3:39: congrats!

Any firm that pays for its management listen to this garbage goes on a permanent List of Shame.

IOMA,

"Beg the question" does not mean "raise the question," you ignorant money-grubbing philistines.

How about a CLE for in-house lawyers , "Strategies to Attack Law Firm Rates that Drain Company Profits"?

This is evil. (And it does come with CLE credit, apparently.)

Here's her (the presenter's) website:

http://www.lawpeopleblog.com/

She does allow comments, but screens the first one. So save your fat bitch SA stories 'til your second go-round.

The fat bitch was NOT a SA!!!!!

LEARN HOW TO READ, YOU MORON!!!

They're on to us! Lat, we need you to host a strategizing session for how greedy associates can extort more from these greedy partners. STAT!

This commentary was very funny. The ad itself was ripe to be ripped -- thanks to ATL for stepping up to the plate and doing so.

Frick Lat... you ought to be charging dues for all of us appreciative associates.

This is cute, but better still would be for Lat to attend and give us the "who's who" of attendees!

Oh, and also let us know if they have a theme song!

As a partner at BIGLAW the point is not that I have to fork over 50K/person out of my 3 mill+ salary ; the point is that first year associates who don't know jackshi* are not even close to being worth 160K that we have to pay them...

Then don't pay them 160k and see what happens. That will let you know how much the market thinks we are worth!

This has got to be a joke. No one earning 2.5 million a year could possibly consider complaining that the *primary source of that income*, i.e., associates, drain a whopping $40,000-$70,000 out of that haul. No way.

In fact, learning that our current compensation rates take so little out of partners' paychecks tells me there's plenty of room for associate pay raises.

Hey Ricky Tan... you're obviously not a partner making 3 mil... you're probably some shithead working in solo practice and your just bitter at the people who come straight out of law school and make more than you...

If you are a partner, then stop being a fucking hypocrite... cause I'm sure whatever you were paid as a first year you weren't worth either.

The premise that partners are "forking over" money out of pocket is laughable. PPP is those $2.4 million a year firms is increasing steadily. At worst, this is a $40-70k hit per partner out of their annually increasing PPP. And, I'd argue, the $2.4 million reflectes profits that should have been associate comp expense but for the greed of the partnership in not raising associate salaries to match the percentage increases in PPP over the relevant periods.

NY Partners to $2.55k!

er, $2550k

As a 1st year, Ricky, how much were your loan payments? How many hours a day did you work? How often did you have to check your Blackberry? How much was your rent?

My answers:
$1,800/month
12-14, on average, plus 8-10 on weekends total
constantly
$2,500, so I can live somewhat near to work. In a 1BR.

Big Law firms meet on strategies to reduce compensation for their employees? Agree not to compete on wages? Sounds like an anti-trust violation.

Go Lat!

I think this has been discussed before...

If you want to attract "top talent" and not pay them the market rate... then give them less hours to work. I think that's the trade off... obviously firms are never going to do this... so just shut up, pay us, and realize the reason you can pay your child support and alimony is because of the leverage you gain from us.

Ricky Tan kiss my ass.

ATTENTION BIG LAW PARTNERS - I will accept less pay for fewer hours

Didn't the partners also tell clients that the money for associate pay raises was coming from increased rates charged to clients?

So which is it - is it coming from partners' pockets, or from clients' pockets?

ATTENTION BIG LAW PARTNERS - I will accept less pay for fewer hours

ATTENTION BIG LAW PARTNERS - I will accept less pay for fewer hours

So if I understand this: representatives of several large law firms, all of whom are competing purchasers of the same talent (i.e., us), decide to get together and hold a meeting to discuss ways to reduce the amount they pay for that talent.

Seems to me like there ought to be a law against this sort of thing.

I think John Sherman is right... somebody should do something about this and sue these guys.....

If only we knew some lawyers....

maybe law firms are exempt, like Major League Baseball

What I'd like to know is if there is anyone out there who would accept less pay in exchange for fewer hours worked. I'm just trying to get a feel for the market now, so feel free to remain anonymous. Anyone? Anyone? Anyone?

*shakes fist at 4:06 John Sherman*

God, where is Loyola 2L?!?

You idiots really don't get it. You are just the hired help. You don't have any clients or any real responsibility. If they could replace you with monkeys they would.

I can't wait for the market downturn just to hear all the crybabies on this site have to deal with layoffs. Only then do you realize how worthless you are and how thankful you should be.

4:21

I'm a 3L at a T-14 school... I think it's pretty clear that a lot of people (myself included) would take less pay if it guaranteed less hours.

Let's be honest, for most people 160K is a ton of money... even if you have lots of bills etc. So I think the opportunity to take even 100K if it meant a meaningful reduction in hours would be welcome by some. Those willing to work the long nights/all-nighters/weekends deserve the 160K, but I think a lot of people would be happy with a tiered pay structure based on hours worked.

You're all getting away from one of the main points. It's bad enough partners are greedy, masochistic and out of touch with reality. It's also bad that associates are greedy and/or debt-ridden and entitled and/or sycophantic martyrs. But here is a presenter who not only can see through both groups of idiots but plans to make a profit for doing so.

