Smart move.

Kudos to MWE! Unlike Bingham, who refused to admit and correct its 2100 hour mistake, MWE understands what it takes to remain a contender.

The guys I know at MWE all seem like decent people.... and at least they're willing to correct a mistake.

I kinda wish I worked there

Lets hope other firms waaay below market outside of NY (i.e., Sidley) do the same.

What did Irell pay? Munger?

This also includes the Miami office, I am told.

It will be interesting if Sidley thinks they can avoid market bonuses now

What does the prevalence of "market rate" salaries and bonuses say about our profession? Coming from the engineering field, it at first seemed incomprehensible to me that every firm in a given city would pay identical salaries/bonuses. There's no such thing as a "NYC" or "DC" rate for first year engineers coming out of school - and not even within specific engineering disciplines like electrical, mechanical, chemical, etc. I've come to the conclusion that law firms pay uniform salaries because the work itself is uniform. Terms like "talent," "merit," and "skills" have no meaning within our profession because, for the most part and with a few exceptions, the work done by an associate in a big firm can be done by any other associate from any other big firm just as capably. Firms toss around buzz words like "most talented" and "best credentialed," ostensibly to describe their lawyers relative to all others. The truth is that no matter where you went to school, what your grades, or whatever other "credentials" you attain in law school, your actual capabilities - the set of skills you have to offer an employer, and the world in general - are indistinguishable from the vast majority of other law school graduates. The synchronized salary structures throughout the legal profession reflect the reality that most corporate lawyers are no less fungible than fast food workers or unionized manual laborers.

what are you saying about unionized manual laborers? That they have no skillz? Can YOU fix your own electrical problems?

jerk.

As long as Sidley (any firm, actually) believes that they will not lose associates because they failed to address discrepancies in bonus compensation, no supplemental bonus will be paid. The fact is, as much grumbling as there is amongst associates, management committees across the country have gambled that in a declining economy risk averse lawyers are more likely to stay put than venture out into an uncertain market.

Kudos to MWE for treating its associates like first-class attorneys.

1:50, I was right with you until you made your illogical leap. Although the work done by an associate at a "big firm" can likely be done almost as well by any other associate of the same year at another "big firm," that doesn't mean that school and class rank are irrelevant. Stupids like L2L don't get into big firms in the first place.

1:53 - I'm saying that they are highly fungible.

1:50, 2:04,

So are sprockets. Doesn't mean they don't have value. Are you trying to insult lawyers by saying they are "fungible"? Are you trying to say they have lower value, i.e. like that of a "manual laborer", because they are "fungible"? I don't get your (il)logic.

And by the way, who ISN'T fungible? Engineers are as interchangeable as any worker.

1:23 - Bingham is not unique in its billing or total hours requirements. To the extent it was ever less than anyone else's, it was not sustainable.

1:50 - Exactly. My argument is that the distinctions drawn by firms in the hiring process are, in fact, arbitrary and irrelevant. If the nature of legal work required any "specialized" skill set that people like L2L lacked, then salaries would fluctuate to match individual skills/capabilities. Assuming L2L is not illiterate and possesses the most rudimentary logical reasoning capabilities, he would likely be able to perform just as well at S&C, Cravath, Kirkland, etc. as the quote-unquote "prestigious" Ivy-league students they hire. I guess the point I'm trying to make is: just because you got into YHS law school or made EIC of your school's law review, don't trick yourself into thinking you actually possess some inherent degree of "intelligence" superior to the vast majority of law students and lawyers.

Workers with firm-specific human capital aren't fungible. I guess that explains why the b-school group work model isn't sweeping legal education.

quote-unquote "prestigious"

Um. You don't have to say "quote-unquote" if you can type it.

and especially if you did type it.

The exodus at McDermott was about to commence, so we'll see what happens with this triage. I know a number of upset associates who were looking for the door. Most of the associates got dinged on bonuses, but the real damage took place at the 2400-2800 (and above) billable hour evel, where the bonuses were surprisingly stark - which greatly undercut any incentive on the high billers to work post-2000 hrs (e.g., the financial value of the extra hours was tremendously diminished).

1:53 - I do think that fungibility and value are inversely proportional. It's basic economics. Fungibility is a proxy for supply. Given a constant demand for some job or service, the position becomes less "valuable" the more people exist who can fill it. The average salary of a lawyer in the United States is probably comparable to or lower than the average salary of, for example, a scientist or engineer. The huge discrepancy in salaries paid by the most "prestigious" firms would make sense if those firms were getting something special for their money - unique skills or abilities that lower paid lawyers at the smaller firms did not possess. Big firms claim this is exactly the case: their lawyers are the most "talented" with the "best credentials." I'm saying that if this were true - if such a gradient really existed - then there would be no prevailing market rates because salaries would fluctuate with respect to those varying capabilities. In other words, the nature of our work and skill set is so generalized that there is no way for firms to distinguish between, for example, YHS Grad #1 and YHS Grad #2 in order to match salary with true "talent"/"merit"/etc.

