The other day I was with a bunch of people in their 50s who started talking about how much they were paid in their first job.
You will be familiar with the genre: “£85 a week!” “How did we manage?” “But I still felt so rich!” And so forth.
I feel the same way about what I was paid for my first junior job in newspapers. It was enough to cover food, rent in a shared house and a mostly functioning car but still seems laughable by today’s standards, even after inflation.
It seems even more meagre each time I read about the astonishing salaries big law firms are paying newly qualified staff.
Someone who was in law school a couple of years ago can now earn £150,000 (€178,000) a year at a top UK “magic circle” firm and up to £180,000 at US firms – where a frenzied hiring battle means junior lawyers can also get a $50,000 bonus if they manage to refer an acquaintance.
This has led to some understandable concerns, starting with the number of billable hours firms might demand from these lavishly remunerated youngsters, who are typically in their mid-20s.
I’ve also spoken to lawyers worried that generous referral bonuses will upset efforts to diversify a famously non-diverse profession if young associates recommend friends or acquaintances much like themselves.
But I keep thinking about another risk voiced by the managing partner at a global law firm who told one of my colleagues it wasn’t necessarily economically insane to pay such enormous salaries. The problem was, the more you pay, “the less margin for error you have” with exactly who is hired.
In other words, bringing on the wrong person is more costly if they are earning six- instead of five-figure salaries.
You would hope this would be less of a problem for big firms that train young lawyers in-house, and therefore should be able to see who among the newly qualified are worth promoting and who are not.
But external hiring is always fraught, especially in so-called knowledge work professions where competence is not always obvious or easy to assess.
The question is, could ever more elephantine salaries for relatively inexperienced people, in the law or anywhere else, skew the way applicants are hired? Does it, for instance, encourage the selection of assertive, confident, forceful people rather than quieter, shyer rivals who are nonetheless more competent?
To be specific, does it favour the world’s Daniel Lassmans? Lassman was an enjoyably cocky contestant in the UK version of The Apprentice, a series rarely short on thrusting boasters.
He lives in my memory for explaining that, although there was of course no ‘i’ in team, “there’s five in individual brilliance”. Like his.
I used to think a Lassman would get nowhere in a top-drawer professional firm. Then a hiring veteran told me that one of the world’s biggest law firms routinely asked candidates two questions in interviews: “How many colleagues do you work with at your level?” And, “Where would you say you rank compared with them?”
“They wanted to hear, ‘I’m the best’,” this person said. People who humbly, and truthfully, said that all their colleagues were very capable did not make the grade.
I find this understandable, but also dispiriting.
So how do people with a proven record of hiring well do it in fields where a candidate’s abilities are almost invisible?
Adam Moss, the widely admired former editor-in-chief of New York magazine, gave some of the better answers I’ve heard recently when New York Times podcast host Ezra Klein asked him how he chose editors.
“I listen for confidence, but not too much confidence,” said Moss, adding he was good at getting shy interviewees to relax and “a pretty good charisma bullshit detector”.
He would typically ask a series of “fairly banal” questions to see how a candidate’s mind worked. “And if I was bored, I wouldn’t hire them.”
This seems eminently sensible, as does Moss’s approval of interviewees who could tell him something exciting, or something he didn’t know, and “seemed like decent people”. That sounds like a recipe for hiring the smart, competent people I’ve been lucky enough to work with over the years. None were dull. All were generous. Quite a few were lawyers. I’m not sure if even one of them ever earned £150,000 a year. – Copyright The Financial Times Limited 2024
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