What a disaster big law is.

It really would be interesting to know which firms were represented at this joke of a conference...

I meant sadistic (not masochistic). Don't take one obvious mistake and jump all over it.

1800 a month in loans? 2500 for a 1BR? 14hrs a day, + 10 on weekends?

Dont work in New York. Make almost the same $ in Texas or some place and have more $ (sure there's compression, but you wont be at your NY firm in 4 years anyway). There's nothing prestigous about reviewing documents 14hrs a day and on Saturday afternoon.

ATL should attend the event and interview the attendees to find out what firms they come from.

DON'T DELAY--SIGN UP TODAY FOR JUST $295. IOMA SUBSCRIBERS PAY ONLY $265.
AND--when you register for the audio conference, you can purchase a CD recording of the session for only $99 more!

Also see our program entitled:

IOMA AUDIO CONFERENCES:
STRATEGIES TO ATTACK $99 CHARGES FOR CDS TO PROGRAMS YOU PAID $295 TO ATTEND THAT DRAIN PARTNER PROFITS

4:29, let me suggest humbly that as a law student, you don't know jack. student loans, high cost of living in nyc, blah blah blah. T-14? Pfffft. That must mean you are 14th. Go back to Georgetown and take the Law of 24.

I agree.... ATL needs to be at this event and find out what firms were there... then these firms must immediately be put on a permanent list of shame.

It's an audio conference so the blood sucking partners can remain anonymous

Dear, oh, I don't know, all of you:

Complaining that you deserve more money because of your debt is financially idiotic. You knew when you went to law school that firms paid 115 or 130 or 145 depending on the market. You choose to go to law school and endure the expense to earn that salary. You can't say that you deserve more money after that. The only actual incentive it should be is to drive intelligent people to go to law school in the first place.

Now, that being said, certain firms must maintain the highest compensation to get the most qualified people that have already chosen to go to law school. However, if every firm magically cut starting salaries to 100K for first years, they wouldn't hurt. Becuase first year work is for monkeys, and they will find enough qualified people out of the first year monkeys to make second years, etc.

Yea, yea, yea. I know. "Bullsh*t, if they did that, i'd just go to an investment bank or something" No, you wouldn't. Some of you would, but not all of you, there aren't enough jobs for all of the over-enrolled law school students.

Face it, we need them a lot more than they need us. If it was the other way around, we would all just hang a shingle and start our own practice.

I really hate to say all this, as an associate, but it's true...

Dear, oh, I don't know, all of you:

Complaining that you deserve more money because of your debt is financially idiotic. You knew when you went to law school that firms paid 115 or 130 or 145 depending on the market. You choose to go to law school and endure the expense to earn that salary. You can't say that you deserve more money after that. The only actual incentive it should be is to drive intelligent people to go to law school in the first place.

Now, that being said, certain firms must maintain the highest compensation to get the most qualified people that have already chosen to go to law school. However, if every firm magically cut starting salaries to 100K for first years, they wouldn't hurt. Becuase first year work is for monkeys, and they will find enough qualified people out of the first year monkeys to make second years, etc.

Yea, yea, yea. I know. "Bullsh*t, if they did that, i'd just go to an investment bank or something" No, you wouldn't. Some of you would, but not all of you, there aren't enough jobs for all of the over-enrolled law school students.

Face it, we need them a lot more than they need us. If it was the other way around, we would all just hang a shingle and start our own practice.

I really hate to say all this, as an associate, but it's true...

4:37..

"Pffft"?

I realize that students have a variety of costs, however, what is wrong with leaving it up to them to decide whether they want more hours/money or less?

Different people can budget differently. I was simply responding to the question posed by BigLaw Partner. I did not say that the entire system should be changed to less hours/less money, nor did I say that that would necessarily be a good thing for everyone. But not everyone has student loans and some people budget differently than others....

Finally, I find your "suggestion" pretentious... even moreso given your prefacing it with "humbly".... so allow me to kindly suggest that you go fuck yourself.

Can someone explain the Ricky Tan comments?

LAT: On ATL, there is constant discussion about which firm is paying the most, which is why it is surprising that there has not been a more meaningful, in-depth statistical comparison among law firms. Can we get a post on minimum billable hours? Only then can we determine who actually pays the most. For example, if one only works 55 hours/week on average and makes $140K ($49/hr); s/he is doing better than someone that works 70 hours/wk and makes $160K ($44/hr). We can factor in bonuses afterwards. Some of us are looking to get the most bang for their buck and a post on minimum billables/quality of life would be helpful.

I would definitely take less money for less hours, but only the big firms get the interesting work.

