California Bar Journal
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California Bar Journal

The State Bar of California


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Front Page - April 2000
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News Briefs
Election schedule set for board, CYLA vacancies
Bar court judge appointments process to be reviewed
Newest board member dies
Ventura County mobile legal center cited by ABA
ABA offers three CLE programs
Bar, Western State plan annual ethics symposium
Penalty for late bar dues moved to April 28
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Legal Tech - UM: The leading edge of convergence
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From the President - Link starting salaries with service
Easy to destroy, hard to rebuild
2 trains on a collision course
Keep the judiciary independent
Letters to the Editor
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MCLE Self-Study
Viewing the Subdivision Map Act
Self-Assessment Test
MCLE Calendar of Events
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Public Comment
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Ethics Byte - More on the written agreement
Charges of grand theft, sexual battery lead to bar hearing
Attorney Discipline


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Link starting salaries with service
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President, State Bar of California
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Andrew J. GuilfordThe hot topic on the bar circuit now seems to be California law firms paying first-year associates annual salaries of around $150,000. As I visit with bar leaders around the country, they wonder what we are thinking out here, and a parade of horribles is presented as the probable outcome of such salaries. There are charges that we are fueling greed and will be left with lower partner profits, higher hours, no pro bono work and generally more miserable lawyers. The furor may be overstated because not many firms are involved, but the resulting public debate is important and might negatively affect perceptions. I believe most commentaries on the $150,000 associate lack perspective on how this fits into a broader picture and do not focus on the core issues involved.

The $150,000 associate is just one aspect of a broader question that should be asked by bar associations, law firms and lawyers everywhere:  What is the best way to provide legal services in a world of changing markets and technologies? In this sense, the issue is thus related to other issues of the day, such as multidisciplinary practice, multijurisdictional practice, obtaining equity interests in clients, contingency fee rules, paralegals, and e-commerce and internet lawyering. The State Bar of California necessarily is involved in reviewing these pressing issues.

Reviewing these issues reveals some general principles. To begin, it is usually not helpful to take the easy step of calling others greedy. Most humans seek to sell their services and products at market clearing prices. It is more helpful to look to the market, rather than greed, in determining the causes of the price of gasoline, first-year associates and first-round NBA picks.

The primary principle in reviewing the merits of paying first-year associates $150,000 is a factor which must be considered by all successful businesses. Ironically, this factor is most important to lawyers, yet lawyers seem most inclined to overlook it. The factor is service to the customer, or for attorneys, service to the client.

Books selling the principles of successful, profitable companies almost always focus on service to the customer. One of the wonders about the invisible hand of the market is that profits are produced by responding to the needs of customers. Beyond pragmatic profitability, attention to client service has sublime significance to lawyers. As argued previously in this column, lawyers, as principal players in the Third Branch of Government, have a professional duty to look away from individual gain to a selfless commitment to clients and the judicial system. Accordingly, lawyers, law firms and bar associations have a special professional duty to review the demands of changing markets and technologies through the test of how client service is affected. Clients also should analyze the policies and practices of their lawyers by reviewing the resulting effects on client service, thereby providing the ultimate market test.

Thus, the real issue concerning high associate salaries is generally whether the benefit of service with high quality associates is outweighed by the cost to service of lost efficiencies and enthusiasm, and whether there are other ways to attract high quality associates beyond high salaries. The real issue with MDP is generally whether benefits to service such as convenience and efficiency are outweighed by the cost of unacceptable compromises to core values such as confidentiality, avoiding conflicts and independent advocacy. The issue with MJP is generally whether the service advantages and efficiencies of a broader licensing structure are outweighed by compromises in the competence of legal services provided to Californians.

The issue of alternative fee arrangements is whether the benefits of providing access to legal services for those who cannot otherwise afford such access is outweighed by possible compromises to the quality of the independent advice given. The issue with paralegals and internet lawyering is generally whether the increased convenience and efficiencies of these services are outweighed by the diminished quality of the service provided.

The bottom line, then, is client service. Focusing on this issue of client service gives proper perspective to the issue of high salaries, and all the other related issues, appropriately reducing negative perceptions. With the focus on client service, lawyers can profitably meet their professional obligations while responding to the demands of changing markets and technologies.