The buck — or bucks, as the case may be — had to stop somewhere. And one would expect it to stop well before Seyfarth Shaw, the lowest-ranked law firm on our LIST OF SHAME.
(It’s #100 on the Vault 100 list, but higher on the AmLaw 100 — #66.)
Recently the firm sent around a memo indicating that they won’t be moving off the List of Shame, at least for the time being. Check it out, along with our commentary, after the jump.
SEYFARTH SHAW LLP
TO: All Associates
FROM: Executive Committee
DATE: February 9, 2007
RE: Associate Compensation
Over the past few years, the Firm has redoubled its efforts to be a great place to work. There are a variety of components involved in this effort: offering a culture with a professional yet informal working environment; providing the opportunity to represent a broad and sophisticated client base; opportunities for coaching, feedback and development; and, opportunities to take on progressively more challenging assignments. We listen to your feedback and work hard to continue to improve the Firm in these and other areas. We will continue this effort because all share the common goal to make the Firm a great place to work.
Blah blah blah. What about the moolah???
We understand that a significant part of the equation is compensation. Each year, we look at our markets, analyze trends in the market and make decisions about associate compensation. In each of the last four years, we have made improvements to our associate compensation structure. As we looked at the market in December, we made two basic decisions:
• First, we have made a significant improvement to the associate bonus pool, increasing the size of the bonus pool by 19% on a per-bonus-eligible associate basis. Since we have a pay-for-performance system, we believe that this will allow us to do a better job of recognizing top levels of performance by associates. This takes effect with bonus payouts on March 15, 2007.
• Second, we have made salary scale adjustments in San Francisco, Los Angeles, Houston and New York. The factors we considered in this decision-making process included market forces, the need to be able to support growth and our current position in the marketplace. The increases this year and over the past few years have been supported in part by rate increases and in part through an investment by the partners of the Firm. Salary adjustments have not come with increased levels of billable or chargeable hours from associates.
That last sentence reminds us of this old saying: “Be careful what you wish for, you might just get it.”
In other words: “Sure, we could raise your salaries. But don’t you like seeing daylight on weekends?”
We are aware of the most recent movement in the market on associate compensation. The Executive Committee will discuss this development at its next meeting. In the meantime, we will be working to develop a deeper understanding of the market realities and the economic and cultural impact additional increases would have on both our clients and our Firm. We are not sure that further billing rate increases are appropriate this year.
We love their delicate reference to “the most recent movement in the market on associate compensation.” We wish them luck in acquiring a “deeper understanding” of the “economic and cultural impact” of paying their associates in line with the market.
The Seyfarth partners don’t think further billing rate increases are “appropriate.” And as noted above, they don’t want to jack up associate billables (or don’t think their associates want them to).
But taking higher billing rates and higher associate billable hours off the table doesn’t rule out ALL options for raising base salaries.
How about reductions in profits per partner? Might those be “appropriate”?
Nevertheless, all issues, including increased levels of expected productivity, will be part of the discussion. Our goal, quite simply, is to reach the best decision we can given all of the various variables at work. In the meantime, there will be office meetings with your LDC advisors and/or Office Managing Partner to discuss the current changes to the bonus plan and office salary scale. We encourage all of you to attend. In addition, if you have any feedback or input you would like to give with regard to these issues, please share those ideas with your LDC advisor, Office Managing Partner, Department Chair, or Judy Braun. Your input on these issues would be valued by the Executive Committee.
On behalf of the Executive Committee, we look forward to another highly productive, challenging and fulfilling year. We appreciate your contributions to the continued success of the Firm.
A “challenging” year, indeed.