Assuming 4:21's question was genuine, here is my honest response:

Many people would consider lower pay if it really meant a lower level of hours. The problem is that while this is a nice theory, it doesn't seem to work well in practice. At my former firm, associates could go to 80% (80% of their salary for 80% of the pay). While firm management signed off on this deal for the interested associates, it was the associates' responsibility to tell the partners they worked with (and who often still gave the same amount of work to those associates as full pay associates). So then the 80% associate had to be really aggressive about managing his or her workload, and no one wants to have the reputation of the constant whiner ("I'm doing more work than I am supposed to"), quitter ("I'm supposed to be able to leave at 6"), or person to say no ("I can't take on any more work because I am part time."). Moreover, client emergencies don't fit well into the 80% mold and shirking that work makes one a bad attorney. Plus, these associates felt that other associates resented them when the additional 20% of work was passed their way. Finally, many of these associates ended up working 100% of the minimum billables, and even when they received bonuses for doing so, were compensated at lower levels than they would have been if they had taken 100% of the pay. (The problem with that last bit, in my opinion, is that few firms are ok with only reaching the minimum -- most "full time" associates bill way more than the 1900 figure these firms print in their recruiting brochures.) So, from what I've observed, the two-tiered system of pay within one firm ends up being more demoralizing than helpful.

Some firms can bill themselves out as lifestyle firms that pay less for better working conditions. But, the only fair and workable way to set up a multi-tiered system within one firm is through bonuses. Ideally, bonuses could be given quarterly, or semi-annually following reviews. That way, you can have a set base of compensation, and high billers can earn more by working more.

4:45 is a partner in disguise

4:21

I am currently looking to leave my law firm to find something that will allow me to work less, for less pay. I am in a 145 market, and I will happily go down to 130 or 125 if I can get a reduction in hours. The extra 8-12K after taxes isn't worth my entire life, I'd like part of it back. And I don't think i'm alone.

I make $185k at BIGLAW now and would be more than happy to make this salary (inflation adjusted of course) for the rest of my life. I honestly don't care about pay increases or boats or million dollar houses. I am quite confident that making more money will do nothing to increase my life satisfaction.

What I need is more time. So I will likely leave this job in the next several years simply because I don't have a chance to enjoy my life.

So let me second that: ATTENTION BIG LAW PARTNERS - I will accept less pay for fewer hours

I am both 4:45 and 4:52 ... and not a partner.

lat, this is too good to miss, go and let us know!! Also, come to "itsfirstfriday" at union pub 221 mass ne. Lots of respectable republicans and a couple congressmen will attend. Meet your readers!

I think I'm going to sign up for this thing. I bet it will be crawling with babes.

4:46

An excellent point. Let me tell you my situation.

Graduated 2001. Got fucked at moderately biglaw for 4 years. went in houzz. Now make $125K in NC. No billable hours, plenty of job autonomy. I'm in the office around 40 hours a week, but obviously dick around (as evidenced by this email), so true "work" hours are around 30.

By the more conservative scale: $60/hr in cheap cost of living NC. On the liberal scale: $80/hr. Plus I get free tickets to sporting events and can booze with clients for free.

And--I spend every night I care to with my wife and toddler.

It can be done. Greed is NOT good.

This thing has antitrust violation written all over it.

I make $230k, I don't live in NYC, and my mortgage is currently reasonable. I'd happily take a pay cut for lower hours and a less stressful way of life.

But it would need to involve guarantees that I wouldn't actually end up billing almost as much as I currently do. I've seen plenty of part-time associates go far over their pro-rated hours.

4:32-- Sadly, everyone knows that first year 14-hr doc review is way more prestigious, as long as it takes place in Manhattan. Everywhere else is just Local Counsel.

Great post!

It's a shame this is an audio conference so you can't attend just to see who shows up.

I work at a big firm and am pretty certain no one here would be interested in taking law firm management lessons from these folks.

4:46 and 4:49 - Both good points.

In Houzz and lovin' it - I'm in your situation (though graduated in 2000 and stayed in-house for six years...long enough to pay off the debt and put a nest egg aside). Now, my total bills are equal to a quarter of my bring-home each month and though I'll probably never see that 2.5 million at the end of the road, I have weekends and evenings off and get to actually TAKE my vacation and when the work load is slow, I don't have to stress not having billable hours. Plus, I have much more job autonomy and breadth of cases (not as much narrow specialization as in a firm) and when I am overwhelmed with work...I call outside counsel.

Stayed at a lawfirm for six years I meant....

Guess that's why they have that preview option???

not all of us can do in house, and it isn't all that desirable if you're unlucky to work for an "enron" and can never work again.

Does anyone else think this "teleconference" smacks of the beginnings of an antitrust situation?

thanks, 5:17.

You know, the interesting thing is, I used to bill insane hours just like many of these folks. Now, it's 5:30 EST and I'm emailing from home. Not from a work account, not from a blackberry...from home. I left at 5:15 because I wanted to. There is a greater chance of the sun rising in the west than there is me spending one second working this weekend.

One of my closest Virginia law school friends is on the partnership track at the biggest of BigLaw--he is one of the few. The other four guys who graduated in our class and went there are all gone. He's a close friend of mine. But he's a miserable fuck. And every time I see him, he gets that smirk on his face, like he's making $250K and I'm making half that, and one day he'll be making 2 million and I'll be a pauper and all this shit.

But he never sees his kids. His wife probably hates him. He had to convert from Reformed to Orthodox Judaism to get one day a week off. And in the end, the worms will eat him all the same.

