I’ve been a lawyer for a month and a half and every month my firm gives out a detailed income statement. It shows how much it costs to have us and how much we bring in. I’m routinely netting a loss for the firm. I try not to get too down on myself but seeing it every month is starting to get to me. I guess I should reach out to partners to see if I should be worrying about this, but it seems so embarrassing. Anyone experience this in the same stage of career?

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Don’t believe the garbage that firms feed you about associates not being profitable for years. They want you to feel indebted to them. Associates are profitable once the first or second collections come through. OP’s not profitable yet because the firm hasn’t collected anything. Next month or so, OP will be in the black.

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My rate as a first year is $450 if that helps.

Management knows that there is a learning curve and that they need to pour knowledge into you before you will be worth it. They take this gamble with every new hire. That’s part of the business. However, shame on your bosses for not telling you this. My bosses were good about telling new people to focus on learning and that they would tell them when to worry about profits.

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You’re a month and a half in. You’re an investment. You likely won’t be profitable for a year or two at least.

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This. I was told by my firm’s managing partner that they don’t realistically plan to make profit off someone until they are two to three years in.

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It’s weird they give this info out unsolicited to a new associate. In any event, as others have said, new associates are long term investments and aren’t expected to be profitable immediately. If you’re concerned about it talk to one of the partners and hopefully they give you these same reassurances.

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I’ve heard it takes up to 3 years for most firms to begin profiting off a new associate.

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Aa2 I know … was agreeing with you.

I’m the youngest one at this firm by almost a decade, so I genuinely think they are good people but they’ve just never taken on someone right out of law school and didn’t realize how much time it would take to train me. They shouldn’t have hired me, and now they are confused why I’m not regularly billing a ton of hours. It’s alarming how much I haven’t learned since being here. Everyone is so wrapped up in their own work

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Agreed with SA2. Let them go extinct.

Bill all your time. Make your billables. Allocate your day. Your job is to make the billable hours. It's the firms job to turn your hours into revenue and get compensated. It takes a while to ramp up, charge hours, bill for those hours and collect. At first they might write off some of your hours, but that is totally normal. At $450/he they need 500ish hours to break even on you (guessing-ish). Point is bill your time. Even if your effective rate per hour is only $225, they still profit off you after 1000 hours or so.

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UPDATE: was told that my hours were concerning in November as they thought I didn’t have enough work. As for operating at a loss partner said they expect that from me, but if it keeps going it’s cause for concern.. beginning to think I’m at the wrong firm or that litigation just isn’t for me

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Bull crap like this is another one of the many reasons I'm glad I left the practice.

Routinely? As in your first month? Give it some time and you’ll be fine

likefunny

I started in August as well and this will probably be the first month my billables would make me profitable or break even, assuming the partners don't mark down my time to far...

Toxic af

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Most first years aren’t profitable. Don’t sweat it.

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After a year in my last law firm, they gave me a similar analysis. 80% of my time was on a plaintiffs action that hadn’t even go to deposition yet but instead I got a “tsk tsk you need to work saturdays now” speech

Was gone within 2 months

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Do they give it to you alone or publish everyone’s data for everyone?

helpful

I worked at a firm where they published everyone’s hours monthly. It was great actually as it let you know if everybody was slow or if it was just you and if you were unusually busy it gave you confidence to turn down extra work. Getting your information in a vacuum is designed to freak you out.

OP you’re not really supposed to be profitable outside of doc review until year 2 or 3 so don’t sweat it as a first year.

likefunny

You’re a month and a half in. Your aren’t routinely doing anything. I’m sure even experienced attorneys net a loss at first.

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Don’t feel bad or let them pressure you into more than you are ready for, but it might be worth having a conversation with a partner or senior associate you trust about what all you are supposed to be billing. Everyone says “bill everything” but in my first 2 months I left time on the table for not realizing how much to bill for certain tasks.

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Also it’s pretty easy to add up your expected time in a year to see if you are profitable. Most first years are profitable even if not massively so.

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Most likely you will not be profitable for another 2-3 years. And if that doesn’t happen, I think that‘s on the firm, not you.

Also, not sure this needs to be said but you should never cut your own hours. You are learning and you are not expected to be efficient. Let the partner deal with it.

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What kind of firm does that?? And on another note, a lot of practice groups/areas take a while to get juniors staffed up because of the training involved. Don’t even look at that nonsense

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UPDATE: got a new job at a real estate closing firm that is really focused on training me up.. plus it’s more money so everything has worked out!

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Awesome news. Many congrats!

I was told that for my first year, I'd be a liability for my firm. They charged $150/hr for my rate. Your job is to learn, not make money for the firm. Don't let it get to you. If it truly is bothering you, ignore the monthly statement or talk to someone and explain how it makes you feel. This place could be toxic or they might not be aware of how it affects you. We're all motivated by different things. Some people might find it helpful to understand where they stand with the firm, you don't. That's ok.

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Give it at least 6 months. You will be “profitable” but in the meantime just need to get to know people and to develop an internal reputation at the firm. If you have capacity get involved with writing articles or BD.

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