers called upon outside counsel to pass on fewer costs and to provide more affordable legal services.
Law firms listened to their corporate clients and took measures to ensure that increased efficiency did not jeopardize their budgetary goals. Associate attorneys took a hit, as many firms laid off associates and reduced pay and bonuses.
In this cost-cutting climate, it’s more important than ever for law students to understand how the business of law operates and how to successfully navigate that first foray into the professional world.
Recently I’ve read several chapters in “From Finals to the Firm: The Top 10 Things New Associates Need to Know.” This 73-page booklet contains more than its share of good advice for law student contemplating law firm careers.
In light of the new realities described in the Times article, it’s wise to understand guiding principles of law firm economics. As stated in “From Finals”:
“[Y]ou must always do your best work, but it has to be within the resources the client can afford or is willing to spend. In other words, you have to do your best work in the amount of hours, given your billable rate, that the client can afford or that the client is willing to pay.
As a summer law clerk or new associate, you are likely to receive assignments without the benefit of extensive background information on the case. You may be asked, for example, to draft a memo explaining the legal obligations of a corporate client with respect to a new administrative regulation.
Before you launch into the project, you must understand a number of things, and primary among them in this economic climate should be—as labeled by the “From Finals” authors—Key Cost Constraints.
In a nutshell this means, “What are the client’s expectations regarding the scope and cost of this assignment?” A supervising attorney will know how to answer this question, and it’s the responsibility of a law clerk or new associate to ask.
Asking that question demonstrates business savvy. Asking that question shows that you’re thinking like someone who has legitimate aspirations of being an owner of the business, an equity partner. And asking that question goes a long way to ensuring that the firm’s client will be satisfied, the bill will be paid, your “client” (the assigning partner) will be impressed, and you will continue to receive good work.”
Todd Rogers, Assistant Dean for Career Services