I've eaten at the finest restaurants in New York and Paris and Los Angeles, so fuck him and all like him--associate, partner or otherwise. My house is bigger and nicer than his, and my blood pressure and cholesterol are lower. And my wife is hotter. So fuck him.

And the biggest irony of all? I don't even like my job that much. Job satisfaction? What the fuck is that? The only job I'd be satisfied doing is judging the Miss Nude World contest for a living. In Hawaii. I don't give a shit about my job. I do it because I have to, and because I can, and because it's easy. If and when I want to do some thing useful and meaningful, I will. But for now? Pay me. And give me my fucking club seat Carolina Panthers tickets so I can get drunk with my buddy clients for free. And we'll go to a strip club after.

That's living friends. Off to dinner. then a movie. Then a stress-free night's sleep.

The Panthers? I don't know dude. Your job doesn't sound as hot as it did before.

5:41 (In Houzz):

You obviously have it together. You are clearly better than your friend (which is very important!) since your wife is hotter and your house is bigger. And I can see how important your wife is to you--you probably tell all the strippers about how much you love her. Is she hotter than the strippers too?

I want to be just like you. Where do I sign up?

personally... i think anyone who keeps calling his job "In Houzzz" is a douchebag... and most likely a 2L sitting in some TTT library just trying to make the biglaw folks feel bad. BUSTED.

In Houzz and lovin' it - Sounds like you are a bit envious of your friend now that you have a meaningless career...

Strike!

In Houzz,

You sound like a bored law student (probably a 3L). The first post was sort of believable, but when you added the second post (hot wife, strippers, free booze, sports tickets and 30 hour work weeks) you lost credibility.

6:08:

Agreed. I know some people in house at some large corporations, and although their quality of life is much better than most biglaw associates it's not the CandyLand that Houzz describes.

Whatever, even if In Houz is for real (which is doubtful), he'll never be invited to the Ritz in Pasadena.

To all who doubt:

You're a bunch of dicks. And here are my individual responses:

I am neither a 2L or 3L. I can prove it: I am embarrassed that I ever was one, and that I used to think like one (you who practice know this is proof positive. So I am not BUSTED. Go back to watching the Hills on TV, you fucking peon. Or talk to the hand. Or whatever the fuck is "in" these days.

In the last five years, the Panthers came closer to winning the Super Bowl than the Giants, Bears, Jets, Cowboys and...what is LA's team again? My seats are awesome. I'd rather watch the Raiders in good seats than the Giants in nosebleeds.

I am in house at a bank, and technically, half my job consists of sales and marketing. It's not all candy. Ninety percent of the people who report to me are lazy assholes. Ninety percent of the people I report to are self-important blowhards. There are days my job sucks ass. There are some days it would suck an ass as bad as 6:04.

That being said, the location of one's position is irrelevant. It is the mindset and confidence one brings to it.

I turned down more than one offer to join the biggest of BigLaw. Only a moron who hadn't yet graduated could ever think that was a life worth living. You can bill your time, but you can never buy it back. I heard that from a stripper once.

And speaking of...I always hit on strippers. I can also pick up other fine women who don't dance on poles or otherwise demean themselves. That being said, who are you to judge me? I don't fuck around. But let's think of one place people DO fuck around with ugly paralegals and even uglier fat partners...hmmm.

And if you want a real man, as opposed to the metrosexual or woman you're dating, let me know...

And if you want to me like me...post your email. I can teach you--at $400 an hour. You're already an idiot who doesn't know how to live a life worth living. What do you have to lose?

I totally want to me like you, In Houzz . . .

I totally believe that you are In House, by the way.
Or at least in your mother's basement, since you can't afford rent after failing to find a job. Only a miserable failure of a 3L like yourself feels the need to craft unlikely stories about how cool and macho you are on ATL. The only thing sadder than the typical "internet tough guy" is the desperate impoverished bitter jealous 3L fantasy-land tough guy. Remember, unlike your career, student loans aren't make-believe!

LAST!!!

In Houzzzzzz you are so awesome!

You hit on strippers???? How do you do it man? How do you get them to be so nice to you??

Way to attempt to pick up chicks on ATL... I think that might be a first. I'm sure you're "hot" wife is real proud of your exploits, and I'm sure she's happy her kid has such a wonderful father. I agree w/ 6:46. It is pretty lame to make up these stories, cause honestly, people as cool as you pretend to be aren't sitting on ATL at 7 EST at night on a Friday talking about how cool they are to a bunch of people they don't know.

hey out houzz

First of all, making fun of typos is ridiculous. Only a lawyer or a lawyer in training thinks that's a real put-down.

Not sure if you're working yet or not--actually you sound bitter enough to be an associate. But I should have known better than to come on this site and try to talk any sense into anyone. Especially a dyed-in-the-wool fool like you.

You could not be more mistaken. I could not care less what you think. I don't care about being cool or macho. I only care about being happy. and I am, whether you like it or not.

And I take great pride in knowing you are not.