MWE doesn't award its real top billers. Indeed it has a policy to not compensate its top billers (i.e. 2400+) for their extra hard life sacrificing work because it doesn't want to create the incentive to work that hard. I commend the firm on the generally policy, but the implementation is just insulting. Come on guys there are lots of better ways to do this than robbing your attorneys. So work real hard...but not too hard... and you will be ok. Has anyone heard of any other firm doing anything like this? Crazy....

all the bad publicity serves MWE right. screw the BigLaw places that say one thing and do another; that treat their foot workers like total garbage. we give our life and soul, working late nights and weekends for sometimes weeks on end. we do the math and realize that, even at the junior level, our firms are billing $700,000+ off of us. yet the greedy-@$$ partners can't give us a $10,000 crumb from that loaf?
and no one has been complaining (that bad) solely because his or her firm overall has had a bad year. it's the way they treat us. they lie. they keep ultra-high profits-per-partner levels. and then they treat us like crap, impose startling new bonus structures that cut us out, tell us that we are performing poorly when all we've heard all year is that we're doing great work.

thanks to ATL, these types of practices are finally becoming public knowledge. we all knew about isolated incidents that occur in our small network of contacts. but now to see that this happens large scale, all around the nation with these firms . . . maybe all of this publicity will bring about some change. and if it doesn't, at least we know. and at least we know who's being fairly treated and who isn't.

I did not go to any of YHS law nor was I EIC of any journal, let alone the law review - that being said - i have to disagree with 2:13 - I think generally these people are more intelligent than the majority of law students and lawyers. Maybe not within the "BigLaw" world and I don't think they are automatically better lawyers, but the dumbest HLS kid I've ever met is smarter than the smartest TTT kid I've ever met.

2:36 - I guess our different experiences explain our different perspectives. I worked in a huge SA class last year mostly filled with students from schools like Chicago, Harvard, Northwestern, Michigan, Virginia, etc. There were also many SA's from second and third-tier schools in the local area (presumably all of these students had to be at or near the very top of their class to get their foot in the door). I never saw any noticeable deficit in capability or intelligence in the students who attended lower ranked schools, and in fact the least impressive people I met all came from higher ranked schools.

The jury's still out. What McDermott has to do to rectify this is actually meet the market. That is a significant increase of $30-40K for mid level associates. I'm not sure from today's call that the firm is ready to pony up at that level.

I hope the firm realizes that such a difference makes associates seriously consider their job options. If I can go across town and make $40-50K more per year for just hitting my hours, how can I not? The flip side is that I will simply bill less. Low bonuses creates a disincentive and this should seriously trouble the firm. If the difference between 2000 hours and 2200 hours is a measley $15K, then I will spend that time with my family. Almost every associate I've talked to has talked about either polishing their resume or billing significantly less this year. This is just bad for the firm and I hope the announcement next week rectifies the situation.

Random Question: Do firms provide a stipend for the summer months their incoming associates spend studying for the bar? If not, do people take out loans to cover this period?

Thanks for any help.

Don't kudos MWE yet. Show me the money!!!

2:13, do you have anything to back up your blind assertion that top grads of top schools aren't smarter, as a group, than average performers (or even top performers) at low ranking schools? Of course there MAY be outliers, but recruiters want to maximize their odds of hiring a smartie. Smarter associates will learn faster and learn more than their less intelligent "peers."

If it takes more than about 4 weeks to study for the bar...you are in trouble. Further, if you don't have 4 weeks of living expenses handy...you are in BIGGER trouble.

Duh, 2:36, these students were "at or near the very top of their class." School rank was mitigated by class rank. Your argument does nothing to support your earlier position that intelligence is not correlated with "where you went to school, what your grades [were]..."

2:36 - First, as a fellow SA, how were you in a position to judge their intelligence? Were you reading their memos? Were you participating in associate conversations evaluating the SA work product? Second, SA work is the easiest, least sophisticated work out there. Of course the functional differences in intelligence will seem small at that level.

2:24,

Sooooo, you think you're a better purveyor of value than the market is what you're basically saying?

Ok, dude, you win.

2:45, yes, most firms either give you a stipend or give you an advance on your paychek. Don't mind 2:52, he's just a retard who didn't take the bar in CA.

