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Monday May 20, 2024

Lawyering and its discontents

By Feisal Naqvi
September 21, 2023

The plight of young law graduates, and specifically the fact that they get paid very little, has recently been much discussed on social media. Since some of the contentions raised are factually valid, an alternate perspective may be worth considering.

To begin, I concede that law graduates have it rough. Yes, they do make less than fresh graduates in other fields. Yes, law firms do not offer a living wage to fresh graduates, not even the best ones. Yes, law firms ask fresh graduates to prioritize experience over earnings. And yes, law firms tend to value in-house experience differently from experience within a law firm.

Given the foregoing, many young lawyers also believe that senior lawyers act unfairly when it comes to paying junior lawyers. To that extent I disagree.

Before I elaborate, one caveat: I focus on litigation, as does my law firm. Litigation has different dynamics from a practice focused on transactional work (locally known as ‘corporate’ work).

Litigation fees in Pakistan are normally paid on a lump-sum basis. Senior lawyers therefore tend to value a junior lawyer on their ability to save the senior lawyer’s time. And from that perspective, fresh graduates are generally not very useful.

Let me try to unpack my statements above.

A lump-sum fee means that the law firm or counsel involved will get one fixed amount, no matter how long it takes and no matter how many people work on it. This is very different from the norm in the United States where law firms get paid on an hourly basis, with the hours of each lawyer being charged to the client. In that model, not only do junior associates pay for themselves but they are money makers for law firms since the firm keeps the difference between the associate’s billings and the annual salary of the associate.

In the lump-sum fee model, the senior counsel receives his/her entire fee for a case on day one. All expenses incurred by the senior counsel thus directly reduce the take-home amount of the senior counsel. In these circumstances, the senior counsel has a very serious incentive to reduce the number of associates working for him and thereby maximize his/her own income.

One may ask why Pakistani firms do not switch to hourly billing models. The short answer is that hourly billing models make sense in the context of complex litigation where large firms work on convoluted matters requiring teams of lawyers. Pakistan has very few disputes of that type, in part because our civil dispute resolution system is hopelessly broken. Here, almost all ‘high-end’ litigation consists of seeking interim relief, which in turn has a huge amount to do with a lawyer’s ‘face value’ and little to do with the quality of preparation.

What can override a senior counsel’s desire to maximize his/her own income? Well, like all sensible people, senior lawyers are happy to pay for good value. In the case of junior lawyers, that ‘value’ is the junior lawyer’s ability to save the senior counsel’s time. If a junior counsel can do work of a sufficiently high standard, then the senior counsel has extra time available to them. And extra time means (in theory) extra money for the senior counsel.

The kicker in the previous paragraph was the phrase ‘work of a sufficiently high standard’. Unfortunately, most fresh graduates are unable to do such work. Instead, no matter where they have graduated from, the ability of most fresh graduates to actually save a senior counsel’s time is minimal.

This is not a Pakistan problem: this is a universal problem. The nature of the best law schools is such that they focus on academic skills; the kind of skills that show their true worth in a decade, not the kind of skills that make somebody a great associate on day one. I graduated from Yale Law School and upon graduation, my ability to do work of a ‘sufficiently high standard’ was at par with a snowball’s ability to survive in hell. I got paid extremely well in my first job because my Wall Street firm could bill out my time on an hourly basis. But that kind of work payment structure does not exist in Pakistan.

Furthermore, fresh graduates do not become useful by the mere passage of time. Instead, senior counsel have to actively invest time and effort in training junior counsel in order to get assistance of the quality they desire. In my experience, it takes about two years’ worth of training for a fresh graduate to be worth their salary. Yes, sometimes it takes less time. But quite often it does not. And as already noted, in Pakistan a fresh graduate remains a liability till such time that they become trained.

A further problem with junior lawyers is that they tend to leave. Again, this is a universal feature of legal practice: it does not suit everyone. Many people decide after a couple of years of practice that they have had enough and would rather do something else.

In the case of Pakistan, several additional factors exacerbate the retention problem. First, those who are ambitious often feel the need to venture overseas for an LLM in order to burnish their credentials. Second, in the case of female graduates, the social pressure to get married and leave the workforce ramps up hugely after the first year. Third, many Pakistanis believe that the only real way for lawyers to succeed is to go independent and to set up their own firms. Fourth, ours is a culture where relationships are exceptionally important. When friends send children, nephews, and nieces for internships, it is very difficult to refuse. Finally, firing people is even more socially problematic than saying no. So, not only do the good ones leave but the bad ones stick around.

To summarize, a fresh graduate is a net loss for a law firm. By the time a fresh graduate gets trained to the point where they are consistently useful, many of them are either thinking of marriage, a foreign degree, an in-house job, or independent practice – all futures in which their current firm does not figure. And if a firm overestimates a young lawyer’s potential, it has limited ability to take corrective action. In these circumstances, it is eminently rational for law firms to prefer experienced lawyers who have decided that they want to stick with the law, who will be useful on day one, and who have a track record on which their potential can be accurately gauged.

My purpose here is not to justify the current situation (especially in relation to the pressures on young women), only to explain the existence of a situation which suits neither senior counsel nor junior. There may well be ways to ameliorate the problem (and I will discuss some of those in a subsequent column). But let us begin with a clear-headed analysis of the facts.

The writer is a lawyer of the Supreme Court. He tweets/posts @laalshah The views expressed in this column do not represent the views of his firm.