Or am I wrong about that too?

anon at 6:55

This is my last entry. I'm going to put my kid to bed. With my hot wife by my side. One of life's true pleasures...I highly recommend it.

It takes game to hit on a stripper and get past the fact they just want your money. Believe it or not, outside law firms and law schools, there are people more able than you to "work deals." That's why you'll spend your life papering deals like the lackey you are. That's the true gift people like me have (in addition to true balls, not macho)--working those who are trying at the same time to work you--whether it's about money, or sex, or power, or whatever. I'm sure you wouldn't understand.

peace out. have fun studying or drafting whatever piece of shit document you're working on. I'm sure the client and/or the partner will appreciate it. I think I'll reent Apocalypto--but my hot wife doesn't really like violence.

I've lost track about what In Houzz and the others are arguing over.

In Houzz, you're happy, right? You're smarter than other "big-law" associates, right? Okay that's clear.

Others, you think In Houzz is a douche because he brags about going to strip clubs and having a hot wife. Okay that's clear.

Why can't both these things be true? Maybe In Houzz is smarter than us associates. Think of all the strippers he'll get to see!

This is an absolute outrage. I cannot believe that any partner in a respected law firm would pay money to listen to this crap. As an associate, if I found out that partners at my firm were taking this course, I would look for another job. It is a pernicious thing that will prove divisive for law firm cultures and destroy morale. This sort of "us against them" attitude is exactly what we don't need. Large firms that can afford market pay should pay market. The reason PPPs have increased so much in the last few years is because rates have gone up, increasing partner profits. Partners don't get to have increased profits and keep every damn cent. Any consultant who puts on a seminar telling them they can should be shot in the groin, stomach and then the head.

two more points...sorry I couldn't resist. I guess I can let my kid wait 2 minutes. it's not like she'll miss me her whole life like your kids will.

7:04 makes a fair point; I'll even look past his insult to admit it.

But here's my last point. it's not about the goddamned strippers. I know strippers are lame, nd I wish I hadn't emntioned it, only because it weakens my otherwise indisputable points.

But think on this. Most of the strippers I've met had some good qualities. I can't say that about almost all BigLaw Associates. Or any other true whores for that matter.

You're so transparent and bitter dude... go put your kid to bed and then drink away your feelings of self-doubt because you're law school buddy is about to make partner at a big firm and you're reviewing documents thinking "what if?"

FYI, earning $125K in NYC is the equivalent of earning about $61,000 where I live, Phoenix, and I earn about double that salary without living in NYC biglaw hell. I own my own house and I guarantee it's more than double the size of where you live unless you're a trust fund baby and/or independently wealthy.

You're not doing that great for yourself, houzz.

In Houzz = L2L

NC -- as in Carolina. As in the Panthers. Not NYC.

Is the $40-70k that they lose before taxes or after?

This conference would be funny if the premise weren't so demonstrably false. I've generally found that you generally get what you pay for with CLE programs, especially programs that cost <$500. At first blush, this program would seem to confirm this general rule.

As for the general topic, if one wants to discuss greed, the focus should be on the partners not the associates:

Starting Pay at Top Firms Falls Farther Behind Partners'

Leigh Jones
The National Law Journal
February 8, 2007
http://www.law.com/jsp/llf/PubArticleFriendlyLLF.jsp?id=1170842572765

Charts: http://www.law.com/img/nlj/charts/20070205salarychart.jpg

First-year associate salaries of $160,000 may seem like a jaw-dropping amount to pay for fledgling attorneys, but compared with profits per partner, starting pay at the nation's top law firms proportionately has been at its lowest point in a decade.

Several law firms recently announced a boost in first-year associate pay by about $15,000, up from $145,000. New York's Simpson Thacher & Bartlett was first out of the gate last month, with many New York firms following. In addition, Greenberg Traurig announced it would raise first-year salaries to $160,000 in its New York office.

It is still unknown how the latest increases in associate salaries will stack up against partner profits for 2006, but comparisons from 1996 to 2005 indicate that as partners have made more, first-year associate salaries have not kept pace.

At law firms with 501 attorneys or more, median associate salaries were $125,000 in 2005, according to NALP, formerly the National Association for Law Placement. At the same time, profits per partner at the nation's 100 highest-grossing law firms in 2005 averaged $1.07 million, according to The American Lawyer, an affiliate of The National Law Journal.

Consequently, associates were making 11.7 percent of the amount partners pulled in for 2005, the smallest percentage in the last 10 years.

By contrast, associate salaries in 1996 at the nation's largest firms equaled $70,000, or 14.3 percent of the profits per partner, which that same year averaged $489,753 among the Am Law 100, the 100 highest-grossing firms.

In 2001, associates at the largest firms were earning the highest amount in the last 10 years compared with profits per partner, when starting lawyers made 15.4 percent of partner profit amounts. That year, first-year salaries were $115,000 at law firms with 501 attorneys or more and profits per partner averaged $746,576.

GAP MAY NARROW

William Johnston, a vice president of Hildebrandt International, a law firm consultancy, expects the gap between associate salaries and profits per partner to narrow in the next few years.