3:23, thanks for the straight answer and the good news

1:23 - what about Bingham? Have they announced bonuses?

3:33--Bingham announces bonuses not in a memo but individually as part of year-end reviews, which occur roughly early February. They're only ahead of the curve in increased hours expectations.

3:33--Bingham announces bonuses not in a memo but individually as part of year-end reviews, which occur roughly early February. Way behind the cash curve, way ahead of the hours curve.

3:46 - Increased hrs at Bingham (supposedly) only take effect with 2008 billable year.

Bingham to 190 (hours per month)!!

silly little MWE associates, no eye to the future...i want it now...i want it now...give me my money now

What happened to associates working hard to make partner? Is it really just about the bonus? And if so, should the firm care that these people are looking for the door?

This generation of associates is out of control. Take a lesson from Louis Anderson:

"Oh yeah, I started out mopping the floor just like you guys. Then I moved up to washing lettuce. Now, I'm working the fat fryer. Pretty soon I'll make assistant manager and that's when the big bucks start rolling in."

4:52 - The partners have been hammering this point again and again -- "It's all about making the partnership." More like, it's all about the partners. I say thanks, but if you're asking me to accept sub-market compensation for more than a decade in exchange for a 1% chance of being elected to a partnership where I'll make slightly more than average PPP, I'll take my chances elsewhere and enjoy a better standard of living in the meanwhile.

Moreover, it's odd that the partners are accusing the associates for being greedy when they just want a similarly-sized slice of the pie -- billing rates go up, profits go up, the firm raves about the banner year they're having, but tells the associates that they don't get to share in the financial rewards that their hard work made possible? Uh-huh. Hold your kudos until you see what kind of insulting "adjustment" the firm makes. Don't be surprised if they provide it in Gift Card form, either.

2:13, do you have anything to back up your blind assertion that top grads of top schools aren't smarter, as a group, than average performers (or even top performers) at low ranking schools?
Posted by: Anonymous | January 15, 2008 02:51 PM

__________________________________

What proof do you have that they are? Because they have high LSAT and are good at LS exams? And how are you defining "intelligence" anyway, if not in the tautological sense of being good at exams?

The bottom line is that there are a limited number of positions available at top law firms, and multiple many times that number of LS graduates who would like to have one of those positions.

Firms could simply interview whoever came through the door, and ask them for a variety of credentials reflecting their potential talent as attorneys (i.e., rely on the same techniques for selecting employees as any other employer), but it is easier to rely on school rank/class rank, especially since such ranks tend to be quite reliable proxies for characteristics that firms prefer in associates, but can no longer openly seek.

So, I'm still unclear - what exactly were the amounts of the "original" bonuses?

2:51 - It's not a blind assertion, it is the conclusion to my hypothesis - the entire point of my argument. Obviously there is no tangible evidence one way or the other. If it existed, there would be no point in hypothesizing.

3:05 - I'm in exactly the same position as anyone else to judge. I was merely responding to an earlier poster who said that from his own anecdotal observations, he believed the opposite. I explicitly acknowledged that our differing anecdotal experiences likely contribute to our differing perspectives.

3:15 - My point is exactly that the market indicates there is NOTHING especially "valuable" about what associates do, vis-a-vis the fact that there is no correlation between performance/talent/merit/ skillset/etc. and salary among the biggest and most "prestigious" firms. Such correlation is lacking, I believe, because, with a few exceptions, the very concepts of talent/merit/specialized skill have no real meaning in what associates do. I'm not arguing that associates are less valuable than the market indicates, I'm arguing that the market supports my hypothesis.

actually, 6:18, there IS tangible evidence that those who do well at top schools are smarter (i.e., LSATS, college GPA, college ranking, law school GPA). If you don't believe there's a correlation, even a modest one, between these scores and "intelligence," then there's no point in arguing with you.

6:34 - From all the reading I did three years ago in the midst of the law school application process, I was under the impression that the correlation between LSAT/college GPA and law school performance is notoriously weak (although LSAT is more strongly correlated than GPA, which is why most law schools weight LSAT more heavily than GPA in their admissions formulas). At any rate, I'm not sure what your point is. For the final time, here's my argument reasoning:

1. Unlike most other professional fields, a uniform standardized pay scale exists in BIGLAW.

2. If there were a way for firms to meaningfully distinguish one associate from another in terms of performance/talent/intelligence/etc., this would not be so, because one's value in the employment market would correlate with his own individual capabilities.

3. Firms use law school rank/prestige as a proxy for assessing purported capability, but it must not be a very useful proxy because within BIGLAW, all associates get paid the same regardless of which school they attended.

