A Survival Strategy for First-Year Lawyers

1. A Survival Strategy for First-Year Lawyers Jonathan J. Rusch Deputy Chief for Strategy and Policy Fraud Section, Criminal Division U.S. Department of Justice Washington, DC University of Virginia Law School Charlottesville, VA March 25, 2009 Note: The views expressed herein are solely those of the speaker, and do not necessarily represent the views of any component or officer of the federal government or of the University of Virginia or any component or official thereof

2. Background • Law Practice Responses to Economy • Hiring, pay freezes • Delayed starting dates (sometimes a full year) • Pay cuts of 10-20 percent • Partners, associates • Rescission of offers (by firms and local prosecutors) • RIFS (attorneys included) and “voluntary departure” plans • RIFs: January - 1,487; February - 2,000+; March – 3,000+ (in first 12 days) • Sometimes generous severance packages (plus nondisclosure agreements and waivers of liability)

3. Background • “Why Are They Doing This to Me?” • It’s not personal – really • Economics of law practice • Focus on more profitable work • Supply of work diminished • Prevent losing partners • Overcapacity of legal staff • Reluctance to leave voluntarily slows typical attrition • Need to Focus on New Realities of Practice • 2008 was 2008

4. Components of a First-Year Survival Strategy • Professional Matters • Financial Matters • Personal Matters

5. Professional Matters

6. Timeline for Planning • Commencement to Bar Exam • Bar Exam to Starting Date • Starting Date to One Year Out • One to Five Years Out

7. Commencement to Bar Exam • Enjoy Commencement (Yes, You Can) • Your ability to affect outside events is limited • Worries about bar exam can wait – a bit

8. Commencement to Bar Exam • Key to Approaching Bar Exam • You only have to pass • Bar review courses will give you what you need to know • You only have to remember bar review material through the exam • Cultivate “bathtub memory”

9. Bar Exam to Starting Date • Take Time Off After The Exam (A Little) • You deserve it • You need it • But Then Pursue Interim Strategy for Professional Preparation and Growth • Professional development • Business intelligence • Contingency planning

10. Bar Exam to Starting Date • Professional Development • Do something law-related if you can while you’re waiting • Law review article or other legal writing • Pro bono work • Do it because it’s good for others (and for you) • Honing skill sets (e.g., brief drafting, litigation) • Note: Consult with prospective employer first • Avoid prospective conflicts • Employer may steer you to particular work • Some laidoff lawyers being placed with pro bono organizations, given stipend (far below former salary) • Don’t assume you’ll be as attractive next year as you are this year if you do nothing of professional nature • Out of sight, out of mind

11. Bar Exam to Starting Date • Business Intelligence • Your perspective has to be global • Law firms’ perspectives increasingly global • What affects other businesses/employers here and abroad affects your prospective employer • You are your own intelligence unit • Intelligence about – • Your employer • Continuing trends in legal profession and economy

12. Bar Exam to Starting Date • Business Intelligence • Be proactive in gathering intelligence • Occasional contacts with prospective employer • Don’t rely primarily on in-house contacts • Google Alerts - http://www.google.com/alerts?hl=en • Set delivery frequency • Legal blogs and newssites • Above the Law - http://abovethelaw.com/ • Law Blog - http://blogs.wsj.com/law/ • Law.com - http://www.law.com/jsp/law/index.jsp • Newswire - http://store.law.com/registration/register.asp?subscribeto=nw • Overlawyered - http://overlawyered.com/ • The Shark - http://theshark.typepad.com/ • Business publications • Financial Times - http://www.ft.com/home/us • Wall Street Journal - http://online.wsj.com/home-page (includes Careers section)

13. Bar Exam to Starting Date • Contingency Planning • Make plans in case something goes wrong with your job • Associate litigation against firms reportedly increasing • Suing your prospective employer still not best option • Consider negotiating for best deal you can get • Keep your eyes, ears open for alternatives for which you may be qualified • Geographic: Other cities/states • Private and public sectors: Government • “Find a job . . . even if it may not be what you had hoped or expected.  Get in somewhere.” (Partner)