"Overall profitability will start to plateau," he said. In addition, law firms will continue to feel the pinch for qualified law school graduates from their own competitors and from hedge funds and investment banks offering attractive alternatives, he said.

While new lawyers at smaller firms overall earned a higher proportion of firm revenues, that percentage has declined in recent years as well. In 2005, first-year associates at firms with 251 to 500 attorneys were making 17.8 percent of partner profit figures. That year, the median starting salaries for firms with 251 to 500 attorneys were $105,000, according to NALP, while profits per partner were $590,000 among the second hundred firms in the Am Law 200. (While not exact, the second hundred firms are roughly comparable in size to NALP's grouping of 251 to 500 attorneys -- exact comparisons were not available.)

In 2001, the year that first-year associates in law firms with 251 to 500 attorneys made the most compared with partner profits, starting associate salaries, at $108,750, were 24.8 percent of partner profit amounts, which averaged $439,392. In 1996, first-year salaries equaled $60,000, or 12.3 percent of profits per partner, which averaged $489,753.

Associates at these smaller firms in 2005 did a bit better in the associate-partner comparison than in 2004, when first-year salaries equaled 17.2 percent of partner profit numbers, as opposed to 17.8 percent in 2005.

Richard Rosenbaum, managing shareholder of Greenberg Traurig's New York office, said that firms need to raise salaries in order to competitively recruit associate talent, but there is a limit, regardless of how they compare to profits per partner.

"It's getting to a point where it's not about the law firms -- it's about the clients," Rosenbaum said. "There's a limit to what you bill associates out at the clients' expense."

LEVERAGING FACTOR

The differences between the two law firm groups -- those with 201 to 500 attorneys and those with 501 attorneys or more -- may hinge, at least in part, on leverage, or the number of associates per partner.

According to an NALP study released last month, larger firms continue to leverage their partners with associates and other lawyers to a greater degree than smaller firms.

With more associate mouths to feed per partner, it seems logical that firms with more leverage would have a wider gap between profits per partner and starting pay.

Even so, NALP's results show that in the last decade law firms were the most highly leveraged in 2001 and 2002. But a look at profits per partner for those years indicates that first-year associates at law firms with 251 to 500 attorneys and at those with 501 attorneys or more were earning a greater percentage of partner pay than in the years since, when leverage numbers were on the decline.

In short, leverage apparently cannot accurately account for how much associates earn compared with profits.

A significant reason for the widening gap overall between associate salaries and partner profits at large firms is the increase in the numbers of nonequity partners, said William Henderson, a professor at Indiana University School of Law -- Bloomington. His scholarship focuses on law firm operations.

As firms promote more attorneys to nonequity partner rather than to full partner, the pay differential between first-year associates and full partners becomes more pronounced, he said.

Henderson's research shows that from 1995 to 2005, the number of nonequity partners in 192 of the nation's largest and highest-grossing law firms ballooned by 234 percent. For the same period, the number of equity partners grew by 31.7 percent and the number of associates climbed by 78 percent.

An escalation in partners making lateral moves has prompted firms to reward their rainmakers more heavily, he said. One way firms can do that is to curtail the numbers of full partners by promoting senior associates to nonequity partners.

"In a competitive marketplace, you have to respect people controlling the book of business," Henderson said.

The National Law Journal's comparisons of first-year associate salaries with profits per partner from 1996 to 2005 involve an analysis of information from two separate sources: NALP and The American Lawyer. NALP categorizes its starting salaries according to firm size. The smallest group includes law firms with two to 25 attorneys. The biggest group includes firms with 501 attorneys or more.

The American Lawyer categorizes its profits per partner by grouping law firms in two categories: One category is the Am Law 100, a group of the nation's 100 firms with the highest gross revenues; the second category is the Am Law 200, a group of the nation's second hundred law firms with the highest gross revenues.

NOTE ON METHODOLOGY

For purposes of this article, the largest firms grouped by NALP were compared with the Am Law firms grouped by the highest profits per partner. The NALP's second-largest firm grouping was compared with the Am Law firms grouped by second-highest profits per partner. For the years before 2000, when NALP and Am Law categories were configured differently, correlating comparisons were made.

That is, starting salaries among the NALP group with the most attorneys -- 501 lawyers or more -- were compared with the average profits per partner of the Am Law 100 firms. Before 2000, law firms with 251 attorneys or more composed the group with the most attorneys in NALP's categories, since law firms were smaller in those days. As such, for the years 1995 through 1999, starting salaries at law firms with 251 attorneys or more were compared with the average profits per partner of Am Law 100 firms.

In addition, starting salaries at law firms with 251 to 500 attorneys from 2000 to 2005 were compared with profits per partner averages for the Am Law 200 firms. For the years 1998 and 1999, firms with 101 to 250 attorneys, another NALP category, were compared with average profits per partner for Am Law 200 firms, since the largest NALP category prior to 2000 was firms with 251 attorneys or more. Finally, since the Am Law 200 did not exist before 1998, firms with 101 to 250 attorneys were compared with Am Law 100 firms for the years 1996 and 1997.

