My co-blogger David B. mentions Dahlia Lithwick’s article on Supreme Court clerkship signing bonuses, and I just wanted to add my two cents on the question. In particular, I think such bonuses may look a little less extraordinary when placed in the context of the already high costs of attorney recruiting.
Here’s my thinking. Major law firms pay extraordinary amounts of money to recruit associate talent. Consider the lavish summer associate programs most firms run every year. A firm of 300 lawyers might have 40 summer associates, and the cost of a single summer associate — including salary, hiring costs, overhead, expensive lunches, opera tickets, and lost billables from associates — probably runs in the neighborhood of at least $75,000. A 300-lawyer firm that has 40 summer associates therefore pays in the neighborhood of three million dollars for its summer program.
What do law firms get for their three million dollars? Not much billable work, as summer associates have no idea what they’re doing. And firms don’t really get the opportunity to screen candidates, as most firms give offers to all or almost all summer associates. But they do it because it gives them a leg up on attracting lawyers after graduation: law students who enjoy their summer experience at a firm are relatively likely to sign on, and firms need new associates. So the firms pay out $75,000 per summer associate to try to persuade students to sign on.
At the kinds of firms that attract Supreme Court clerks, however, these efforts usually don’t pan out quite as well as at most other firms. The very top students at the very top schools have a lot of options, and they go back to their summer firms less often than at other places. Some go into government, others public interest law, and others may try for top-flight boutique firms that most candidates didn’t know about when they were fall 2Ls. All of which means that the price of recruiting the very best students is unusually high; if only 40% of these students come back to the firm where they summered, then the effective price of recruiting a top law student through summer programs goes up to the neighborhood of $200,000.
When you consider these numbers, I think a $200,000 Supreme Court clerkship bonus begins to seem less out of place. Clerks are usually in lots of debt, and the up-front, all-at-once cash actually does make a considerable difference to them. If the firm successfully recruits a clerk, it gets a very strong lawyer without having to pay the candidate through the summer program. And hiring Supreme Court clerks likely increases general law student interest and yield rates: students that are in the running for jobs at the firms that attract clerks are likely to know about which clerks are going to what firms. As a result, successfully recruiting clerks helps the firm attract other candidates, which ultimately leads to better lawyers at a lower average cost of recruiting those lawyers.
Anyway, that’s my best guess of how it looks to the kind of firms that are making these decisions. Am I way off, either as to the costs of the summer programs or how firms view the cost of recruiting more generally? If so, I hope you’ll (politely) let me know in the comment thread.
UPDATE: One more thought. Lithwick states that Supreme Court clerks at firms have an “unofficial” two year rule, and that many leave the firm after two years. FWIW, I haven’t heard of this or seen any evidence of this. My anecdotal experience is that most fomer clerks stay at firms for more than two years at higher rates than most associates.