Notice how they tried to keep it secret:

"Recipients can read this message, but cannot forward, print, or copy content."

Good thing there is print screen.

Good thing there is print screen.

I'm not a Dechert associate but I fit the backwater description. It's insulting to think that we somehow bring less to client services. We're just not glamorous. Doesn't mean we don't deserve to be well compensated. AAARRGGGH!

Dechert,
Please hire tier 2 grads. We're hard working and loyal.
Loyola 2L

I'd chew off my left nut while avoiding any gratuitous mouth to genital stimulation in order to get a Biglaw job.

Oh yeh, WGWAG!

You know, lots of people actually end up getting good jobs out of a Tier 2 school. Maybe the problem is you?

I think Dechert's move makes sense and should be adopted by more firms. I work in the securities litigation dept of a top ten NYC firm and I find it both strange and demoralizing that our estate planning associates are making as much as those of us who actually work past 6 pm.

I haven't done any research, but I'm guessing Dechert's memo reflects that every non-FSG associate graduated from a Tier 2 school, while the FSG associates graduated from Tier 1 schools. Why did Dechert feel the need to ensure that the non-FSG Tier 2-graduating associates would feel like second class citizens? Didn't they realize we feel like that anyway?

11:27. I think you should be careful about knocking estate planning folks. You'd really be surprised at what they bring in, especially in terms of business they spin to other groups (such as securities litigation when some rich old guy that is a client happens to need you, or his company does).

However, I agree that there are plenty of groups with lower rates. I know what I bill, and it's definately in the top half at my firm. The problem is this. If you're working longer, then you should have a higher bonus. The way you fix it is to give discretionary bonuses based on profitability to the higher grossing groups, and link bonuses to hours, instead of the flat class wide bonus.

I think it's good they're recognizing. But i dislike dropping salaries, it's a giant f u whereas, at least psychologically, different bonuses make more sense. A bonus is supposed to be based on profitability anyway. And the NY firms must leave the classwide standard bonus structure...

If the issue is time in the office, why not compensate through an additional bonus based on billables.

The amount of rain a specific group generates is completely out of the hands of associates. This differentiation in pay is more of a punishment for the other groups than a reward for those lucky enough to join the right team.

Revenue by group varies each year, and all this does is create resentment between associates. If you want to reward some groups over others, do it in bonus not base.

Loyola, take your schtick to a new blog. You are obviously starved for attention after being passed up by all of BigLaw.

I looked at the stats for your school. If you didn't realize the huge risk you were taking by going there, it's your own fault.

11:19 - 10% is hardly lots.

lol @ 11:27

If anyone should make more money, it should be the IP attorneys, especially those that actually had to earn an undergrad degree, like an engineering degree, instead of those whose curriculum included writing a whimsical paper or two and smoke dope the rest of the time.

More than 10% of Tier 2 grads get jobs at big law firms. You have to consider what market they are looking for jobs in as well. Boston is a buyer's market: more lawyers than jobs. NYC on the other hand is a sellers market: plenty of people from New York Law or Brooklyn Law get biglaw jobs.

That being said, maybe you should have worked harder first year ;)

Tax associates should make more. Most of them have to go pick up an additional LLM degree.

yeah, but tax associates don't generally bill as much.

Listen, folks, it is a fact of life that people with different skill sets are compensated differently. This has been, and continues to be, the model in the corporate world, and law firms are slowing catching up. I am an associate at Biglaw and may be shooting myself in the foot, but the amount of money we get paid for the level of experience we have is staggering by any comparison. Granted that investment bankers get paid as much (or more) in base salary, not to mention huge bonuses, but that is that particular industry. Before we start comparing ourselves to investment bankers, we should also see what Engineers get paid or most corporate (non-officer) executives get paid.

I am not an FSG-type, but it makes sense that they would get more than their counterparts in other practices if they bring in more revenue for the firm. Ask anyone at GE Capital what they get paid in comparison to GE Power Products. GE Capital is a lot more profitable and compensates its employees accordingly. GE Power Products is not as profitable and compensation reflects it. It does not matter that employees at both organizations work very hard! This is a simple, cold truth of business. Why should we expect firms to act any differently.

