Food for thought
On the eve of OCIP, when all of us are preparing our suits and looking over NALP for the three-week process starting Tuesday, thinking about what we will all buy with $160,000 a year, I would like to introduce you all to one concept. The concept is even more striking given the rumors of a salary increase.
It's called the rule of threes.
The rule means that you will have to bill (not just work) to earn your salary. Three times that it. To earn the $160K in a law firm, you have to bill three times that, $480,00. That's right, to earn your salary, you have to bill half a million dollars.
One third of your billing is your salary. The other third of your billing is to cover firm overhead and benefits (health insurance, subsidized gym, car service home, Blackberries, free Starbucks, office personnel, and your office rent). The final third goes to the pockets of the rich white men sitting in the corner offices.
Cheer up though. I've heard rumors that the rule is no longer rule of 3s, but is moving to a rule of 3.5-4 ($560,000 - $640,000 on a $160K scale)
So, when we are all hoping for an associate salary increase or shopping around for the firm paying the highest salaries, just keep the rule in mind.
With that said, let the madness that is OCIP begin.
It's called the rule of threes.
The rule means that you will have to bill (not just work) to earn your salary. Three times that it. To earn the $160K in a law firm, you have to bill three times that, $480,00. That's right, to earn your salary, you have to bill half a million dollars.
One third of your billing is your salary. The other third of your billing is to cover firm overhead and benefits (health insurance, subsidized gym, car service home, Blackberries, free Starbucks, office personnel, and your office rent). The final third goes to the pockets of the rich white men sitting in the corner offices.
Cheer up though. I've heard rumors that the rule is no longer rule of 3s, but is moving to a rule of 3.5-4 ($560,000 - $640,000 on a $160K scale)
So, when we are all hoping for an associate salary increase or shopping around for the firm paying the highest salaries, just keep the rule in mind.
With that said, let the madness that is OCIP begin.
posted by The Fox at 5:49 PM
3 Comments:
Well, the rule of three -- or 3.5, or 4 -- times associate salary doesn't necessarily mean that associates have to work very hard at all. After all, $560,000 dollars per year / $400 per hour = 1400 hours per year. Raises, it seems logical, either have to be paid for by the client, in the form of higher billing rates, or by the partners through lower partner draws. (Big partners are now billing $1000 per hour and making millions and millions!) Partner compensation could stand to be taken down a notch to accommodate all the essential work the associates do for them. Thus, it seems we should be moving toward 2.5x, not 3.5x! Which means it all depends on associate power and organization: Associates of the firms, unite! You have nothing to lose but your excessive billables.
I agree, raises are paid for either by the clients or the partners. BUT
1. first-year bill rate is not $400/hr (at least not in the big firm I was with this summer), and most are on the scale of 225-275, which brings the requirement up.
2. what do you think would happen if a group of associates tomorrow decided to say, we want to bill less and earn more? firm would say bye-bye and find willing new 25 year olds willing to do the work.
It's the "reserve army" of the under-employed. You've got to unionize the associates, dude. Fox, I think you're the point man on this project.
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