4. Conclusion: the gradient in capability in our field is much less pronounced than in most other professional fields.

This conclusion points to a number of other possibilities as well, which I've referred to throughout this post.

6:57,

Enough already. Do you think that by repeating it your argument becomes better? For those who missed it, let me repeat it once more for clarity:

1) Standardized pay scale exists in BIGLAW (note that BIGLAW is a subset of an industry).

2) Top firms (BIGLAW) hire top students and pay them top salary.

3) Top firms unreasonably hire top students, because they don't know any better.

4) Conclusion: I know better than the top players in the legal market.

Please ignore the fact that there are hundreds of thousands of lawyers who are *less* "qualified" (however you wish to define it) than BIGLAW associates who get paid jack shit (read 50k/yr) for doing crappy family law work, real estate closings, collection work, etc, etc, etc.

Oh, but I still stand by my position that if you look at the very top of the legal industry, you see pay in a very narrow band, which must mean that the gradient in capability is much different when compared to the WIDE RANGE of salaries seen in OTHER INDUSTRIES.

Did I mention that in order to make sense of my argument, you have to ignore 90% of the legal industry?

6:57, your reading comprehension is shockingly poor. I didn't say that LSATs and college GPA were good predictors of law school performance. I said that those scores, among others, were correlated with INTELLIGENCE. This was a response to your 2:13 post.

You've convinced me that you're feeble minded and not worth listening to.

8:19 - Your assertion that LSAT/UGPA aren't strongly correlated to law school performance but ARE correlated to general intelligence supports my position that law school performance itself is not as directly correlated to general intelligence as most believe. Thank you for reiterating my point yet again.

7:49 - I've repeated my argument because not one responsive post has come close to understanding or accurately characterizing it (as your post demonstrates). Although I haven't explicitly stated it, my argument assumes (as I believe) that the salary gap between BIGLAW and smalllaw is, in fact, not generally indicative of any objective, quantifiable disparity in talent/intelligence/capability. I admit that your point adds another layer of nuance to the big-picture analysis. But my more narrow hypothesis, looking only at BIGLAW as its own field within the larger industry, still has independent worth, which your comments do not in any way address.

Does anyone know if this applies to MWE everywhere, just in new york, or in other cities?

Mous, can you even read, even a little bit?

I DIDN'T assert that LSAT/UGPA aren't strongly correlated to law school performance. I just didn't assert that they are.

I'm starting to think that you did poorly at a TTT law school, don't have a biglaw job, and you're trying to give yourself reasons to believe that you're not less intelligent than people who are, frankly, more intelligent than you.

10:21 - This applies to all MWE offices. MWE NY was the office that came the closest (not that close) to matching market. Most offices, including the CA offices, were 3-6 times less than market, with most 1st-6+ year associates getting 5-10k for 2000-2100 hours. While the above article seems to portray MWE as striving to fix its bonuses to match "market" the smart bet is that MWE will still fall far short. There is no way MWE will supplement each bonus with 25-75k more. Won't happen. In two weeks, after we get 5-15k more, there will be a revitalized talk of exodus from MWE.

9:43 - Assuming you're actually formulating a hypothesis and gathering information to prove or disprove it and not just grinding an axe, you need to consider all of the facts, not just those that prove your hypothesis.

If BigLaw really believed that all law students were highly fungible, it would be irrational for them to behave the way they do. Each of the top firms spends millions on recruiting every year. Between the tens of thousands paid to each law student, the summer lunches, the recruiting boondoggles and the hours of attorney time spent recruiting instead of billing, the cost of recruiting at some large firms easily moves into the millions of dollars, with little discernable benefit (as most firms don't use the summer program to sort employees to any significant degree). If all law students were interchangeable, a firm could just wait until the beginning of third year and hire whatever students didn't have BigLaw jobs. Not only could they hire the substantial majority of the students at Hofstra and Touro, but there's probably only a handful of schools where they couldn't find students to hire (HYS and perhaps a few others). They don't do that, so obviously they think there's a difference between the average Hofstra grad and the average Harvard grad.

Of course, you could believe that BigLaw behaves irrationally, but then there's no reason to believe they behave irrationally in recruiting and rationally in pay, but the simpler explanation is that the lockstep salary structure is rational (for whatever reason) and you're just bitter.

Poor Mous, so bitter. Someday I'll toss a few coins from my biglaw salary into your styrofoam cup.

Shame I can't bill pity time.

Though maybe I can expense those violins . . .

11:15, 12:29 - For the record, I am the EIC of the Yale Law Journal and I summered at Wachtell, where I will return after my feeder-judge clerkship.