14. Starting Date to One Year Out • What Do You Say and Do on Day One? • Make three assumptions: • Everybody knows more and counts for more than you do • Managing partner to custodial staff • Manner/attitude: You’re happy to be there • Learn (and use) everyone’s name, especially when you need help • Everyone else there is worth more than you • Your perceived marginal value on Day One: > $0 • You need to increase your marginal value ASAP • Assume economic conditions will be volatile this year and next

15. Starting Date to One Year Out • How Do You Increase Your Marginal Value? • Recognize you are there to support partners • Know what supervisor wants and check in on progress • In client meetings, don’t offer advice and answer questions posed by clients unless partner invites you to do so • Prepare to be flexible in the work assignments you take on • Especially in difficult times, partners are likely to remember who was willing to step up for less attractive assignments and who wasn’t • Broader exposure to more types of practice can help you sort out what kind of lawyer you want to be • If possible, avoid being locked into single department or specialty practice (unless very stable and growing)

16. Starting Date to One Year Out • How Do You Increase Your Marginal Value? • Like college, choose a major and minor (Partner) • Advantage to being seen as “go-to” person for more than one legal area • When you have too much work, you need to push back (professionally) • Sometimes you can be in too much demand • Can you refuse assignments that you absolutely hate? • Maybe – but be prepared to offer a really good (i.e., deeply personal) justification • Assume that one is all you’ll get in your first year

17. Starting Date to One Year Out • How Do You Increase Your Marginal Value? • Branding • Dr. Judith Sills: You are your own brand • “. . . the professional identity you create in the minds of others” (http://www.psychologytoday.com/rss/index.php?term=20080118-000009&page=1) • Branding may include – • Establishing niche expertise • Sending clear signals about key attributes (e.g., consistency, reliability, delivering on time)

18. Starting Date to One Year Out • How Do You Increase Your Marginal Value? • Branding • Look for opportunities with your employer • Write (co-write) article relevant to practice • Do bar association, trade association presentations • “You have to show what you know” (Sills)

19. Starting Date to One Year Out • How Do You Increase Your Marginal Value? • Branding • Don’t be shy about walking in partner’s/supervisor’s door (Partner) • Work at forming relationships – lunch, drop-by visits • As you get to know people at firm, they can speak to the value you add (First-Year Associate) • “Many associates get work, and good work, by taking the initiative and showing interest. Do not wait for opportunities, make them.” (Partner) • Develop “major” and “minor” mentors (Partner) • Not in your major, minor substantive areas • The more senior, the more influential on your behalf • But also harder to get on that partner’s calendar • Listen to what mentors are telling you • Guidance/business intelligence for your career decisionmaking

20. Starting Date to One Year Out • How Do You Increase Your Marginal Value? • Branding • But don’t leave it all to your employer • “For a successful long-term career, do not look to your company or industry to take care of you. As in every other arena of life, you must take care of yourself.” (Sills) • Explore topics or specialties that appeal to you • There’s always a market for good communicators • Speaking, writing opportunities • You might find something you’d like to do more than what you’re doing by then

21. Starting Date to One Year Out • Neatness Counts (Still) • Do and turn in high-quality work on time • If chance of missing a deadline, talk to supervisor first • After a bad experience with partner on an assignment, you may not be able to turn things around with that partner for some time

22. Starting Date to One Year Out • Neatness Counts (Still) • Important to stay organized with multiple projects on multiple deadlines • In a sea of emails and paper, use a RAFT • Read, Action, File, Throw away (cf. Stephanie Winston) • Online productivity resources • Lifehacker– http://lifehacker.com • 43Folders–http://43folders.com • Stepcase Lifehack–http://lifehack.org • James Fallows, Organize Your Life!, The Atlantic, July/August 2004, http://www.theatlantic.com/doc/200407/fallows2 • Your office as an extension of your brand • How do you want to be perceived by supervisors and peers

23. Starting Date to One Year Out

24. Starting Date to One Year Out

25. Starting Date to One Year Out • Don’t Forget Networking • Within employer • Mentors and colleagues • Beyond employer • Mandatory and voluntary bar associations • Specialty areas of practice • Improvements in legal system • General bar associations (e.g., ABA, state or local bars)