Up to now, we, as attorneys, were, and continue to be, compensated at obscene rates in the eyes of our clients, particularly given our level of experience. Though I am a grateful beneficiary of the recent raises, they make no sense to me. Firms are shooting themselves in the foot. They are not getting more value for their additional dollars - they are just paying more for the same thing, and it is not external competition that is forcing them to do that. Firms stand on top of the legal food chain and get their pick of 1st year associates. Any competition within the industry is created by frenzied need to continuously try to out-increase their competitor's salaries - it is a circular proposition that will eventually lead firms to start laying-off associates to reduce their expenses if and when the market slows down.

tax associates bill a lot in NY.

If the issue is time in the office, it makes a ton of sense to compensate via bigger bonuses.

What do you do if the issue is recruiting (which is what the Dechert memo alludes to)?

9:05 -

Seriously, what firm are you a partner at?

As a former Dechert associate, I can assure others that many of the associates who are getting screwed here are from Tier 1 law schools. Interestingly, many of the FSG associates are not.
The litigation associates work just as hard as their FSG counterparts, bill just as many hours at similar rates, and do as top quality work, if not better.
For the securities litigation associate who thinks this is a good idea - I would note that if you were at Dechert, you would NOT be getting this raise. The raise is limited to the FSG associates - i.e., the associates who bill hour after hour editing boring PPM's and prospectuses - not the lawyers doing the high profile securities enforcement work or even the hum-drum defense of securities class actions.
I find it interesting that Dechert feels it has to make these changes to be competitive in the market for FSG associates when it laid off 8 FSG associates in 2002 because there wasn't enough work.

How draconian!

9:05, I couldn't disagree with you more. It is true that there is only a relatively small group of lawyers/students that these law firms "cherry-pick" from, but once you reach that level, these firms are all competing over the same similarly qualified applicants. People that get offers from a Vault 10, 20, or hell even Vault 100 probably had at least one other offer, often times many more than that. We cherry-pick our firms just as much as they cherry-pick us, and salary is clearly going to be a factor. Firms don't raise employee compensation so they can win the big-dick contest with the firm across the street, they do it to keep us from going across the street. It makes perfect market sense. Firms aren't shooting themselves in the foot--they've been doing this for a long time, and if it was going to hurt them more than not raising, they wouldn't do it.

Reading this board has been really instructive for me, as a general counsel. Over the years, I have hired lots of firms (and fired a few for poor service), I agree with 9:05.

Although it is important to train them, junior associates are not worth what anyone pays them. Firms that don't write off the bulk of first-years' time, rather than trying to make everyone profitable the second they walk in the door, are shooting themselves in the foot.

I recently fired a BigLaw firm essentially for overbilling. They were unyielding in their refusal to staff the matter (it was a massive lawsuit) intelligently or to police associate, paralegal and admin abuse of car services and meals. I am not a meanie, having been a BigLaw associate once myself, but I refuse to pay for someone's dinner or car home when they spent less than an hour that day on my matter and chose to do so after 7 PM. Repeated polite requests for explanations were met with a variety of hostile responses, and it wasn't until I became nasty and demanding that the bills were reviewed and presented more reasonably. I will never hire BigLaw again unless the litigation is so enormous or specialized that I have no choice, and even then, I will continue to read every line in every bill until I am certain I am not being cheated.

The level of anger and entitlement at BigLaw is astonishing -- associates who think they deserve higher starting salaries than 95% of Americans will ever earn, just because they went to Tier 1 schools and work long hours, and partners who think that they should never have a year in which PPP don't increase. My general impression is that smaller firms provide much better service at a fraction of the price.

Would you unimaginative lemmings quit using the "shoot themselves in the foot" cliche?

Then go take an economics class or two.

PM -

No need to get nasty. St. Cheryl makes some valid observations from a different standpoint than most of the posts on this blog. Rather than merely criticize, what would you have people say instead of "shoot themselves in the foot"? "Injure themselves by not taking the long view"?

I think Dechert's split between FSG and non-FSG makes sense given the market. Look at what Dechert's biggest competitor in the investment management space (Ropes and Gray) is paying non-NY associates. It would seem Dechert is trying to keep its FSG associates from jumping ship to a competitor.

