Biglaw Perk Watch: The Gray Lady's Take
Guess what's at the top of the New York Times Most Emailed Articles list today? A piece entitled For Lawyers, Perks to Fit a Lifestyle, by Lynnley Browning.
We're pleasantly surprised that an article about law firm perks, a niche topic that we cover obsessively around here, is so popular with readers of a general-interest publication. Or is it just that lawyers are the only poor saps at work today?
Among the more notable perks mentioned in the article:
1. Milkshakes and candied apples -- yum! (Perkins Coie) [FN1]
2. Mortgage guarantees for the first $100,000 of associate mortgages (Sullivan & Cromwell)
3. Reimbursements for associates who buy a hybrid car or a certain brand of car (DLA Piper; Fulbright & Jaworski)
4. On-site yoga classes (O’Melveny & Myers)
It's an interesting article; read the whole thing here. There's additional commentary on the piece over at the WSJ Law Blog, by Jamie Heller (filling in for Peter Lattman, who is on his honeymoon).
P.S. Looks like an NYT correction may be in order, due to a slip-up concerning the amount of year-end bonuses:
The perks come on top of higher salaries and larger bonuses — this year, the top-offs have been doubled at some practices. At the New York office of Cravath, Swaine & Moore, an old-line firm, associates will receive special payouts of $10,000 to $50,000, in addition to their year-end bonuses up to $35,000.
Our suggested rewording: "At the New York office of Cravath, Swaine & Moore, an old-line firm, some associates will receive special payouts of $10,000 to $50,000, in addition to year-end bonuses up to $60,000." (The word "some" is needed before the word "associates," because class of 2007 or "stub year" associates don't get special bonuses.)
[FN1] The Perkins Coie milkshakes come from Potbelly Sandwich Works. Coincidentally, we enjoyed a PSW milkshake for the first time on Wednesday. It was Oreo, and it was delicious!
Update: One of you sent us this great comment, by email:
I thought the most poignant perk was Fried Frank's: they offer psychotherapy (through what sounds suspiciously like a bulk discount deal) to help associates deal with stress, anxiety, depression, and divorce. I love it!I can imagine the therapist's notes: "Patient distressed re: possibility of negative performance review. Says he has not seen wife or child since, "let's see ... when was that holiday with the fireworks?" Is in constant pain from chronic papercuts and verbal caning associated with ongoing case. Patient noted gratefully that firm is paying for therapy. Possible diagnoses: Stockholm syndrome?"
For Lawyers, Perks to Fit a Lifestyle [New York Times]
Law Job Perks v. Law Job Woes [WSJ Law Blog]
(25) 
First!
lat, how could you fail to quote the bit about receiving dinner @ cravath on a silver platter from the Palm? easily the most ridiculous bit in the whole piece, and it's emblematic of the whole cravath experience/image.
Certain facts in this piece don't seem right to me.
the gray lady is a tired, old hag. all the news that's fit to print... and an additional serving of prevarications and embellished stories too.
What exactly are the "[m]ortgage guarantees" at S&C?
My firm lets me go home to sleep once in a while. Great perk
The mortgage "guarantee" is not a particularly good deal- it's a guaranteed $100k loan at an above-market rate. I guess it's for people who can't scrape together a 20% down payment.
I was hoping this article was going to be more inspirational since I'm at the library studying for exams. Though I wish I could sneak a milkshake past the security guard.
1:02 - no drinks in the library!!?? that's a lousy policy. 'No food is understandable, but coffee and water are must-haves for long hours at a table in the library.
Article doesn't seem particularly well researched, but rather driven by a "see how spoiled lawyers are" agenda. Mistake on the amount of bonuses, and no sense that many of the so-called perks (drop off dry cleaning, for example) are fairly standard in many large companies today. Also doesn't point out that those lawyers who get dinner from the Palm are charging their clients ... not the law firm for the privilege.
3:02: The New York Times writing an article while pursuing an underlying agenda?? How unprecedented!
maybe if OMM wasn't spending all its money on yoga classes in CA it would actually be able to match bonus...
All I can say about this piece is don't believe everything you read...
6:39....the facts in the article seem pretty straightforward to me, why shouldn't I believe everything I read in this article??
I particularly like the guy quoted at the end of the article who lambasts the excesses of BigLaw, then concedes his firm brings in masseuses to promote "morale."
Seriously, this profession is at its pinnacle. I believe the excesses will be apparent 10-20 years from now. Real value is created at the corporate/entrepreneurial level, not at the legal level. These firms are feeding off corporate America, and it won't be long before profit-driven corporations refuse to subsidize this sort of cushy excess.
I'm just amazed that most Partners don't seem to grasp the image this creates in the eyes of all non-lawyers, including their own clients. It's just bad P.R., quite frankly. But I suppose that's why these lawyers didn't go into P.R., or business, for that matter.
