March 11, 2007

A $200,000 bonus to Supreme Court law clerks for signing on with a law firm?

No. Don't be silly! That was last year's rate.

Oddest -- and saddest -- reason for paying so much, from the managing partner at Sidley Austin, Carter Phillips: "they're used to working hard. They can't get through their clerkships without putting in significant hours, so you know they can put in 2,200 hours at a firm."

Why not just buy two lawyers?


reality check said...

Most employees are expected to put in 2000 hours a year (261 days, 8 hours, two weeks vacation.) So I expect that the 2200 hours is a deliberate underestimate (lie.)

Ann Althouse said...

It means "billable hours."

Bissage said...

Do you want to know what I say to a 26 year old kid, two years out of school who never practiced law, who gets a $200,000 signing bonus to take a job that pays $150,000 a year?

I say: Good for you!

reality check said...

So how many hours does it take overall to have 2200 billable hours?

Peter said...

I think the saddest part of the story is this:

"I'm sort of glad we didn't have that kind of bonus in my day," says Tim Wu, who clerked for Justice Stephen G. Breyer in 1999 and now teaches at Columbia Law School. "Money like that leaves you no option. In my case, it would have ruined my career."

Back in the day, when I'd bill something like 2200 a year (sometimes less, sometimes more), I'd estimate my actual hours were more like 70 per week.

Ann Althouse said...

RC, the link is there for a reason. The article answers your question:

"(Billable hours are the six-minute increments by which lawyers account for their time. If the studies are right, and you must spend three hours at work for every two hours you can bill, working 10-hour days, five days a week, you'd bill between 1,500 and 1,600 hours a year. Way low. Hence the weekends and takeout and no life to get you up to 2,200.)"

Would you accept the deal of getting twice your current salary -- assuming you were already working 10 hours a day -- if it meant you had to put in 50% more time?

If that 50% more is all you have left of your personal life, it's not a good deal. Well, maybe it is for a couple of years. Sort of like a stint in the military. It could be worth it, depending on your values.

And who knows? You could get lucky. Those couple years could purge the humanity right out of you, and then it's easy to keep going and going (like those Invasion of the Body Snatcher people linked in the previous post).

SippicanCottage said...
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CB said...


(If I understand your comment correctly) This isn't a matter of work ethic or stamina; it's a matter of priorities. I used to work 60+ hours a week as a landscaper. I didn't mind because I really didn't have anything else to do. I am now a law student with a wife and a brand new child. No amount of money would make it worth being away from my family for 60 to 70 hours a week.

reality check said...

Thank you for the explanation Ann.

Here's a story that combines idiot lawyers and the daylight savings time switch.

Wade_Garrett said...

As a 3L, the associate hiring market strikes me as the most irrational, foolish, group-think-dominated labor market I've ever encountered. It makes the market for pro athletes look rational by comparison.

R said...

Speaking as a former Supreme Court clerk, it seems crazy, and it usually will be wasted money, but it isn't always.

Some Supreme Court clerks end up being good but not incredible lawyers (that would be me, before I quit law, having made partner at a big firm, to start a business). Some of my classmates who didn't pursue or didn't quite get Supreme Court clerkships ended up being more successful practicing lawyers than I ever was, and even way back then they would have been easier to recruit.

But, and here's where the $200,000 may make sense, the A Rods, the Michael Jordans, the Brett Favres of the law tend to be Supreme Court clerks. If you want to get one of those franchise players on your team, the only time they are sure to be on the market is when they come out of their clerkship, and $200,000 looks like a lot of money right to them at that stage of their life. To a firm, and especially to a big firm, $200k is chump change, and if it helps you land the leader for the next generation, it's money well spent.

It's not the resume value, and it's not the clerk head count that makes it make sense. It's the chance to get the superstar who can build the practice group that makes paying the huge bonus a possibly rational decision.

From Inwood said...

Think that some of these soon-to-be former SCOTUS clerks & their families still feel that Execs in Corporate America are overpaid?

To paraphrase the inelegant, but effective, Clinton expression: "It's the marketplace, stupid."

For those who think that the Marketplace is irrational, for class-envy types, & for those who think that the private sector should pay a higher percentage of its ill-got gains to the government, just look at this as a law-firm & ultimately their Big Oil, Big Pharma, & Big Finance clients, subsidy for a government program: SCOTUS clerkships.

