During the blur of on-campus interviewing, it often seems like all law firms are alike. In fact, there are distinct differences between firms. Unfortunately, the distinctions are not always apparent until after you start working and comparing notes with your friends. The variations between firms are not necessarily good predictors of whether the firm will be successful, but they can be excellent indicators of whether you will enjoy working in a particular environment. There is no foolproof way to determine all of the characteristics of the firms, but here are some questions that you may wish to ask yourself, and the firms, to draw out the unique qualities and their importance to you.
Questions to Ask Yourself
1. Do you prefer to work on many different projects at once, or to work on one project for longer periods?
Some firms tend to have very large projects that last for long periods; other firms have more, smaller projects. A large litigation case can result in a lawyer spending years working exclusively or nearly exclusively on one project. Working with many small clients can require a lawyer to bounce rapidly from one project to another. Would you find working on one matter for a long time dull or comforting? Are frequent interruptions by clients calling with questions a break in the monotony or stress inducing?
2. Do you thrive on the excitement of putting out fires, or do you prefer a steady, reliable schedule?
This question can be useful for helping select a particular area of the law. While any client-driven business requires immediate response to some problems, certain areas, such as litigation and securities, are much more likely to have frequent “emergencies” than areas such as estate planning.
3. Do you prefer to seek work out, or would you rather have work assigned to you?
Some firms will assign you to projects, whereas others encourage you to seek out your own projects. Which approach better suits your personality? In an entrepreneurial firm, you are more likely to succeed if you are a self-starter. In a very hierarchical firm, the same traits may rock the boat.
4. What makes a case or transaction interesting to you? Is it the size of the deal/dispute or the novelty of the issues involved?
Some people would prefer to do a complex transaction for a small client while others prefer any transaction for a marquee name. Some attorneys prefer “bet the company” situations, while others find comfort in lower stress situations.
Questions to Ask the Firms
A. Stability of the Firm
Almost every lawyer dreams of landing the big client, and having a large client is often very rewarding, both professionally and economically. Focusing on particular industries can be very effective for building a practice. However, if much of a firm's business is dependent on just a few clients or a few industries, the firm faces much higher risk. Any economic downturn affecting the clients or industries will have a large impact on the firm. Firms that depend on just a few clients are particularly at risk because something as simple as a merger or change in executives at one company can undermine the stability of the firm.
Firms that target only one or two industries can suffer if those industries change. The most stable firms have strength in multiple areas so that weaknesses in one sector of the economy are offset by growth in another. For example, when securities slows, bankruptcy may be busier.
Stability of the firm is also affected by who has the bulk of the firm's practice. If just a few lawyers control most of the firm's work, a departure by those lawyers can destroy the firm. By contrast, if most of the firm's shareholders have an independent practice, the firm is much less likely to be impacted by the departure of one lawyer or even a group of lawyers.
Finally, stability can be affected by the relationship between the firm and its most senior or retiring partners. It can seem premature to worry about how the firm addresses retirement before you have even begun employment, but these arrangements can affect your salary as a beginning lawyer. Some firms have large buy-outs or offer large guaranteed payments to very senior or retired partners. Such payments can strain the firm's financial health and prevent the firm from properly compensating younger lawyers. (It is not safe to rely on promised payments from your employer as a means of funding your retirement. If anything happens to the company, your retirement fund evaporates.) Most firms permit lawyers to self-fund their retirements using qualified retirement plans such as a 401(k). These self-funded arrangements present no strain on the firm's finances and enjoy considerable legal protection. However, even if the firm has a qualified retirement plan, determine whether it has any significant obligation to senior or departing attorneys.
B. Approach to Growth
Some firms use a boom/bust approach to growth, growing rapidly when times are good, but laying attorneys off during leaner times. Other firms are more conservative, growing more slowly as client needs demand it. Still other firms grow through acquisition or merger with other law firms. While this latter approach can rapidly increase revenues and firm size/capacity, it can have significant effects on firm culture and camaraderie, as well as more practical matters like overhead costs and client conflicts.
