Description
Why It Becomes Harder To Lateral To Other Firms As Your Level Increases
[00:00:00] Why is it more difficult for senior associates or mid-level attorneys to lateral into other firms? When's the best time to switch firms?
What happens to senior associates is the more senior you get, the closer your billing rate gets to partners. So, the clients, let's just say, hypothetically, your billing rate is $900 an hour. And the partner is a thousand, this is just hypothetical. But the client is always going to want that the partner do the work. So when you're in a senior associate, you're competing for work with a partner.
The other thing is in terms of how partners are. Partners are paid in different ways and in different firms, but some firms, a partner might get 50% of what they collect from their uppers. And They might get 15%, others hours on their work. So if a civil partner, does $1000 dollars an hour worth of work department makes $500, but the partner gives it to you. The partner only makes $150.
As you get more senior, unless his partner's overwhelmed, the incentives for [00:01:00] the partner to do their own work with their clients, it is really against you. The reason why it's very difficult for senior associates is because the client doesn't want to pay all this money for the senior associate and not only that, it doesn't matter, 15% of 90 would be $90 plus 45, is 135.
So the point is that if there's work that requires someone with a lot of scale and is very senior, the partners prefer to do it themselves, or they prefer to give it to partners that are giving them work so that they alternatively give to partners.
The partner has to be very careful about giving out their work because it becomes a quid pro quo. When some other partner, will give them work in the future. So It becomes very difficult as you get senior to get hours. By now the firm's overwhelmed with work and so forth. They'll give senior associates hours, but for the most part, it's much harder for a senior associate.
You said mid-level attorneys, it's harder. It's actually much easier for mid-level attorneys to lateral to other firms and junior associates. But after you have one to two, maybe three to four [00:02:00] years of experience, you're presumed to know what you're doing. And so a mid-level associate might be billing out here instead of $900 an hour. Mid-level might be at $600. That's actually very palatable. And there's certain types of work that partners don't need to do. A partner doesn't want to sit down, for example, I write a memo or do certain diligence or market. It depends on the type of work, but senior associates are becoming almost like liabilities because they're very difficult to feed with work and so forth. Whereas, a mid-level associate their billing rates, not as high, and they can do work that the partners don't necessarily want to do without having to have their hours written off. So to answer your question, if you have zero to six months of experience, you're not marketable because you have no idea what you're doing. Even if you think you do, your time, you're being inefficient.
So meaning you have to learn about all this stuff for the first time. And you're being very inefficient with your time. If you have one to two years, you're more efficient. And then when you get three to four or three to five or six,[00:03:00] they're billing rates still low.
So you're going to be the most marketable at your maximum efficiency, which is three to five or six or seven. And then once you start getting into the senior level, they really want you to start bringing a business or you have to be exceptional in terms of the quality of work you're doing to get work from partners.
And there has to be because partners are not going to make as much money. They're not going to be able to do a quid pro quo and then you're going to make all sorts of problems with senior associates and most firms. Those are the main things.