Since all government programs, by definition, benefit The People & since the government cannot afford to pay these SCOTUS-clerk law school grads the same amounts as their classmates with similar law school records get, this is a Win/Win situation! SCOTUS clerks, who otherwise would’ve made prole wages for their first three years or so post-law school while working the same obscene hours, will, figuring this bonus amortized over three year, see their annual pro forma wages raised into the six figure range, making such government service less of a hardship! This will make them see the benefits of government service & not have them avoid such service for mercenary means.

(Please no posts from the irony deficient who would note that law school students are actually falling over themselves for these clerkships knowing that they are a lifetime badge of honor. I still manage to work my clerkship into conversations, just like this, many moons later.)

BTW, for those of you who think that law is a racket & that all lawyers should be forced to do real work, instead of dreaming up posts like this, I have nothing to say.

StephenB said...

Ann said: Why not just buy two lawyers?

Interesting word choice.

Adam said...

The problem I have with R's analysis is that it presumes that the superstars a firm needs are determined more by analytical merit than by business-generating ability, which involves a set of skills which overlaps with, but is not the same as those which lead to SCT clerkships.

I think about how Tom Goldstein built his practice, and it was about his business hustle, and not whether he won or lost the cases ...

R said...

Where did I say anything about analytical ability? Your average Supreme Court clerk has superior analytical ability, but so does your average member of the law review at any top law school.

Think for a second about how someone becomes a clerk. First, they do well in law school. Next, they get a clerkship with a feeder judge. Finally, they get a clerkship with a Supreme Court justice. Analytical skills count, especially with regard to grades, but it also matters that you can identify and nurture powerful mentors (professors and your lower court judge for recommendations), that you can close the sale in a face-to-face interview, and that you can make good strategic choices. Last but not least, it helps to be a dedicated hoop jumper ever ready to jump through the next, higher hoop. All of these are traits that matter to developing as a strong law firm lawyer.

Not all Supreme Court clerks are great lawyers, and not all great lawyers were Supreme Court clerks. In my experience, however, the two places I would go to look for A list talents to build a franchise around would be the body of Supreme Court clerks and the Harvard Law Review.

(BTW - does anyone know why Obama didn't clerk for the Supreme Court? In my era, at least, it was de rigeur for the President of the Harvard Law Review to seek and get a Supreme Court clerkship.)

Al Maviva said...

A friend of mine is on the hiring committee at a firm with "aggressive" S.Ct. clerk recruiting methods. (I.e. throwing buckets of money at them). He has told me that the main reason to recruit them is for marketing value - it looks good to clients who aren't terribly law savvy and plays well with other attorneys within the legal community who are prestige and credential oriented - some of those superstar ex-clerks. Some turn into good attorneys, there's no way of knowing if any of them will be great, however. He also tells me that few of these clerks remain practicing lawyers for very long, preferring an easier life of teaching, or journalism. His description of the average S.Ct. clerk's ratio of work ethic to job expectations is considerably less charitable.

SippicanCottage said...
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hdhouse said...

reality check asks..."So how many hours does it take overall to have 2200 billable hours?"

hmmmmm 2200 divided by 15 mins/1sec...rounded up.....hmmmmm lotta lawyers I know could do that in say 14 weeks or so give or take...depends on research, travel time, some phone logs, hall conversations....a few 12 hour days....creative rounding..

I'll say what I've said before on here...the basic premise that a lawyer (in degree only) fresh out of school is worth 150k is laughable...a clerk may be different due to connections etc. and certainly that "experience" but...

won't do me much good to argue upstream on this blog.

hdhouse said...

R said...
To a firm, and especially to a big firm, $200k is chump change...."

That is my point. From one side of the table 200k is "chump change...a rounding error .... moring coffee pot money"...

Yeah right. Don't forget how it got there. I have attorneys who range from 3-600/hr depending on who does what. If I felt they had so much padding in the bill that they could squirrel away 200k on some potential hotshot putz with a resume but no real world experience...I would want 300-600 of my hours back.

R said...

"Don't forget how it got there."

It got there because they worked for it. They delivered services where small differences in quality matter a whole lot in ways that can be demonstrated, and they got paid accordingly.

If you think your attorneys are padding your bill and not delivering value, change firms. There are a lot of good lawyers out there.

As for it being chump change, do the math. Take a firm like Sidley with 1300 lawyers, and maybe 400 partners. That's $2000 a piece out of their million plus annual earnings to bring in someone who might be the firm leader in the next generation. I wouldn't sweat gambling .2 percent of my annual earnings to pick up someone who might be a franchise player, and I bet you wouldn't either.

They won't lose much money on the clerk. They will bill them out at several hundred dollars an hour, keep them for a least a couple of years, and even at those nosebleed salaries, break even quicker than you think.

