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Starting this fall, Howrey will begin selling recruits on a new program at the firm in which associates will spend their first two years serving as "apprentices" before taking on significant client work.
As part of the two-year program, associates will spend the majority of their time at the litigation-heavy firm attending training seminars where they will learn the practical skills of lawyering, said managing partner Robert Ruyak in an interview.
During their first year at the firm, associates will take classes on legal writing and research and will work on pro bono projects to give them hands-on experience without charging clients. In the second year of the program, associates will be embedded at client sites for several months at a reduced billing rate of between $150 and $200 an hour. They will also continue to take classes on litigation skills such as trial tactics, cross examination, and mediation and arbitration.
Howrey started working on the program about two years ago when the firm decided it was going to move away from lockstep compensation for its associates. (In January, the firm did away with its lockstep model for associates, instead paying them based on measured levels of competency.) To hammer out the details, Howrey hired a consultant and discussed the program with partners and associates. The firm announced the change to partners in a meeting at noon and to associates in a meeting at 2 p.m. today.
Ruyak compares the new program to medical residency and accounting secondment, in which younger accountants are placed with clients for a period of time to learn how their businesses work.
"The old model is broken," Ruyak said. "You're bringing on these extremely bright individuals and letting them waste their careers buried in documents where they aren't really learning the practical skills it takes to be a lawyer."
The firm will be recruiting a smaller class this year, he said, with the goal of making sure that the associates who are hired are joining the firm for the long haul. In the first year, the firm will hire 20 associates and then bring on another 10 from judicial clerkships or from U.S. Attorney's Offices during the second year. "Clerkships and the U.S. Attorney's Office are great because you're learning how trials work. You're learning what the rules are," Ruyak said. "But there just aren't enough clerkships to go around because there are only so many federal judges. This allows us to give associates the experience they need in a much more organized fashion than the way most firms use younger lawyers."
Ruyak said the firm plans to pay associates slightly more than the $80,000 or so they would be making as a clerk but less than the $160,000 many top law firms currently pay. From now on, when associates join the firm, they will be paid $100,000 in salary with an additional $25,000 to, in most cases, help pay off loans from their last semester of law school. During the second year, that amount goes up to $125,000 with an additional $25,000 bonus if they finish the program successfully. Ruyak added that the firm will not be changing any other pay levels.
The reduced pay will also have the benefit of "weeding out the lawyers who are only in it for the money and not to be trial lawyers," Ruyak said. The people hired under the apprenticeship program will report to the firm earlier than usual, in September 2010, for orientation and training.
While associates will be paid less in their first two years, Ruyak said the new approach is not a way to save the firm money. In fact, he said, it's going to cost between $3 million and $4 million to implement once training costs and the unbilled hours the associates work are thrown in.
"The way we see it though is that it's going to cost more in the beginning because we're creating something from scratch, but once we get going and we start having a group of young, experienced lawyers coming out ready to handle client matters, we're going to turn a profit much more quickly than we would under the old model," Ruyak said.
He said that the firm would spend that same amount to train associates anyway, only it would be spread out across seven years. "This way, we just get it out of the way in the beginning."
So far, clients have responded to the change positively, Ruyak said, and many have offered to have first- and second-year associates join them for a few months to learn the ropes of their business. He says the firm has also been speaking with federal appellate judges about having associates serve as extra clerks with them for several months.
Ruyak said that it's easier for a firm that does primarily litigation to implement an apprenticeship program, but he sees it as the future for the profession. "Law firms are way behind on this kind of thing. Other professions like medicine have been doing this for years. The way we have been doing things simply doesn't make sense."
