Why is it that people/partners always say they typically lose money on associate until year 3. If a first year associate receipts are 3x the salary I don’t see how the firm is losing money.

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Are you speaking about yourself? If so that’s nice for you but I don’t think most first year associates’ cash receipts are 3x their salary.

Overhead is very expensive. Office space, software and database licensing, paralegals, assistants, discovery attorneys, marketing, etc.; it adds up to a lot.

Don’t know if you were but you shouldn’t discount lost partner and senior associate time spent training a young associate. That’s often time that doesn’t get written off because it’s never billed in the first place, but it’s time lost that could have been spent making money billing on another matter.

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Also to assist with partner opportunity loss I had suggested and set up a system where anytime I interrupt a partner or other associate for advice or to pick their brain - I copy my billing entry for the conference with the matter number into an email. I send them our weekly so they can recapture that time if they wish. For a quick question they usually don't track it themselves and I don't use matter numbers in conversation, so it was really appreciated - especially for non-equity partners whose hours are still judged.

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Just looking for more insight as to when an associate becomes profitable

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Overhead / lost partner and senior associate time training and redoing junior work / having to write off time because you know the client won’t pay for it

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I understand writing time off but when the receipts are 3x the salary (not the billables), I would think there is some profitability. I must not understand how expensive overhead costs really are (things that should’ve been taught in law school)

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I’ve never gotten that either.

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I think it’s just something that is generally said but has not been proven.

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Idk my partners always tell me associates are always profitable so I haven’t heard that

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