The legal profession is the only one in the world that pays everybody out of law school in the same market the same $ amount. And a ridiculously high $ amount at that. There is no associate on this planet worth $160 K in his first year, not even as member of Skadden or Cravath and working 2,400 hours. I've talked to a leading compensation consultant to corporate America who recently began studying the legal phenonmenon. She is convinced (and I happen to agree) that the way law firms pay associate talent will profoundly change within the next 2 to 3 years. And that major law firms will stop the ridiculous practice of following what the other firm down the street did.

Bottom line is this. The majority of Am Law 100 & 200 firms in this country will no longer be able to remain viable if they don't get associate compensation figured out for the better. Major companies are completely fed up with the fees they pay commensurate to who exactly is staffing their matters. Not for top shelf legal work, but for most daily transactional work and litigation.

All I can say is this. Buckle up young associates for a bumpy ride. And prepare to look back at the present as the salad days of your earning potential as a newly minted attorney.

11:18, did you even read the post ahead of you discussing the associate v. partner pay ratio? Are you jealous? Or just uninformed? If someone working in an office is worth $45K/year and I make $200K/year I am still underpaid given how scarce a resource I am. Being in the top 1% or so of the population (college population actually, so perhaps top 0.5% of overall?) in terms of intelligence, as many T6 students are, I am a scarce resource and worth much more than those towards the middle of the distribution curve (the commodities).

"I've talked to a leading compensation consultant to corporate America ..."

Everybody lies.

Associates of the world UNITE!!!! Unionize and show the partners real PAIN!!!

I don't understand why some firms think compression is a "solution" to associate costs. Salary compression is the single largest cause of attrition among mid-level and senior associates, who happen to be the most profitable and the most productive members of most firms. From my view point, compressing senior pay may save a firm $100k-$250k, but it will also result in the loss of at least 10%-25% of the senior ranks, which will cost MORE than a true market increase. I understand that partners are the MOST greedy members of any firm, but they also strike me as economic idiots.

I took a job that paid 110 out of law school. (Back when biglaw standard was 125.) I did this in the expectation of less hours. Worked my ass off for a year then went back to biglaw for a big raise AND LESS HOURS. Be careful if you are offered less money for less work. Pay is easy to verify; workload is not.

It's a fallacy to equate salary with hours. For all but a small handful of firms, lower salary usually just means the firm's client base is made up of smaller businesses and individuals, who won't pay the higher rates it takes to pay the associates a higher salary while still keeping the inflated PPP where the partners want it to be.

It won't happen tomorrow, but eventually greedy partner attitudes are going to kill any desire many might otherwise have to study law. Then who will they have to do their tedious doc review?

Howrey, admitting they're an nth tier firm (where n does not equal 1), and making it clear, if it wasn't before, that the firm is basically a sham operation for partners to screw associates, have adopted a nebulous and nefarious associate compensation "strategy" wherein partner ensure that the sham continues unfettered by a "follow the leader" mentality.

Strippers who take my money to $190k!

this is america. in the job market, you're "worth" what someone is willing to pay you.

and these partners, like the fellow at GT, seem to forget (or ignore) that clients may also not like to pay rates that provide partners w/ $1-2 million+ paydays. clients care about the rate they pay for an hour of time; how the firm splits that up is the firm's business.

Is there any way this isn't an antitrust violation?

They forgot to mention that partners should also worry about the $295 they would waste by signing up for this stupid thing.

I don't know if this has been posted, but...

I think the real problem is that BIGLAW firms, by their actions, have made it clear that there is almost no chance of making equity partner. As younger associates realize that the place they have been working for 5 or 6 years does not care about their long term potential, other opportunities begin to show more promise. The only way for firms to even get young associates in the door is to overpay them for several years.

I believe that what midlevels are currently making in many markets is fair when considered in a vaccum. For example, a 5th or 6th year associate in Atlanta (which is lagging far behind in associate comp) currently makes about $170k a year after bonus. You can't complain with that unless you start to compare it to (i) what your barely able to whipe his ass 1st year associate is making (which, pre 1/1/08 raises is $140k after bonus) and (ii) what you would probably be making in another 5 years (which is about $190k after bonus).

NO ONE is going to like their salary structure when they see that people who are essentially worthless are receiving only slightly less and they don't see any real advancement in terms of salary for the rest of their life.

David -

Do you have any information on how well Biglaw non-equity partners are compensated in various markets? Any interest in opening a comment string?

It's not an antitrust violation b/c they're not talking to each other... or were you thinking of that wheel and spoke conspiracy case with the stupid movie theaters? Hmmm... I guess then they just have to avoid saying on the audiotapes "just don't follow the leader anymore"

The fact is that the last round of pay raises did not, and could not have made a serious difference in partner comp at AmLaw 100 firms. Associate pay comprises an alarmingly low portion of the overhead structure at these firms. Consequently, a 10% across-the-board raise in total associate comp only results in about a 1-2% hit to PPP at a typical BigLaw firm, even assuming no corresponding billing rate expectations or elevated hours requirements. Market fluctuations produce much bigger dips and spikes than 1-2% in any given year. DO NOT BELIEVE THE PROPAGANDA! The main force behind long hours is partner greed, not increased associate comp.

