Was K&L the only firm that matched 401(k) contributions? What other firms are currently matching?

What was the employer contribution before this change? It seems like the only reason they used to make the contribution was to pass the antidiscrimination (discriminating against lower paid EEs) test. For some reason they don't need to worry about it anymore.

Question: what firms do match, and how much?

Hunton: does not match.

You punks want a match too?

i was under the impression that pretty much no vault firms matched. ive only seen this benefit at midlaw firms i've been applying at

Paul Hastings does not match and requires associates to contribute 8.5% of base salary to their 401(k) accounts.

No matching? For those of us not in the legal profession, that's insane. Matching the retirement benefit is a gimme at all the jobs I've ever entertained.

Yes, biglaw pay is great and all, but the extra percent on the pre-tax retirement contribution is sweet sweet gravy.

Up until about 2 years ago, Heller matched.

1:05 - I'm with you, nothing like working on a beautiful fall weekend.

Who cares about matching - NY to 190!!

Big law pay or not, all employers should be matching.

It was an easy way for them to cut pay without reducing salaries. The howls would have been louder if they just dropped from $145 to $140 or whatever. The contributions feel more like a "benefit" even if there isn't much of a difference.

145,000 embarrassing? Look at what K&L pays in their Seattle office (old HQ's of Preston, Gates and Ellis).

Now that's embarrassing. Seattle is a pretty damn expensive place to live. No wonder they are having problems.

3:27: Seattle is a weird market. All the firms pay diddly squat (somewhere around 105-115 is market even though it is just about as expensive as DC). So I wouldn't hold that against them.

Its a good thing that my Vault law firm matches! Its so ridiculous that law students think that salary + bonus is the only form of compensation.

K&L who? Everyone knows that this firm is bush league. Third-tier grads go there. They should be paid less.

why would paul hastings "require" associates to contribute 8.5%?

4:41 - Good question. But they do.

Ours is not to reason why; ours is but to bill and die.

3:27 - What kind of problems has K&L been having? They offered me so now I'm not sure I should accept.

5:11

They've apparently been having problems that require them to stop making matching contributions to associate 401(k) plans so they can keep more money in the partnership. You figure it out. If you can't, go work there.

5:11 - One comment from from an anonymous person on a law gossip blog is reason enough to decide where to work. Definitely don't go there!!! Anonymous at 3:27 said they were having problems!!!

the problems might be limited to the Seattle office.

baker & mckenzie matches............................but only if you've been admitted for 12 years.

K&L contributed 2% of gross pay, so anywhere from around $2,000 for a first year Harrisburg associate to upwards of $5,000 for some of the more senior NY associates.

I never understood why firms *wouldn't* offer this benefit. What downside is it to them to offer a portion of compensation that way?

Mine doesn't, and it always fricking irritates me. Agreed with whoever said that sh#t is standard outside of "the law."

4:41, I remember from a previous thread on 401(k) benefits that Paul Hastings' plan enables its associates to contribute MORE pre-tax dollars to retirement: Since the 8.5% is a mandatory automatic deduction, Paul Hastings associates can put in an additional $15,500 in addition to the 8.5% (while the rest of us are capped at the $15,500). As someone who got started in practice a bit late (unlike Kathleen Holtz from the 10/19/07 Non-Sequiturs), I would love to contribute more pre-tax dollars to my 401(k) and really wish my firm would implement Paul Hastings' plan. Seems like a no-cost scheme for the firms and a way to encourage retirement stability when those who make partner get pushed out at the mandatory retirement age.

BigLaw firms DO offer 401(k) matching. Just not to associates. (I dunno why staff get matching but not lawyers.)

First, K&L Gates is at 160k in Los Angeles. Second, the firm is proud for being frugal--they're one of the rare firms that never "have to borrow" or dip below red or whatever when they dole out bonuses, etc.

1:17 - Associates are considered highly compensated employees (b/c they make over 100k) and thus are not protected by non-discrimination ERISA provisions.

The problems is that firms don't get credit on NALP for doing this. It's all about one number...base salary.

For example, some midwest firms (Keating Muething & Klekamp in Cincinnati for example) contribute 7.5% of your gross salary into a profit sharing plan regardless of whether the associate contributes anything or not...this is completely separate from bonuses. Firms that have this benefit (which are probably few) don't get to add it to their base salary disclosure.

Perhaps we need a NALP Summary Compensation Table to get past all the smoke and mirrors of what firms actually pay.

Bingham matches for staff, but not for lawyers.

Lat,

Do a poll...how many associates want firm contribution of 8.5% of their salary into a savings account, compared to a 190 base scale...

I think almost every firm matches for staff and not lawyers.

maybe everyone is a winner...nixon peabody matches for attorneys. i think it's a 50% match, up to 3% of salary.

Firm A and Firm B both have a base salary of $190. Firm A has an 8.5% automatic profit contribution and better bonuses. They are both equal on the NALP form. Make sense now?

Firm A drops the profit contribution/401(k) match because the only number anybody cares about is the $190 (as this appears to be the case from this blog and posts).

Matching is one of those few things that makes a long term difference, because it's something associates can't do for themselves: they can't just put more than their 15.5 or whatever into their 401ks. If you actually asked associates to think about it, it's a much bigger long term benefit . . . but firms won't take the time to offer it.

it's one of the first things i asked about w/r/t compensation. i was shocked to find out no one offered it. it's hard for me to believe that it wouldn't separate out demand among firms (at least for those choosing based on pay scale).

I mean, the same thing is true for any job, right? Everyone wants to know how much money they'll make. Are lawyers *less* likely than others to ask about 401(k)?

A deep look into the mind of a First poster:

http://www.collegehumor.com/video:1752858

A firm that pays 150k and matches 10k is providing higher compensation than a firm that pays 160k, but the cost to the firm is the same. It seems like the only benefit of this strategy would be to attract stupid associates.