PM is right. If I had more time, I'd write out an economic explanation of exactly why firms that do this run the huge risk of shooting themselves in the foot.

I think most of the people that think that the salary differential is a good idea either have a very large sense of entitlement, or are assuming that the status quo will continue forever.

The FSG group may be fantastic now, but 10 years later the landscape might have changed drastically. Many firms grew an incredible amount during the takeover wars of the 1980s - before then, that area of law was much sleepier. Basically, changing associate salaries will:

1) shift more eggs into one basket
2) piss people off

In the words of Justice Jackson (I believe) : merely the fact that a path is beaten is evidence to take it. If other law firms follow suit - it might be evidence that this is a good way to go. I just don't see that happening.

What St.Cheryl and many others (especially law firms) seem to forget is that Associates are NOT all Fungible Billing Units (admittedly, some are).

Take associate A, a third-year associated with an english degree and no business experience. Compare A to B, a second-year associate with an MBA and 10 years management experience.

Well, you can't really compare A to B, because you have to take into account the nature of the legal work. For litigation, B's MBA and management experience could be useless.

So, my point is that the move by Dechert is a step in the right direction, but the law industry is a long way away from what it should be. Probably the most enlightened law firm is Jones Day, who participates in the lockstep idiocy only long enough to hire law grads.

Pay should be based on performance, every firm should define performance any way they want, and associates should be allowed to bargain for their salary. B should be able to bargain for a higher salary then A if B's skills are more useful to the law firm then A's.

The result will be more diversity in the marketplace, with people gravitating towards areas where they have expertise (and can make more money). This will also benefit clients, who can then find law firms who more closely match their needs.

Maybe a firm with associates who all are ex-healthcare industry (but not from "prestigious" law schools) could serve hospital clients better and cheaper?

I hope that we continue the trend away from lockstep salaries. Only those who are truly FBU's need the protection of lockstep salaries.

Those of us who have something to offer besides a beating heart, ten fingers, and a J.D., will be better off.

Not at Dechert- How is Ropes and Gray Dechert's "biggest competitor" in IM in DC when all their work comes from Boston and the attorneys there who actually practice it are a fraction of the size of the group at Dechert, or the groups at any of the other law firms who do any IM work in DC?

3:14

That's all well and good, so long as one group (which is paid at a much higher rate, and thus, in law firm parlance, is valued much more highly) enlists the aid of another group (which is paid at a much lower rate, and thus, in law firm parlance, is valued much less than the other) to do its work, or at least to assist it in its representations. It is at that point that your argument breaks down. And if you don't think that there are litigation associates consulting, assisting, drafting, reviewing, and otherwise being involved in matters outside their group, you either don't practice law, or YOU are an FBU, with no value to anyone outside your own family.

No offense, that's just how it is. I suspect that you don't practice, or at least you're far, far removed from litigation practice, because if you think that an MBA and team management experience is likely not as valuable -- let alone more valuable -- to a trial team as someone without an MBA, you're on crack. Not that there's anything wrong with that, of course.

I mean, I suppose you COULD be right, if the type of litigation you're talking about is defending DUIs. But that's not exactly the type of practice or firm we're talking about, now is it?

Dechert's move in DC was clearly an emergency action to avoid a mass exodus to its main competitors like Wilkie. What is interesting is that it will hurt Dechert in recruiting associates out of law school in the future since they are not competitive for FSG associates at that level. Basically, Dechert will have to build its FSG practice purely on laterals.

The static economics make support creating such a pay differential within Dechert's DC office. But that ignores the negative dynamic effects that such a caste system will likely have on the productivity of Dechert's other DC associates.

I would like to be a fly on the wall at Dechert's firm social events. Will Dechert be serving FSG associates fine wine and expensive appetizers while serving its other associates RC Cola and Funyuns?

NB:

I meant, "so long as one group does NOT enlist the help of another group" ... Because if and when that DOES happen, that's when your argument goes to hell.

Will you stupid fucks stop responding to the troll?

Did Dechert go to $160K in DC? If so, do their FSG associates earn MORE than $160K?