As the World Turns: Law Is Hot, Animation Is Not

Michael Borden, a first-year student at the University of Chicago Law School, has landed the perfect summer job.

In his honor, his bosses at the Los Angeles law firm of Loeb & Loeb will host a beach party--complete with a steel drum band--at Shutters on the Beach Hotel in Santa Monica. They will lavish him with private parties at their homes and dinners at trendy Westside restaurants, usher him to Dodger games, summer jazz events at the Hollywood Bowl and an afternoon outing at the Getty. Even a taping of the “Judge Judy” television show.

And on top of that, they will pay him $2,000 a week, or the equivalent of $104,000 a year.

“It’s staggering the amount of money that’s being offered,” said Borden. “I’m only 22.”

If you think Borden is getting a great deal, consider also other law students who are being paid up to $2,500 a week to work--and play--at other law firms this summer.

The hefty salaries and attractive perks are the most recent examples of how the “new economy” is driving up salaries in industries that compete with Silicon Valley for talent. Earlier this year, some law firms bumped the salaries of first-year associates to $125,000 from around $90,000 in an effort to stem the tide of defections by talented young people to “dot-com” companies.

At the end of the summer, students such as Borden typically get offers to join the firms upon graduation from law school. Many law firms can hardly wait as they face an increasing demand for legal services and a steady exodus of lawyers for technology companies.

The shortage of top corporate lawyers and a surging caseload are forcing many law firms to beef up recruiting efforts at law schools. Many firms, which traditionally hired summer associates from elite law schools and only from the second-year class, are now reaching into the second-tier of law schools to find recruits and will even consider first-year students.

“It’s a great time to be a summer associate,” said Steven Gordon, a legal editor at Vault.com, a careers Web site that ranks law firms and other employers. “The money is good, the perks are better. Everyone is waiting to see how long this can last.”

Law firms have always competed hard for top students from the leading schools. But the money and perks now being dangled in front of the best and brightest law students is raising eyebrows as well as questions about whether this is a good thing for the profession.

Martha Fay Africa, of the lawyer-recruiting firm of Major, Hagen & Africa in San Francisco, said: “Students are taking great glee in all the attention and money they’re getting, but we have to ask ourselves if this is a dangerous thing. In the long run, some firms may not be able to afford these costs and may have to fold their tent.”

Not all students at the best schools will be working at law firms this summer. A few dozen UCLA law students, for example, will be working the entire summer for $5,000 or less with environmental groups, legal aid agencies and even human rights groups in Guatemala.

“With all the money being thrown around, there is a clear disincentive for our best and brightest students to pursue public service,” said Catherine Mayorkas, director of public interest programs at UCLA’s law school. “Thankfully, there are students willing to make sacrifices.”

The summer associate program is an annual courtship ritual between law firms and young law students. Firms and students get a chance to check each other out. The summers, as the students are called, get to work alongside experienced attorneys on real cases and participate in a healthy dose of social events, including golf outings, theater events and numerous dinner parties.

But this year, the summer associate programs come amid the hottest legal market in recent memory. Transactional and antitrust lawyers are busier than ever putting together what seems like an endless stream of mergers and acquisitions. Intellectual property lawyers work round-the-clock on software-licensing deals and to patent their clients’ new inventions. And litigation practices are exploding. Law firms need more lawyers to keep this legal engine running.

Sharon Mequet, who runs Loeb & Loeb’s associate program, said the booming market prompted the firm to invite 14 summer associates this year, five more than last year. The students will report to work after Memorial Day. They’ve already received $1,000 bonus checks, a bottle of Dom Perignon and have been assigned mentors at the firm.

“We take this relationship very seriously,” said Mequet, a litigation partner at the 190-lawyer firm. “This is a chance for students to work on real projects and for us to show them the character of the firm.”

Douglas M. Young, a partner in Brobeck, Phleger & Harrison’s San Francisco office where 23 summer associates will work this year, added: “A lot is said about the wining and dining, but you have to realize that we’re asking those students to bet their 20 years of education on us. What we’re trying to do is get them to understand how important that investment is to us.”

Many law students see the bountiful summer salaries as a good way to start repaying tens of thousands in dollars in student loans.

Patrick O’Shaughnessy, a second-year UCLA law student who will work in Brobeck’s Los Angeles office this summer, said that while he is happy with the salary, he’s mainly interested in “getting a feel for the firm. I don’t set the salaries,” he said.

A classmate, Miguel Sanqui, who will work at Loeb & Loeb, said the higher salaries place more pressure on him--and other summer associates. “Now you have to show you’re worth it,” Sanqui said.

Indeed, many students are concerned that the real test comes when the social events end and when they take up real jobs with the firms, according to Lori Shead, associate director of career services at USC’s law school.

Under the new salary structures, some first-year associates can earn up to $150,000 with bonuses. But to get those bonuses, they must bill 2,400 hours a year, roughly eight hours a day, six days a week. To generate that many billable hours often means 12-hour days at the office.

“Making higher salaries does help,” Shead said, “but the question is longevity. How long will they be able to do this?”