If you want a purer example of where Supreme Court clerk appreciation is irrational, take a look at law schools. Law firms pay a hiring bonus based on clerkships, but I can assure that they don't limit the firm hierarchy to former clerks, and they will happily fire a clerk who isn't doing the work. At top law schools, by contrast, a Supreme Court clerkship seems to be an all but mandatory ticket for getting hired. I have a friend, way smarter than I am, who publishes relentlessly in good journals, and is the leading guy in his field. He teaches at a second tier law school because, what with working his way through law school, he didn't do law review and didn't do any clerkships. To top academia, that still matters. That's absurd. The same law schools that wouldn't talk to him, an accomplished and serious scholar, were happy to talk to me when I flirted with teaching because my friends were doing it, although I have neither the vocation nor the temperament for being a research academic.

While private firms are making a calculated gamble in paying up for clerks, they aren't that crazy. They are competing not only with other firms, but with talent oriented businesses like hedge funds, investment banks and consulting firms like McKinsey. They will pay to get people in the door, but once in the door, it is performance that is going to matter.

R said...

Correction on the math - at a firm Sidley's size, it would be $500 a partner, for a whopping .05 percent of annual partner revenue per partner assuming a million a year PPP (I believe Sidley is actually more like $1.2 to $1.5 million PPP, but it doesn't matter.)

Adam said...

R, your point regarding SCt clerks being able to "close the sale in a face-to-face interview" is well-taken, but you're not hiring the clerks to woo clients (for a few years, anyway) -- their job is to write really well and help win the appellate cases they're not conflicted out of handling.

And, yes it's true that it's not a lot of money on a per-partner basis, but neither are a lot of things which firms could be doing to improve retention and morale (if they were so inclined).

Obama didn't clerk because Obama didn't want to, is the story. He wanted to get back to Chicago and into meaningful practice. I also don't know why you'd focus on HLR folks to the exclusion of Yale and Chicago, especially Chicago folks who are plugged into the FedSoc/conservative appellate judge network.

From Inwood said...

Once there was this young [prestigious] lawschool grad who was "brilliant but...."

Whenever clients, especially less-than-brilliant clients, seemed unimpressed with his advice, other lawyers, especially lawyers from certified prestigious law schools, routinely defended him with the robotic "He's from [prestigious] law school".(It was a kind of reverse Faulty Towers "He's from Barcelona").

It's called "credentialism". As some have noted on this thread, in the long run, results count. Of course. But in the short run, job applicants from certified top tier law schools find it easier to get hired & partners find it easier to "sell" a credentialed young 'un to clients. A SCOTUS clerkship goes a long way, methinks. Wish I'd had one. (Envy.)

R said...

Adam - The "closing the sale" aspect matters because what they do for you years down the road is what justifies the expenditure. No one, not even a Supreme Court clerk, is worth what a big law firm pays them the first couple of years out. To some extent, as noted, firms pay that much to show that they could attract them (sort of a good looking date syndrome applied to business). More pragmatically, they pay that much in the hope that the clerks will mature into prodigious rainmakers and incredibly gifted lawyers. The goal is to have them, when they are 40 to 50, throw off tons of money to increase the take home of the guys who hired them, who by then will be sixty and at the top of the firm's pyramid.

Think of it as being like a $200,000 signing bonus for a hard throwing baseball pitcher coming out of high school. They may never make it to the majors - they might blow out their rotator cuff, they might discover recreational drugs, they might not ever develop a big league curve ball. All the same, paying that $200,000 signing bonus gets the organization first dibs at that particular prospect. You aren't paying them that because of how many games they will help you win in AA ball (work which is infinitely more important and interesting than the work a former clerk is likely to see first year out). It may not be the best possible way to do things, but given the importance of talent to law firms and baseball teams it isn't totally whacko either.

As for why Harvard and not Yale or Chicago (and I went to none of those three law schools) - in my limited, anecdotal experience, the nonclerk superstars I have known have disproportionately been members of the Harvard Law Review. Yale is not oriented to private practice - kids self select Yale because they want to teach or perform service after spending three years in a noncompetitive, intellectual atmosphere. It's a small school to start with, and with the draw off to academia and nonprofits there just aren't that many Yale Law grads fighting their way to the top of big law firms. Chicago is a very good school, but no better than Columbia, Stanford, Virginia, NYU, or half a dozen more I could name. Much as I sympathize with the Federalist legal philosophy, I haven't seen that predict success in private practice. Even in the city of Chicago, U of C grads play a prominent but not a dominant role in law firm leadership. This is all from anecdotal observation, and your mileage may vary. There are certainly great U of C lawyers out there.