10:49 - I realize this may come as shock, but specific facts in newspapers are sometimes incorrect. I realize this revelation will probably shake your worldview.
The impression created by this article is simply wrong.
The impression created by this article is one of luxurious excess, whereas the reality is long hours, often to the complete exclusion of outside life, quick meals hurriedly eaten at your desk, and difficult work.
The story's premise crumbles under its facts. Almost every so called perk listed is of trivial financial value and designed specifically to keep your butt in your chair and the billing clock on. The pay and bonuses ares are not perks, theyre compensation. Is it a great sacrifice for a firm to spare an associate a $10 cab ride in exchage for 4 more hours of billing from 8 to midnight, netting the firm an extra $1200 dollars or more? When you bill a million dollars worth of hours in a year, giving you 40K "extra" is not a perk. Its what keeps you in the chair after another year of eating free "perk" dinners at your desk 5 nights a week. This piece appeals to the lame NYC attitude that the gold standard of status is enjoying vicarious leisure and access to exclusive consumption. The perks dont create a perception promblem except in the eyes of the crass and materialistic. What these steps show is the frims' desperation to maintain their staffing and work quality in the face of absolute client demands of speed and perfection, and the resulting pressure transmitted to assocaites. If clients want to feel schadenfreude instead of jealousy, let them hire a cheaper firm where they can feel socially superior to their service providers because the lawyers don't get free milkshakes.
dmw -- chill out, dude. maybe you need to go back to the woods and keep working on your manifesto, rather than socializing with real people.
9:06 and 11:30: Very well-put. 90% of the people at their desks would prefer take-out pizza in front of the TV in their own apartments. Well, I know I would, at least.
I don't dispute that BigLaw associates work hard. The question is whether these perks, not to mention associate base salaries, are commensurate with the value junior lawyers provide the firm.
It's very hard to justify giving a 25 year old straight out of law school over $200,000 a year when the firm has to teach them how to use Westlaw and how to write a most basic pleading. Shouldn't new lawyers focus on those skills rather than getting an in-house massage or manicure, or an expensive dinner on the client's dime?
And as for 7:12, can you tell me exactly which fact(s) in the article are inaccurate? You've told us twice that we can't trust what we read in this article, but you have nothing beyond that?? Not very persuasive for a lawyer.
"I don't dispute that BigLaw associates work hard. The question is whether these perks, not to mention associate base salaries, are commensurate with the value junior lawyers provide the firm. "
Yes--who can possibly justify extravagent perquisites like candy apples and milkshakes?
2:00, I'll let the milkshakes and manicure comment go. But you are deeply out of touch with this world if you think a new lawyer who has to be trained on Westlaw and taught how to file a lawsuit and draft basic pleadings is worth $200,000+.
I have a feeling many lawyers receiving such exhorbitant salaries recognize they are not worth what they are being paid. Their salary has no relation to the value of the few services they are actually capable of providing. But it's funny how some of you nevertheless feel the need to justify your salaries, and can't quite come to terms with the fact that you are grossly overpaid, especially since you would be completely clueless without a partner or senior associate at the other end of your telephone line or blackberry.
"It's very hard to justify giving a 25 year old straight out of law school over $200,000 a year"
If a first-year (not straight out of law school, by the way--by the time an associate sees his first full bonus, he will have been with the firm over a year) bills just 2000 hours at even $300/hr., he brings in a revenue of $600K. Assume that benefits and overhead double the salary (which is fairly generous), and the firm realizes $200K on that first-year ($600K-$400K).
Gee, that was pretty darned easy. A person generates revenue and is paid commensurately. What a concept! Funny how people like to claim the market rules all, until the market pays out people they don't like.
Reading Is Fundamental:
You should look up the word "worth." Nobody disputes that a new associate can bring in $600,000 a year. The question is whether they are objectively worth the $200,000+ they are being paid. The answer is no. It's the client who gets screwed in this case, because they end up subsidizing the new attorney's on-the-job training at exhorbitantly high rates. Corporations have little choice because all law firms do the same thing. Such concerted behavior doesn't legitimize or justify the rates they charge, it just creates a market inefficiency that is shouldered by the client.
To make it a little more concrete for you...the fact that someone is willing to pay $800 for a share of Google doesn't mean it's actually worth $800. The market dictates prices, not value. Sometimes, there's a disconnect between the two. Markets are imperfect, believe it or not.
Hello,
Do you think that all of the staff support, training time, computer equipment, office space are only twice what the attorney makes.
Hah!
The rule of thumb in HR is that you figure 50% of base salary for benefits and other employee related costs. So that gets to 300K of the 600.
Then you figure that at most firms it's about 2 non-timekeeping staff to every lawyer to support them in their ability to do that work that adds in a minimum of $150K-$200K right there.
Then you have physical overhead, office space, computers etc.
Truth is most Biglaw firms *lose* money or just break even on Junior Associates.
And that's OK, it's about making an investment and developing the Associates skills to the point where they do become profitable.