Op-Ed Contributor
The Supreme Court’s Bonus Babies
By DAVID LAT
Washington

AFTER the Supreme Court’s term ends this month, the nine justices will go their separate ways for the summer. A few weeks later, their 36 law clerks — the young legal geniuses who spend a year assisting the justices in selecting cases for review, preparing for oral argument and drafting opinions — will leave the court’s marble palace at 1 First Street for good.

Most of these clerks will join elite private law firms. This is not surprising, since firms entice them with signing bonuses that are expected to reach $250,000 this year — paid on top of starting salaries approaching $200,000. Thus some former clerks, in their first year practicing law, will earn twice as much as their former judicial bosses (the chief justice earns $212,000 a year; his colleagues earn $203,000 each).

These gargantuan clerkship bonuses have their critics, including some of the justices themselves. They are attacked as the private sector’s way of luring some of the profession’s most promising new members away from more worthwhile enterprises. But this is exactly backward: these outsized bonuses, while questionable investments for the law firms, are actually healthy for the legal system as a whole.

From a narrowly economic point of view — focusing on the actual work the clerks will perform, and setting aside the law firms’ quest for prestige and bragging rights — it is difficult to understand why firms fight for the right to shower 26-year-olds with cash. Clerkships tend to attract, and justices tend to hire, academic or intellectual types. Once in private practice, these lawyers typically gravitate toward more academic fields like appellate litigation (the former practice area of Chief Justice John Roberts). It’s a field characterized by relatively low billable hours and profit margins compared to, say, time-intensive trials or high-margin merger-and-acquisition work.

By virtue of their clerkship experience, clerks do have specific expertise in Supreme Court litigation. But practice before the court is, even for the most elite firms, a tiny field. Moreover, former clerks are ethically barred from practicing before the court for two years after their clerkships (by which time they may no longer be at the firm).

Perhaps the best justification for eye-popping clerkship bonuses is that Supreme Court clerkships correlate strongly with legal genius; the clerk jobs are so coveted that those who get them must be the best legal minds. The problem with this “screening function” justification, however, is that the law-clerk hiring process isn’t entirely merit-driven. The justices consider qualities other than legal acumen when picking clerks (as they are perfectly entitled to do). The former Chief Justice William Rehnquist favored applicants who played tennis. Hugo Black, who was from Alabama, had a soft spot for clerks from Southern law schools. And all the justices interview prospective clerks to assess personality fit — which makes sense, since they will be working closely with their clerks for an entire year.

For every Supreme Court clerk, there is another similarly gifted lawyer who could do law firm work just as well, but who narrowly missed out on a high court clerkship. Such “near-misses” are like generic drugs, or store-brand paper towels: they perform the same function, at a fraction of the cost. For every $250,000 Supreme Court clerkship bonus, a firm could pay five clerkship bonuses of $50,000 — the going rate — to former appeals court clerks who just missed out on clerking for the Supreme Court (disclosure: I’m one of those former appeals court clerks who didn’t get a golden ticket).

The bigger point is that even if the astronomical Supreme Court clerkship bonuses may be dubious investments for law firms, they are good news for our legal system. Here’s why: by promising clerks a financial windfall on the back end of their clerkships, firms encourage bright young lawyers — many of whom carry loads of educational debt — to render service to the court and country. The bonuses place clerks in a similar (or superior) position financially to their classmates who went directly into private practice instead of clerking for two years (the first with a lower-court judge, the second with a Supreme Court justice). The bonuses can be viewed as an after-the-fact supplement, paid for by the private sector, to comparatively modest clerkly wages (less than $65,000 a year).

The financial freedom supplied by these bonuses can allow the clerks who decide against a corporate career to move on more quickly to what truly interests them — academia, government practice or public-interest law. Law firms end up in effect subsidizing less wealthy precincts of the profession.

In recent years, the practice of law at the nation’s largest firms has become much more of a business and much less of a profession. Firms have been squeezing more billable hours out of their associates, abandoning less lucrative practice areas and showing the door to partners who don’t bring in enough business — measures that would have been unheard of in the profession’s more genteel days.

So this bizarre competition among prestige-hungry law firms to collect the most young legal rock stars actually represents a healthy check, however modest, on this profit-maximizing behavior. By harnessing irrational law firm egotism to serve the rest of the profession, enormous clerkship bonuses achieve an impressive, increasingly difficult feat: getting top law firms to contribute to something other than their own bottom line.

David Lat is the editor in chief of Above the Law, an online legal tabloid.