There are a wide range of ways to structure a law firm in terms of management, delegation, distribution of power and decision-making authority, etc. Some firms operate like a corporation, with one key leader and/or a board making the majority of decisions. Strategy is set at the top and pushed down to departments and individuals. The upside is a single vision and direction; the downside is that there is little opportunity for input from individual firm members. At the other end of the extreme are firms that apply a very decentralized approach, with each individual shareholder having more or less an equal say in the firm's growth. While this allows the lawyers to have more of a voice, it can be a very disjointed approach and frequently results in glacially slow decision-making as the group attempts to reach consensus. Still other organizations utilize a "star" system, with a few key rainmakers influencing decision-making in the firm.
Some firms, including Fredrikson & Byron, apply a blended approach. Our Board sets big-picture strategy and delegates power to department chairs to shape and implement it, with input from individual department members. In addition, practice groups and individuals have the ability to approach the Board with ideas about growth opportunities, new clients or areas of practice, etc. Often this input helps us to shape or redirect our strategy, and it allows all firm members to feel like they are part of the process.
Many firms are organized like a pyramid, with many young associates and comparatively few partners. Other firms have a more vertical structure, with approximately the same number of lawyers at each level. In the business of law firms, this is called "leverage." Firms with lots of associates and few partners are said to have more leverage than those with lots of partners and few associates. Highly leveraged firms often have a high volume of commodity work that needs to be done inexpensively, so it makes sense to have that work done at low rates (i.e., by junior associates). Routine work may get pushed down to those associates who are expected to produce a lot of hours, often with little or no direct contact with the client they are working for. This can lead to low satisfaction and high burnout and turnover.
E. Compensation Formula
Some firms share salary information internally; others do not. Some use lockstep methods for compensation; others use factors such as hours billed, practice size or seniority. Ask about the method used and consider how it will affect you. For example, will you prefer the predictability of a lock step system or would you prefer a merit-based system? Does the compensation system use "carrots" to encourage certain behavior or "sticks" to discourage it? Which approach do you prefer?
Consider how the compensation formula will affect your behavior and the behavior of others. For example, Fredrikson & Byron has a relatively low par, 1775 hours, and pays associates a bonus for every hour by which they exceed this requirement. People outside the firm have often asked if this creates pressure on associates, but associates at Fredrikson like the system because it is flexible. If you work the stated par of 1775 hours, you have met the firm's expectations. But if you work harder, either because you choose to or client needs require it, you are rewarded for that effort.
Finally, ask how compensation is handled in a bad year. Some firms borrow money to maintain salaries, which carries obvious risks. Some compensation systems are self-correcting while others require the firm to manually re-adjust compensation if finances are unusually good or bad. During a bad year, such discussions can be quite contentious.
F. Becoming a Shareholder
All firms have varying expectations about who will become shareholders. Some firms use associates primarily as a source of revenue, with very little expectation that many associates will still be working at the firm after four or five years. Other firms view associates as the future and hire with the expectation that every associate has the potential to become a partner. The philosophy of the firm has a major impact on how associates are treated.
Firms also have a range of expectations on what an associate must do to become a shareholder. Partnership may seem far off, but understanding the firm's approach to adding partners often reveals a great deal about the work environment.
G. Happiness/Job Satisfaction
One of the most important questions is whether the lawyers at a firm enjoy their work. While stories of unhappy lawyers may be the norm, there are many happy lawyers in the world. As you interview, it is often helpful to determine why people choose to leave a particular firm. Was it something specific to the firm, or a general displeasure with the private practice of law?
Attorneys who have changed firms, often called laterals, can offer unique insight into the differences between firms. Seek them out and ask them to compare firms. Determine which firms draw attorneys from other firms and which do not.
Finally, it is quite common for lawyers to change practice areas over time, either as the lawyer's interests change, or because economic forces require it. Determine whether the firm provides any assistance to lawyers who seek to change the emphasis of their practice.