No, not really. But I'm certainly not bitter about the practice of law. I go to a T14 school and worked for a V20 firm last summer. At this point deciding to go to law school seems like the best decision of my life. Having six years of WE experience in another professional field gives me some perspective that I think many law students and lawyers lack. As this debate illustrates, I think that many in the upper echelon of the profession have a naive sense of arrogance about what it is that lawyers do. For example, blindly believing that the lock step salary structure is "rational (for whatever reason)" without questioning what that reason is, and responding to contrary suggestions with ad hominem attacks. Sure, my hypothesis is rebuttable. Piece meal attacks on any line of reasoning involving a series of inductive inferences is are easy. But nobody has been able to suggest an alternative explanation for the highly anomalous uniform salary structure in BIGLAW (although some have suggested plausible explanations for the disparity between BIGLAW and smalllaw), so I'm inclined to think that my hypothesis is most likely.

And yes, I do think that BIGLAW is run in somewhat irrational ways (take the billable hour method of compensation as an entirely separate example). Does anyone else with the outside perspective of experience in another field have any thoughts?

11:45 - thanks. my sympathies - it sucks to work your ass off and have to deal with getting paid less than those who worked the same or even less at comparable firms.

People are always talking about my drinking, but no one ever asks about my thirst.

Mous,

If, in fact, you are what you say you are, then I might have to agree with your hypothesis because you're basically retarded.

MWE pays its income partners even less than associates. Never ever go there.

MWE pays its income partners even less than associates. Never ever go there.

MWE pays its income partners even less than associates. Never ever go there.

the secret to mcdermott's success? it has a two tier partnership and it pays its junior partners less than associates based on total firm contribution. the rest of the money? where does it go? it goes to the equity partners pockets? and the payoff? who knows they don't even promote people to that tier anyway....

remember the amlaw article about mcdermott. things haven't changed, they get greedier and the culture suffers...

MWE is supposed to meet today about supplemental bonuses. Inquiring minds want to know the details!!

Lat, where is the info on that MWE meeting yesterday?

McDermott just notified everyone of the revised amounts. There seems to be dancing in the hallways....

The revised numbers were not bad. I'm shocked.

To its credit, McDermott appears to have truly corrected its December mistake.

At least in Boston, overall numbers (December + supplemental) were quite good: in the ballpark of 55-60k for class of 2002, 50-55k for class of 2003, 45-50k for class of 2004, etc. with additional variance plus or minus for hours, quality of reviews, etc. That means that they doubled to more than tripled what they had announced in December in most cases. Sounds like they made things right with (at least Boston) income partners as well.

One other thing to note about McDermott -- they put their money where their mouth is on counting pro bono hours. People with as many as 300 or more pro bono hours appeared to get full credit for every last one.

McDermott definitely missed the mark in December by a long shot, but just as surely hit it this time (unless comparing to Ropes). Given this correction, a pretty serious commitment to the "no-asshole" rule, and ZERO face time required (read: lots of flexibility to work whenever and from wherever one chooses), among other things, I for one am quite happy to be at McDermott Boston.

I hope that McDermott's decision helps convince some other early low-ballers to do the same.

Can't agree more.

California is happy with the supplemental bonus as well - McDermott clearly looked at the market and (at least) matched its competitors. Many associates here seem to have had their bonuses doubled or more.

It would be nice to have a new article on this to let people know that unlike some other firms (DLA, etc), McDermott actually came around, acknowledged their mistake, and is moving on.

good to know that mwe increased associate salaries. is there a career track beyond that? does mwe value its non equity partners, the future of the firm? or does its incredibly low non equity comp encourage a revolving door of senior people that leave ultimately costing the firm, associates and clients even more?

mwe capital partners are the highest paid in the industry. where does that money come from? from the backs of its slaves, its serfs, its servants, its non equity partners.

thanks mwe capital partners for making your position crystal clear on the future leadership of the firm. you put your money where your mouth is. now we just need our clients to know where the money goes. and then brick by brick it may crumble...

What does MWE pay their non-equity partners? Do associates first become a non-equity partner before becoming an equity partner?

Its good to hear that the attorneys got a SECOND bonus after McDermott CUT the staff bonuses, so most of the staff ended up making less money in 2007 than they did in 2006. Nothing builds moral among the staff like associates prancing around the halls talking openly about how happy they are with their SPECIAL bonuses.

"Nothing builds moral among the staff like associates prancing around the halls talking openly about how happy they are with their SPECIAL bonuses."
SO TRUE. SO TRUE. Look for the staff to mumble and grumble during upcoming meetings.

1:47 - Totally agree, morale is low for staff