Are most lawyers this short sighted?

8:42,

The difference is in how you value liquidity. If all you care about is net worth, then take the benefit, but if you like spending money more than you like saving it - and most people do - then there is something to be said for getting less, but getting it upfront.

you have to be a dumbass to work for this firm

Eliminating the 401k match is a morale killer. It just goes to show you that K&L is willing to squeeze every nickel out of their associates as is possible. This used to be a good firm.

Reed Smith to 6% match!

(1) re: Paul Hastings. No firm can "require" anyone to contribute to a 401(k) plan. It's the law, you cannot do it. You could set that up as the default contribution rate, but any employee has to be able to change that to 0% or the IRS will disqualify the plan.

(2) No employer can allow anyone to contribute more than the IRS limit on pre-tax dollars to a 401(k) plan. (Firms can adopt a Roth 401(k) plan that would allow employees to contribute after-tax dollars to give employees an additional savings vehicle, and not enough firms have done this).

(3) Sometimes firms cannot offer a match because of the IRS anti-discrimination rules. If you don't have enough non-highly compensated employees participating in the plan, then you cannot "discriminate in favor of the highly compensated employees." It all depends on the size of the firm and its makeup; the more lawyers (or anyone making more than 100k in 2007/105k in 2008), the more likely you are to flunk the test. I would imagine that this is just an unfortunate by-product of their merger (remember, these IRS rules get tested once a year, so there is always a lag). The policy behind this rule is similiar to the Roth IRA "phase out" rules--you shouldn't allow "rich" people to shelter more than a certain amount of income from the tax man...and remember, if an employer "matches" any money, that money isn't taxed by the IRS either. The government wants to encourage saving, but there *is* a limit.

So I wouldn't crucify K&L Gates based on the scant information out there. There is a legitimate reason why firms CANNOT match, and their hands may be tied on this one.

Firms could (and often times do) have more than one 401(k) plan, so that the staff aren't screwed out of a match because of all the highly-compensated lawyers. In other words, they put all the associates/counsel (who would have otherwise ruined it for everyone) in one plan, and put the mostly non-highly compensated employees (staff) in another so that the firm can still give them a match. The IRS test is technical, and there are a couple methods, but, generally, it's a percentage test based on actual participation.

If you really care, why don't you google the question and figure it out. We should be focusing our energy on having firms change things that they actually have control over. We look like whiny bitches enough as it is.

Pittsburgh is taking over the legal universe. Did you see Reed Smith just added 110 top attorneys to their Hong Kong office?

Pittsburgh firms > Philly firms.

Pittsburgh? Philadelphia? Who cares they both lost to weak teams today.

11:59 - Good question. You are either not a lawyer or a hypocrite.

An employer may make nonelective contributions on behalf of its employees under a qualified 401(k) plan. This is what PHJW does, in effect 8.5% of every attorney's salary is paid as a nonelective contribution to his 401(k). The attorney may then contribute the maximum elective deferral in addition--$16k next year. The employer's contribution cannot exceed $45k, I believe.

The limit on contributions to which you refer is on elective deferrals only. The combined amount of employer contributions and employee contributions is much higher.

11:59 - In effect, Paul Hastings pays its first years $146,400 in salary and $13,600 as a nonelective contribution to their retirement accounts. Associates may then elect to contribute $15.5k to their retirement in addition.

1:59,

For all the big legal terms you put in your post, you obviously have no clue how these plans work. You conclude by saying there are several reasons why firms "CANNOT match." This is completely wrong.

The only prohibitions relate to "discriminatory" practices. They use highly compensated employee percentage calculations to determine this. However, if you match for every employee whether highly compensated or not, then there is no discriminatory practice.

There are legitimate reasons why firms cannot only match for lawyers and not staff, but no reasons they cannot match for everyone! Get back to class!

I had a callback at this firm several years ago. Within one year of my callback, 3 of the 4 associates who interviewed me were gone, including one who told me to tell one of the partners that I was meeting with to return his phone calls. This does not speak well.

Sorry the last post is for 11:59, not 1:59

11:12, when exactly was K&L Gates a "good firm"?

The Feds have an automatic 1% agency contribution and match dollar-for-dollar on the 1st 3% contributed, plus 50 cents on the dollar for the next 2%.

The old Wilmer used to match 401k, but they dropped that policy as soon as the Hale merger occurred. And the fantastic thing is that the new firm refused to honor the benefits promised to the Class of 2004 in our offer letters from the old firm, even though we accepted our offers prior to the merger's completion. Classy, and symbolic for the new way of life under the WH regime.

October 21, 2007 11:59 PM (aka "hy don't you "lawyers" research the law before posting. Idiots.")

Paul Hastings does require their associates to contribute 8.5% of their salary to the firm's 401(k). I worked there (and posted about this in a previous thread). It is not voluntary and you cannot opt out of it.

I'm not an ERISA lawyer, but my understanding is that the only way to get around the $15,500 annual 401(k) cap is by making the 8.5% contribution mandatory.

Many associates had large portions of their bonuses put into their 401(k) accounts, because there were better tax savings (as opposed to regular deductions from their paychecks).

So, in short, you may want to do some research before spouting off about something you know nothing about. Idiot.

10:39: "Many associates had large portions of their bonuses put into their 401(k) accounts, because there were better tax savings (as opposed to regular deductions from their paychecks)."

Speaking of spouting off about things--there is NO DIFFERENCE in how bonus compensation is taxed. There are different withholding rules, but (1) you should be able to manage that via changes to your W-4 and (2) even if there is overwitholding, you do get the money back (which is not preferable, but hardly constitutes "tax savings").

Why does this myth persist?