Law firms and the JetBlue guy

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Even if former JetBlue flight attendant Steven Slater didn’t plan his famous chute-deploying resignation in advance, he seems ready and willing to exploit the moment, perhaps to land a reality-TV hosting gig. If it does turn out that his Big Quit was staged (like that of Elyse Porterfield, the “Dry-Erase Girl” whose hoax didn’t even last 24 hours), it will be a salient reminder to all of us about things that seem too good to be true.

But what’s real, and what remains, is the widespread public support these figures received and what they represent: a daydream about the courage to quit a job that treats you with less respect than you deserve. And it underlines a serious trend in the workforce to which law firms should be paying close attention. As Daniel Gross explains in a Newsweek commentary, “the poor labour market and workers’ antagonism toward employers and customers are actually connected”:

“The economy has been growing for a year, and corporate profits have surged — Standard & Poor estimates that income of the S&P 500 rose nearly 52 percent in the second quarter of 2010 over the same period in 2009. Much of that impressive growth has been driven by the remarkable gains in efficiency and productivity that corporate America has notched since the recession took hold. Last year, productivity — the ability to produce more with less — soared 3.5 percent, up from 1 percent growth in 2008 and 1.6 percent in 2007.

“Yes, companies have embraced the Gospel of Cost Cutting with missionary zeal — printing on both sides of the page, eliminating bottled water, turning off the lights. But most of the gains came straight out of payroll. Companies slashed salaries and curtailed benefits, all while asking shellshocked veterans to pick up the slack for downsized colleagues. Even as business picked up, companies have been extremely slow to hire; the private sector has added just 630,000 jobs so far this year. And when it comes to wages and benefits, corporate America’s bean counters could make Scrooge blush. Many of the firms that slashed pay or cut 401(k) matches haven’t restored them even though their balance sheets and profits are now healthy. …

“The last couple of years have been a golden era for employers — they’ve found that they can hire whom they want at lower wages, and that it’s easier to retain folks without having to boost salaries. But at some point, companies that want to grow will have to break down and hire new people, or turn part-timers into full-timers, or put contractors on the payroll. Many employers are treating existing and potential employees as if they’re desperate for work. And plenty of Americans are. But desperate times can lead to desperate measures. Push your workforce too hard without adequate reward, and someone just might tell you to take this job and shove it.”

I was reminded of this observation when reading the latest financial report from a large law firm: “Profits rose, revenue dipped at Baker & McKenzie in fiscal 2010.” I’ve seen a couple dozen of these stories in the mainstream legal press over the past few months, breathlessly announcing what amounts to the same thing over and over: firms are bringing in less money, but partners are reaping higher profits. That happy result comes from the important middle step that the headlines don’t include: “Revenues down, costs slashed in a surge of panic, profits up.”

We all remember the bloodletting committed by large law firms in the wake of the financial crisis, as staffers and junior lawyers found themselves out on the street. The firms that threw their most vulnerable over the side then are the same firms reporting rising profits now. It was ever thus — that’s how businesses work, chopping assets (including people) to ensure continued or improved profits for shareholders. But when you chop and chop, making abundantly clear that employees will always be let go at the first sign of profit trouble, then you also risk the full-scale alienation of your talent pool.

Tens of thousands of 2008-10 law schools grads are still deeply in debt and struggling to find law jobs to stay afloat, even to the point of moving to India to work for an LPO. Many law firm partners, I think, have forgotten just how frustrating and humiliating it can be to have no job and no prospect of finding one — and they never had to look for work in an economy like this, where unemployment shows every sign of becoming chronic. And to rub salt in the wound, the law firms that cast off their young lawyers love to blame the victim, castigating new grads for their “sense of entitlement” and “lack of work ethic.” This can’t continue without inflicting real damage.

There are plenty of archaic traditions in the legal profession that have no place in the 21st century. But one tradition that deserves its place of pride is the responsibility to help usher in the next generation of practitioners. The recognition that today’s juniors are tomorrow’s leaders was sufficiently widespread that firms took care of their people as a matter of course. As stewardship in the legal profession has faded, first gradually and then dramatically, lawyers’ trust in the firm and the partnership has faded with it. This isn’t just something we should feel bad about. This is a collective decision to exploit legal talent at the worst possible time.

Throughout this coming decade, we are going to see the continuous rise of lawyers engaged in legal services but employed by non-lawyer entities. Legal process outsourcers, e-discovery providers, document assembly companies, legal project management experts, legal knowledge professionals, and many other entities outside the law firm world will be hiring experienced lawyers to populate their offices. Law firms that took care of their people in the tough times will have nothing to fear; those that didn’t will be astonished and appalled at how easily their lawyers and legal professionals will be poached. Steven Slater’s real-life jump, no matter how contrived it might have been, reflects employees’ economy-wide readiness to jump from jobs that treat them as fungible, exploitable, and expendable. If that’s how you’ve treated your people, you can look forward to the day when they return the favour.

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