‘Interesting Work is a Strong Drag on Profits’

First, many thanks to Ed Philp for taking us deep into the bowels of coal-mining country. One day, when I get around to it, I’ll post about a visit a former coal-processing plant that’s been turned into the Red Dot Design Center in Essen. Most of the original machinery’s been left in place, so you walking along steel catwalks past gigantic, rusting former moronic acid catalytic tanks (or whatever they are), then enter a sort of open floating cube attached to the side of the tank, dozens of yards above the plant floor, filled with oddly-shaped teakettles or shiny, curvilinear prototype scooters from 1983. It’s weird, but it works.

Speaking of gung-ho people putting in lots of extra hours on the job, what about young lawyers working at large law firms? Every year, I see dozens of fresh-faced youngsters rejoice when they get an offer to go work at one of these places. Every year I warn them to think very carefully before accepting these offers. And every year I meet people who accepted one of those Faustian bargains job offers a couple of years ago. Virtually all of them regret it.

26-year-old lawyers making $135,000 a year come in rather low in my personal ranking of oppressed populations whose fate deserves close study, but David T. Henderson and William T. Zaring, two American law professors, disagree. They’ve developed a scientific model of why so many young associates hate their jobs.. In this paper, [hat-tip again to the Philpster] researchers constructed a statistical model to find out why so many young lawyers at big law firms hate their jobs. They attempted to measure whether the huge amounts of money these young lawyers earn could "make up" for the fact that they had to spend long hours, under a great deal of pressure, on boring, routine tasks. The result:

[A]fter controlling for all the variables in the model, interesting work appeared to be a strong drag on profits…. Thus, it appears that steering associates into highly specialized and repetitive (read: boring) niche practice may be a lucrative management strategy. Similarly, law firms seem to prosper when associates report a high likelihood of leaving the firm in the near future. Further, the results of model suggest that there is no relationship between firm profits and the providing associates with feedback, training and guidance, or a family friendly work environment. In short, if a firm is sufficiently prestigious, it appears that it can safely gravitate toward the sweatshop model.

Note that the authors are studying American law firms here. However, as the globalization of the legal profession continues, and American or British law firms continue to out-compete or take over their European counterparts, this model of legal practice will become more and more the rule in Germany. Unless, of course, people do something about that.

One thought on “‘Interesting Work is a Strong Drag on Profits’

  1. I think a very similar dynamic operates in another kind of factory-model knowledge industry – large scale IT consultancy. Large consultancies like Accenture hire a batch of new graduates at relatively high salaries then work them 80 hours a week until they drop put or burn out. They invest very little in career development – most training is strictly project related.

    Nevertheless these positions are regarded as prestigious and are sought after. They are not however a good deal for experienced people. I worked for an IT consultantcy for 2 years (one with a much better reputation than Accenture has). Nevertheless they ended up ‘eating the seed corn’. That is they worked me so hard and invested so little that I found that my skill base eroded whilst I worked for them, something which I had to repair at no little cost in time and money after I left the firm.

    Taking a little less pay to work in an environment where I am empowered to take more of the decisions rather than being a highly-compensated ‘peon’ (as IT consultants and law firm associates are) is much to be preferred.


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