Skaddenfreude: S&C Says, “Charney Who?”
Sullivan & Cromwell has followed suit. It has tried to distract everyone from the train wreck called Charney v. S&C just announced raises in base salaries for its associates. And its 2007 summer associates will share in the loot, too.
Here’s the memo, from firm chairman H. Rodgin Cohen, which was just sent out by email:
SULLIVAN & CROMWELL LLP
From: Cohen, H. Rodgin
Sent: Tuesday, January 23, 2007 3:59 PM
To: *Associates.Worldwide
Cc: Shenker, Joseph
Subject:
We are pleased to announce that, in addition to the bonuses awarded to lawyers at the end of last year, which ranged from $30,000 for the class of 2005 to $70,000 for the class of 1998, the Firm will be increasing associate compensation retroactive to January 1, 2007.
The new salary range will start at $160,000 for the class of 2006 and move up to $310,000 for the class of 1998. In accordance with our usual practice, each associate will receive individual notification of her or his salary.
In addition, annual base compensation will be increased to $160,000 for new associates arriving with the 2007 incoming class. The weekly compensation for the 2007 summer associate class will also be increased to be based on the new starting annual salary of $160,000.
The Firm is committed to rewarding our lawyers for their contributions to our continued success by maintaining compensation levels, including year-end bonuses, at the forefront of peer firm compensation.
Rodge
Update: According to this comment, the compensation figures for S&C’s most senior classes are as follows: class of 2000, $270K; class of 1999, $290K; and class of 1998, $310K. These amounts are higher than Simpson Thacher’s: class of 2000, $265K; class of 1999, $280K; and class of 1998, $290K.
Earlier: Previous announcements of law firm associate salary increases (scroll down through “Skaddenfreude” archives)
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I told you the other day, this is just a Biglaw plot to distract from Charney!
You're not "at the forefront" of compensation if you're a bloody follower...
"$310,000 for the class of 1998"
does that include the $30k/year harassment bonus?
This is more than a match. S&C saw it and raised: '98 is $20K higher than Simpson or Paul Weiss. Wonder what that means for the mid-level classes.
I'm pretty sure it would have been cheaper for S&C to settle with Charney...
Looks like this increase is firm-wide, for all offices....is that right?
Charney is on paid leave, right? I wonder if he will get the increase, too.
Cravath too
This appears to be the first memo to officially acknowledge an increase in summer associate compensation as well....
Charney is on paid leave, right? I wonder if he will get the increase, too.
Yes, firm-wide. I heard the news from a non-NYC friend.
Cravath
Is it just me or are the letters getting better and more detailed as each firm announces.
Unfortunately this one lacked details as to mid-level associates.
As to whether S&C is firmwide, look at the "to:" field in the memo.
I'm all for everybody getting paid more, but if these raises are country-wide, what is anyone's incentive to stay in NYC with its higher cost of living, other than liking it here? Shouldn't NYC office salaries reflect the higher cost of living?
Is that all? I was hoping this dominoes game wouldn't end quite so soon today...
Imagine making 160K+ in S&C's Sydney office. Goodness.
California firms are lagging in salary DESPITE the high cost of living in places like LA and SF...
True, but on the other hand, imagine it in the London office. Badness.
While the cost of living is certainly highest in NYC, it's not THAT much higher in places like Los Angeles, other parts of California, and Washington, DC.
Rents and real estate is certainly lower, but if you want to live in a nice house relatively close to the city, it's still not cheap (like it would be in Houston or Charlotte).
Thus, I think it's hard to justify paying NY associates a higher salary AND higher bonuses if associates in other offices bill the same amount of hours on average.
I'm sorry, but the legal services of an associate in a big firm in Los Angeles are not worth $25,000 less a year than a similar associate in NY. Most of the time, the associates in LA or DC have the same Ivy League credentials. If anything, the clients are the ones who are hoodwinked into paying the higher NY billing rates.
>>Shouldn't NYC office salaries reflect the higher cost of living?
No, unless the NYC office's work is harder/greater than other offices.
Otherwise, the greater "cost of living" is paid for by the benefits of living in NYC. Further, these attorneys are highly-mobile and educated professionals who choose where to live and work. It is more than fair to see them reap greater financial benefits for living in cities with fewer ammeneties (and lower costs of living).
How does everyone think the LA market will shake out? Gibson Dunn, O'Melveney, Latham? Do you think they'll stick to their $135,000? They could also raise to $145,000 preemptively, trying to set the LA market rate lower before it goes higher.
As to whether S&C is firmwide, look at the "to:" field in the memo.
As a recent lateral transplant from LA to NYC, I can tell you that it is THAT much more expensive here. I am paying the same amount of rent I paid in LA for a much much smaller apartment and even taking into account the higher wage my firm pays here relative its other offices, AND taking into account the money I don't spend on car payment, insurance and gas, I am still spending more per month than I did in LA.
WSJ Law blog is reporting that Cleary has matched as well
WSJ Law blog is reporting that Cleary has matched as well
WSJ Law blog is reporting that Cleary has matched as well
WSJ Law blog is reporting that Cleary has matched as well
Man. The Texas office associates at these NYC firms must be salivating right now.
Imagine a 3L with a Weil offer (if they match) in Houston, Dallas or Austin with $160,000 to blow. He/She could walk into a mortgage broker's office right now and by a 2200 square foot house in the city.
Cleary and Milbank have matched. We're having some server problems, but we hope to post the memos on the main page shortly.
Milbank matched
Has anyone heard if Cleary matched?
Anon 5:15, 5:15, 5:16 and 5:18 try a little restraint.
To the person who thinks lawyers are highly mobile, what about that thing called the bar exam?
Yeah, the person who thinks employees shouldn't get a COLA of sorts is somewhat crazy. I mean, a friggin big mac costs twice as much in Manhattan as elsewhere. This isn't about them choosing to be in a city with "amenities."
Tokyo is (arguably) more expensive than Europe (except for Moscow) which is more expensive than most places in Asia which are more expensive than anywhere other than New York which is more expensive than anywhere else in the English speaking world.
Shorthand: your American currency is shit.
London is way more expensive than New York.
London gets a huge cost of living increase.
imagine being on $US160 in the sydney SC office? well i am thinknig of buying real estate in the US cos of the shitty USD and the exhorbitant cost of living in sydney and london.....a ride on the A-Train costs a dollar or two, a one stop ride on the london tube costs three times that....NYC is as cheap as chips compared to both sydney and london ....
agreed - london is out of this world expensive. sydney, where i was born and raised is more expensive than NYC, apart from the highest end real-estate. your average harbourside / beachside 4 bedder is USD3-4 mil now. combined with tax rates equivalent to the US, or more, you aint makin bacon working at the apparent dream job at SC, Skadden Sydney ....
tokyo, moscow - pretty reasonable if you avoid the expat traps ... big ones that they admittedly are ...
What kind of expat packages do these big firms offer for their London offices?
why is it that people think that any other firm has "matched" this? all of the other memos say 15k across the board. sullivan's memo above means it will be a 15k bump at the junior end and a 45k bump at the senior bump. as far as i can tell, no firm other than sullivan has said they're giving any class a raise that exceeds 15k. am i missing something?