"ATTENTION BIG LAW PARTNERS - I will accept less pay for fewer hours"

.........seriously, so would I!!!

"ATTENTION BIG LAW PARTNERS - I will accept less pay for fewer hours"

.........seriously, so would I!!!

In response to Mike Hunt (11:18)

Based upon your inability to find your own ass with both hands and a mirror without talking to a consultant, I'm pretty sure you are a partner at BigLaw. Not just any partner, but one that wouldn't make it under today's standards.

"There is no associate on this planet worth $160 K in his first year, not even as member of Skadden or Cravath and working 2,400 hours."

Go talk to a respected partner at your firm that voted for the last round of increases. They will tell you (probably for the 15th time) that it is worth paying those salaries because it keeps your absurd economic structure running so you can make more money. It has nothing to do with the quality of the document reviewers coming out of law school these days, it's all about competition with other firms with the same economic structure.

"I've talked to a leading compensation consultant to corporate America who recently began studying the legal phenonmenon. She is convinced (and I happen to agree) that the way law firms pay associate talent will profoundly change within the next 2 to 3 years. And that major law firms will stop the ridiculous practice of following what the other firm down the street did."

Congratulations. I've been an associate for over five years. Somewhere in my second or third year, I predicted that this structure wouldn't continue more than 5-10 and I think a number of big firms are going to merge (or disband so that smaller groups can be swallowed up by others) and the whole face of law firm economics will change. It's too bad that your college roommate that calls himself a "leading compensation consultant" didn't tell you what this means for you. Let me try to explain in small words.

Current system: 1) Partners charge ridiculously high hourly rates for legal work; 2) partners make associates work ridiculous numbers of hours; 3) partners rake in dough when they multiply high rates by high hours; 4) associates leave because this system sucks; 5) partners pay associates more to keep system going. Repeat.

N.B. (I know, I said I would keep it easy to understand and you don't know what "N.B." means. Sue me.) There are certain pressures that check this system, but not very well. That will change at some point. For now, however, BigLaw partners have done an astounding job of seeing a tremendous return on their doomed-to-fail-eventually plan. Have you seen PPP decreasing at BigLaw? It is simply amazing that there are no real drops in PPP from year-to-year to speak of. Partners feel they had a bad year when their ridiculous high profit increase forecasts fall short (though still keeping pace with inflation). Where is the "risk" of sharing losses that partners pretend they are taking when profits never even dip momentarily?

So here's what could happen, though the pressure could come from a number of places. Clients will stop their idiotic whining about associate salaries and shift it to PPP, where their ire rightfully belongs. Maybe we will even see new charts on law firms profit margins (maybe slapped together as PPP*EPs:Revenue-PPP*EPs) so that the greediest can be called out. They will stop paying $1,000 an hour for your nonsense. Sure, that will hit associates, but not before it hits partners. Moreover, a change in these economics will take a much bigger chunk from PPP than it will from associate salaries. At the same time, maybe some entrerprising lawyers/firms will decide to jump back into the "vanishing middle" to undercut you greedy SOBs to get out in front of this change.

Before that happens, though, rest assured that you will probably have to increase associate salaries again due to the increased competition in finding fresh livestock to throw into the meat grinder. You will have to do this because the current system is not quite ready to die and no credit crisis, correction, recession, bubble burst, inflation, stagflation, etc. will change that because those markets do not control here. If you don't match, you will just find yourself at a disadvantage whent the big change comes.

Have a nice day.

I find it amusing that people keep discussing how client's won't pay the current high hourly rates, yet the hourly rates in London can be significantly higher than what is paid in the US.

One last point for the people who keep talking layoffs, even if the economy goes south BigLaw firms will be loathe to cut anyone because there is actually a shortage of top tier legal talent. Unless we have a 5 year + recession firms will bite the bullet.

I agree. This seems like it would make an interesting thread.

David -

Do you have any information on how well Biglaw non-equity partners are compensated in various markets? Any interest in opening a comment string?

Posted by: Anonymous | September 9, 2007 09:45 PM

Those willing to work the long nights/all-nighters/weekends deserve the 160K, but I think a lot of people would be happy with a tiered pay structure based on hours worked.

Paying lawyers by the hour? What an unheard-of idea!

To No Ritz:

Hello?!?!? What do you think your expense account is for...? It's to take us in-house folks to the Ritz...or to Broadway shows or ball games or to Vegas...or wherever we want to go. I know some in-house that basically NEVER pay for a drink or a meal or an entertainment opportunity or a vacation. Generally, I prefer not to go that route as hanging out with BigLaw suck-ups annoys me more than the "free stuff" is worth. But then there's my friends from BigLaw or law school that I knew before going in-house that still act like human beings around me and a few cool attorneys that don't have to act all bragadocious and obnoxious and obsequious and yeah, when I'm thirsty, I'll call them up for a drink and let them get the tab. And I'll admit to a ping of jealousy when I hear about their latest raises....