An End To Job Lock

The truth to me is evident.  I have met or communicated with too many lawyers who feel they cannot leave their existing practices, government offices, companies, or non-law jobs to start a firm of their own, or to move home, because of "job lock". Of those that do, I have found more than a few that try to practice part time so they can keep their other or main job.

Are they afraid of losing wages?  

Well yes, but that is not the overwhelming concern. Most believe they can rustle up some cases or business. What they do not believe they can do is either replace or afford their medical insurance.  In short, they are not working for themselves. They are working for their health insurance companies.

Where this is not the case you find too many solo and small firm lawyers whose spouses are job locked so that the lawyer can have the spouse's group and subsidized insurance coverage. In short, the spouse is sacrificing to subsidize the law practice when you think about it.

Many are just uninsureable outside of a large group policy that only big business, and in some instances Big Law, can provide. And, this lack of insureability is not often the result of major prior ailments.

Sometimes it is just age issues. I think what many people do not understand is that medical insurance gets prohibitively expensive once a person hit 55 years of age. Part of the largest block of people that are uninsured are between 55 and Medicare age.

Often job lock is just about overhead. Earnings are one thing. Overhead is another. Making your rent might be one thing, but trying to pay a monthly health insurance premium that is nearly the size of your house payment, that covers little in terms of risk, is quite another. In short, it is a lot of money, monthly, and it does not insulate you from the risk of an unforeseen injury or illness.

I run into people everyday that say the insurance for themselves is not a problem. The problem is the insurance for their dependents. Well, that is true, but the financial cost of the insurance for them is not a problem because Big Business or Big Law is subsidizing their portion. That couple hundred dollars they see coming out of their paycheck is followed up by a couple thousand dollars that their generous employers are contributing to their health insurance coverage every month.

So, the lawyer is stuck. Or, the lawyer is uninsured or under insured. The lawyer has deductibles and co-pays that cannot possibly be paid if the lawyer gets sick, especially if the illness occurs at the end and the beginning of a new insurance contract year, where that $5,000 deductible becomes the $10,000 deductible.

I think we often do not want to admit that it is health insurance, or the lack thereof, that prohibits most of us lawyers from doing what we want to do, to change legal specialties, to go out on our own, to change firms, to go full time, or to leave our jobs and venture into the practice of law altogether.

As BusinessWeek reports, there is real evidence of "job lock".  For example, Americans’ likelihood of self-employment jumps when they turn 65 and become eligible for Medicare, according to research by Robert Fairlie of UC Santa Cruz, Kanika Kapur of University College Dublin, and Susan Gates of the RAND Corporation.

Less "job lock" will create not only more jobs in business, but it will likely explode the ranks of those lawyers wanting to practice on their own or in small groups.  This is not good for Big Law because it means they will likely lose their most talented and ambitious lawyers and rainmakers. But, it is good for the practice of law over all, the the contentment of people in law, and the truth of the matter is that it is these people that are the driving engine of job growth in this country. End the job lock and you will rapidly increase wages, earnings, business and increase employment exponentially. This means more earnings, more players, more taxes, more growth, and with this a greater need for legal services in this country.

There are those out there that like their insurance coverage and have no interest or desire to see the system change. Typically, you will find that these are those that are comforted by working for big business and big law, work for the government and want to stay with the government, or are on Medicare. Otherwise they are typically younger and feel they are invincible, or generally do not care what the medical future holds for them and how to pay for it. They should be allowed to maintain their insurance. Have no allusions, however, that these people are the least bit interested in job growth, the economics of the situation, or the ability of lawyers and entrepreneur to venture out on their own. That is not their reality. It is self-centered, and it does not reflect the reality of rapidly rising medical cost, mainly because of the growing uninsured and under insured are eating through their future wages, or stagnating what they earn. These people are by and large being paid with insurance coverage, and they are comfortable with that. People who do not wish to go out on their own, where that is not a goal, generally care little for the interest of those that do.

The new so called "healthcare bill" that passed is not so much healthcare reform. This country is, for all of its tech and remedies, piss poor at managing its health care system. There is a good article or editorial on Frum Forum from Dr. Ben Maimon about this subject. What the bill is, however, is health insurance reform.

We all talk about company loyalty too much. I tend to believe there is less company loyalty by most than there is health insurance servitude. It is evident in the job lock problems of lawyers.

What we all hope with the insurance reform bill is that as it is phased in the worse abuses of the insurance companies end, the insurance market stabilizes, the risk is pooled, the pools increase to spread the risk, that the policies for the whole become more affordable and portable. No economy is going to survive with the results of compounded greed that will eventually eat up 1 in 4 dollars of our economy. It will single handedly stifle innovation and entrepreneurship, that benefits our country and the practice of law as a whole. For all of our worries about the cost of war, taxes and deficits, if people are allowed to be segmented by insurance companies, coverage lost, risk not widely pooled, and costs brought under control, all of the other problems will look small.  On the other hand, if health insurance is properly regulated, and costs controlled for the greater good, not only will the increase in earnings and jobs more than compensate for the costs associated with the start up of the reforms, but lawyers will be unchained to practice their passion.

Ending job lock a good thing both personally and professionally for most lawyers, and it is a great thing for our economy.

Comments

[Harry Styron]

Chuck,
As usual you're comments are thoughtful and fresh.

You aptly point out the loss of economic freedom and productivity caused by our unduly expensive health care system.

My three-lawyer firm with three non-lawyer employees spends more for health insurance than for rent. By providing health insurance for all employees we perhaps benefit from "job-lock," but we'd like to think that our employees would be loyal if we didn't have to pay so much for health insurance.