26. Starting Date to One Year Out • Plan What to Do When You Make a Mistake (And You Will) • Before the mistake • Let “associate paranoia” be your guide (not your master) • Get clear instructions on what you’re supposed to do • During the mistake • Don’t exceed your supervisor’s instructions • Never lie • Protect the client’s interests • After the mistake • Promptly admit what happened to the supervisor • Promptly take whatever remedial steps you’re directed to take

27. One to Five Years Out • Use Your First Year to Explore Where You Want to Be in Five Years • You are building a career • Two views of a career

28. Keswick Hall

29. Winchester House

30. Winchester House

31. Financial Matters The J-Term Course

32. Basic Rules of Thumb • Don’t Spend Up to Your Salary • Even if you make $160,000, you don’t make $160,000 • Net salary – (fixed costs (rent + loan repayments + taxes)) + basic variable costs (food + transportation) = Not as much as you think • Plan to Control Costs (Fixed and Variable)

33. Controlling Fixed Costs • How Do You Control Fixed Costs? • Rent • Think economically for first year • Think of transportation costs as part of your total rent • Student loans • Negotiate a rate you can handle in your first year • Leave a cushion in case of future problems

34. Controlling Variable Costs • Plan for Reasonable Spending and Savings • Make a budget that allows for both • Need to consider two kinds of savings • Cash savings – emergency money • Old standard: Long-term 3-6 months salary • New standard: Anything, as long as it’s regular • MetLife Study (Released March 2009): • 50 percent of Americans reported having only one-month cushion or less before they could not fully meet their financial obligations if they lost their jobs • 29 percent of Americans making $100,000/year or more reported they would have trouble paying their bills after more than one month of unemployment • Longer-term investment

35. Controlling Variable Costs • Two Basic Precepts for Investment • You can always save something • Set fixed amount each month, save automatically • You won’t miss it if you save it first • You can always save somewhere • Ultrasafe investments (e.g., short-term CDs) as well as equity • Start an IRA ASAP • Regular IRAs – tax deferral • Small amounts invested early can produce substantial long-term returns

36. Controlling Variable Costs • T. Rowe Price Chart:

37. Controlling Variable Costs • Choose a Credit Card Wisely • Pick one and stick with it • Don’t choose bank just because it mailed you an offer • Check websites for best rates, benefits (e.g., cash back, no annual fee) • http://www.bankrate.com/brm/rate/cc_home.asp

38. Controlling Variable Costs • Don’t Let Credit-Card Debt Mount • Banks increasing APRs, adding fees • Use FTC Credit Card Calculator - http://www.ftc.gov/creditcardcalculator • On $5,000 balance, at 14.99 percent, and only minimum payment each month: • $250 estimated initial monthly payment • 8 years to pay off (assuming you make no other charges and pay on time) • $1,613 interest charges

39. Controlling Variable Costs • Joan Goldwasser, Kiplinger’s Personal Finance, Washington Post, March 1, 2009: • Find a bank with fee-free ATMs • Average payment for out-of-network ATM: $3.43 • Avoid checking-account fees • Brick-and-mortar banks: Average checking-account fee - $12/month; average minimum balance - $3,500 • Free accounts available with some banks if you use direct-deposit or make 5 or more debit-card purchases/month, or if you pay online • Avoid bounced-check fees • Average bounced-check fee: $29 • Ask if bank has free alerts when balance falls to predesignated amount • Automatic debits to pay credit card • Late fees can be as much as $39/month

40. Personal Matters

41. Plan to Have Personal Life • Make Commitments to -- • Your relationships • Time for yourself and your interests • Recognize That You Create Expectations • Robert Spagnoletti, President, D.C. Bar: “If we are sending e-mails at 11 p.m., the message to our clients, and our families, is that the client can have our attention at 11 p.m.” • Keep Billables Up • You may not always (or even usually) bill the most, but the most billables won’t guarantee retention • Clients increasingly suspicious of, resentful about massive billables • The least billables may guarantee layoff

42. Plan to Have a Personal Life • Make Time for Physical Activity • Make Time for Sleep • Actively Pursue At Least One Outside (Non-Legal) Interest • Another kind of long-term investment

43. Contact Data • Jonathan.Rusch2@usdoj.gov • 202-514-0631 • Photo Credits: • Slide 28: New Horizon Wines • Slides 29-30: Winchester Mystery House, San Jose, CA • Slide 36 (Graph): T. Rowe Price